From friend of the show bankrate.com's Mark Hamrick...
President Trump managed to strike a tone in his speech much more in keeping with what we’ve come to expect of presidents, a departure from his bleak inaugural address over a month ago. He looked ahead to the looming 250th anniversary of the nation’s founding and evoked memories of the ingenuity of Thomas Edison and Alexander Graham Bell.
Still, when it comes to the difficult work of government, namely passing legislation in the days and months ahead, more questions about details than answers remain. As an indication that divisions can’t be healed by a single speech, many Democrats sitting in the chamber appeared to be virtually sitting on their hands throughout. The administration will need the support of some Democrats in the Senate to vote with the Republican majority to accomplish its legislative goals.
While the president pledged “massive tax relief for the middle class,” there was nothing new offered how that can be accomplished or funded. Combined, the pledges to dramatically increase defense spending, provide more aid to veterans and pass paid family leave sound hollow with no clear path enunciated about where the additional dollars will come. You can’t go on a government spending shopping spree without dollars in pocket.
As a sign of tough decisions still to be made, it didn’t take long this week for Republicans in the Senate to push back mightily on suggested dramatic cuts in funding for the State Department.
While the president repeated the call to repeal and replace the Affordable Care Act and embraced the use of tax credits and expanded Health Savings Accounts, it is clear that Congress is bogged down on the details. Many people will no doubt be reassured by the support President Trump stated for coverage of pre-existing conditions.
Members of Congress listening for the fine print on top priorities like individual and corporate tax reform didn’t hear it in this speech. Amid fears that it is being put on the back burner, they did hear a restatement of the call for a trillion dollars in infrastructure spending, using some combination of private and public funding.
The president said the “time for small thinking is over.” House Speaker Ryan will likely be continuing to press for a focus on the bigger, longer-term picture by reminding his fellow lawmakers that spending for Social Security, health care and interest on debt are on an unsustainable path.
For the financial markets, investors and ultimately all Americans, the challenge remains with respect to delivering on the president’s ambitious agenda which includes boosting growth through incentivizing business to make a priority of hiring closer to home.