The presidential race is up in the air and the political climate in 2016 will be unpredictable, but that’s no reason for pessimism in the financial industry, said a seasoned political strategist.
In his remarks on the opening day of the Schwab IMPACT 2015 conference on Tuesday, Greg Valliere said that in the final year of a lame-duck Obama administration, the president is likely to make unilateral policy decisions.
“This White House is going to be unable to get anything further done legislatively, so it will try to govern through regulations, and there’s no more prime example than the ridiculous financial advisor rule,” said Valliere, chief political strategist for Charlotte, N.C.-based Horizon Investments. “Despite massive opposition from the financial industry, it will come out this coming spring.”
The Department of Labor is considering a rule that would extend the fiduciary standard to all financial service providers.
Valliere says another issue unites members of the financial services industry this year, regardless of their political leaning.
“Never in my career have I seen the consensus like I’ve seen in our industry to do it already. ... Raise interest rates. Virtually everyone is sick of the will they, won’t they with the fed,” he said.
On many other economic and fiscal issues, the U.S. faces deep partisan divides, leading to gridlock in Congress. However, the impasse may be thawing, he said.
“Congress is defying conventional wisdom in extraordinary ways,” Valliere said. “For one thing, they’ve gotten a lot done this year. They passed a landmark trade bill, they funded homeland security, they passed a doc fix (Medicare reform), we had the debt ceiling raised until spring of 2017. They lifted the spending cap, so we’re not going to see a crisis on the budget. This is a fairly big list of accomplishments.”
Also surprising, he said, was Rep. Nancy Pelosi’s reemergence as a deal-maker in the House, the election of Paul Ryan to House speaker and the Republican Congress’s passage of a budget that raises spending by $118 billion.
“Their own budget caps are going to be violated,” Valliere said. “However, our deficit continues to fall not due to spending restraint, but due to increased (tax) receipts.”