OKPOLICY.ORG
By Warren Vieth
The full impact of Donald Trump’s presidency in Oklahoma won’t become clear for some time, but its implications already loom large in the areas of health, energy, taxes and infrastructure spending.
Policy analysts and political observers interviewed by Oklahoma Watch since Tuesday’s election said Trump’s plans, if enacted by Congress, could produce a tectonic shift felt from one end of the state to the other.
Here is an initial assessment of how Oklahoma might fare under Donald Trump’s presidency in several key policy arenas.
Health
Perhaps the biggest domestic issue in the presidential race was the future of the Affordable Care Act, the 2010 law that expanded Medicaid for poor people in most states and set up a subsidized health insurance market for middle-income Americans.
Trump has vowed to repeal it, something conventional Republicans have been itching to do, too. Details remain hazy, though, about what they intend to put in its place or what will happen to the 16 million Americans who have obtained health insurance coverage since the ACA took effect. In a report published Friday, Trump said he now might try to amend rather than repeal the law.
In Oklahoma, about 130,000 low-income and middle-income people are now covered by private health plans sold through the ACA policy exchange.
The effects on them depend on how much of a rollback a Trump administration is willing and able to accomplish.
”How much it actually takes away from the benefits people now have is the question,” said Gene Perry, policy director of the Oklahoma Policy Institute in Tulsa.
Oklahoma Hospital Association President Craig Jones said health care officials across the country had been unable to determine the details of Trump’s health care agenda.
“With his election and now a full Republican Congress, major changes in the Affordable Care Act are very likely in the offing,” Jones said.
One possibility mentioned is a shift toward Medicaid block grants that give states more discretion in their use of federal funds to provide insurance to the poor.
“In Oklahoma we haven’t expanded Medicaid, so we’re not going to be kicking people off the program,” Perry said. “But there are other changes they could do that would basically give states total flexibility to shrink their Medicaid populations, change the benefit structure, change requirements.”
Oklahoma is one of 19 states that have rejected the federal government’s offer to pay most of the cost of expanding Medicaid for their citizens.
Instead of trying to persuade the governor and Legislature to expand traditional Medicaid, some health care advocates have been promoting the idea of a subsidized private-market insurance program that would still qualify for federal funding. Arkansas already operates a similar program.
That campaign could be stalled by Trump’s election, advocates said. With the future of the ACA in its present form now in doubt, state officials are likely to be wary of embarking on a new program that would depend on future federal funding.
“It does seem as though decisions on whether to adopt Medicaid expansion should be put on hold,” said Dave Bond, CEO of a conservative advocacy group affiliated with the Oklahoma Council for Public Affairs in Oklahoma City.
“What still is an obvious need, however, is Medicaid reform, particularly steering more people away from emergency room use for non-urgent medical needs,” Bond said.
Energy
Three more drilling rigs went to work in Oklahoma’s oil and gas fields last week, nudging the total to 76. Yet rig count remains far below the 214 level recorded two years ago when prices began to collapse.
If Trump has his way, triple-digit rig counts might become the norm again. The President-elect’s energy platform is unabashedly pro-development, particularly when it comes to petroleum.
Trump has pledged to “unleash America’s $50 trillion in untapped shale, oil and natural gas reserves.” He wants to open onshore and offshore leasing on federal lands, and “reduce and eliminate all barriers to responsible energy production.”
Doing so, he said, could increase petroleum industry employment by 400,000 people across the country.
That kind of language is music to the ears of Oklahoma oil and gas producers, who feared the worst if Hillary Clinton had been able to carry out her campaign pledge to try to cut billions of dollars in “wasteful” oil and gas tax subsidies.
“It offers Oklahoma oil and gas producers a reprieve,” said Cody Bannister, vice president of the Oklahoma Independent Petroleum Association. “Every year since President Obama was elected he’s called for increased taxes on the oil and natural gas industry. When Congress wouldn’t follow through, he moved to the regulatory agencies, and we saw an onslaught of new regulations aimed at the industry.”
One person’s music can be another’s warning siren. State environmentalists and clean-energy advocates said they feared that Trump’s energy policy would exacerbate problems associated with oilfield fracking and wastewater disposal, and undo years of progress in curbing emissions from coal-fired electric plants.
Trump is an “anti-regulation, pro-fossil-fuel, climate-change denier,” according to Sierra Club Oklahoma Chapter Director Johnson Bridgwater.
“All of this will combine to have a tremendously negative impact on the environmental health of Oklahoma, the United States and the world,” Bridgwater said.
Trump’s energy policy is expected to lighten the existing regulatory burden on fossil-fuel producers, actions he can take in some cases without needing congressional approval.
It appears possible Trump will be advised in those efforts by a prominent Oklahoma oilman, Continental Resources CEO Harold Hamm. Trump consulted with Hamm on energy issues during the campaign. Hamm has been mentioned as a possible candidate for energy secretary, although he sent a post-election email to employees saying he planned to stay put in Oklahoma.
Trump’s campaign statements don’t explicitly endorse the practice of hydraulic fracturing, in which fluids are pumped into well bores to increase the flow of oil and gas, or the injection of wastewater into deep wells. Wastewater disposal in particular has been linked to Oklahoma’s increased earthquake activity.
But his call for robust “shale energy” production appears to convey an implicit acceptance of those practices.
The Sierra Club’s Bridgwater said Hamm’s ties to Trump signaled the probable direction of future policy.
“Harold Hamm is one of the people who helped create this fracking movement,” he said. “If you have a president stating they would use somebody like Hamm to run their energy policy … there is a strong likelihood that the environment is going to suffer.”
Taxes and Spending
If the president-elect persuades Congress to enact all of his policy proposals, Oklahomans will share in what amounts to a substantial economic stimulus program, Republican-style.
Trump’s economic agenda includes broad reductions in individual tax rates, featuring big benefits for wealthy taxpayers but extending down through lower tax brackets as well. Businesses would receive a big cut in corporate income taxes: The current 35-percent tax rate would be chopped to 15 percent.
According to an analysis by the Tax Foundation in Washington, D.C., people in the bottom 20 percent of taxpayers would see their federal taxes cut $97 a year under Trump’s plan. People in the top 10 percent would gain $12,326 to $18,945, in the top 1 percent, $86,355 to $135,460. The foundation said it could not provide a single estimate for high-income households because of ambiguities in the Trump platform.
Trump also wants to repeal what’s left of the federal estate tax, which mainly affects higher-income Americans.
On the spending side of the stimulus equation, Trump has endorsed a big package of bond-financed infrastructure investments totaling as much as $1 trillion over time. That would be even more than Obama’s $840 billion stimulus program.
“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” Trump declared in his election victory speech. “We’re going to rebuild our infrastructure. … And we will put millions of our people to work as we rebuild it.”
A burst of new spending on infrastructure would be welcomed in Oklahoma, where unemployment is rising because of the rapid downsizing of the oil and gas industry. Lower business taxes would provide additional benefits to companies whose profits have been squeezed by the oil-sector contraction.
“That could be an enormous boon to business spending, which has really been negatively affected over the last several years by Obama policies,” said Oklahoma Senate Finance Committee Chairman Mike Mazzei, R-Tulsa.
Oklahoma Farm Bureau Vice President John Collison said a significant increase in infrastructure investment could have a big impact on Oklahoma’s agricultural producers.
“Infrastructure is our biggest deal – that and rules and regs,” Collison said. “All of our grains ship to Catoosa and down the Arkansas River, the Kerr-McClellan Navigation System. That needs to be deepened. We need to get bigger tonnage in there. We’ve got to get better roads.”
Some policy observers see potential problems with Trump’s agenda. His broad tax reductions appear likely to increase federal deficits and the national debt. That could lead to cuts in federal safety net programs such as Medicaid and food stamps.
“We suspect there are going to be some big battles up ahead to defend some of the longstanding protections that have been in place for low-income families,” said David Blatt, director of the Oklahoma Policy Institute.
Trump’s promises to renegotiate key trade deals such as NAFTA might undermine his economic-growth agenda if they lead to higher tariffs that reduce the flow of goods across borders.
Former state budget director Tom Daxon, a Republican, said he supported Trump’s tax-cutting proposals. But he said he worried that any benefits they produced could be washed away by punitive trade measures, undermining public confidence in the party and its entire economic agenda.
Fred Morgan, president of the State Chamber of Oklahoma, said his group also was concerned about Trump’s trade policy as well as the president-elect’s proposed crackdown on undocumented immigrants.
But the Chamber sees lots of upside potential to Trump’s presidency, not only substantive but also psychological.
“You can see what the stock market’s been doing,” Morgan said. “There’s optimism that we’re going to have an economy that’s not in malaise, that’s it’s going to be a much more dynamic economy.”
