The knowns and unknowns of a second Trump administration
President-elect Donald Trump speaks at a rally during the early-morning hours of election day on Nov. 5 in Grand Rapids, Michigan. Gettyimages.com/Scott Olson / Staff
By
Nick Wakeman
Some priorities such as cyber and artificial intelligence are likely not changing, but we will watch the transition for what else might impact government contractors.
With the elections now behind us, the conversation can turn to what does it mean and how will it impact government contractors.
A new administration means new priorities and new people driving them, but let’s start with what we think will not change.
The importance of cybersecurity, artificial intelligence, digital transformation and critical infrastructure protection will not change. Defense, national security, homeland security and intelligence operations also will remain important priorities.
No matter the party, U.S. leadership in these areas is a top priority.
With the White House and Senate in Republican hands (the House remains undetermined at publication time), we can expect defense spending to increase and that should be a positive for companies focused on that sector.
Downward pressure on the civilian side seems likely, particularly at the Environmental Protection Agency and Education Department. Those two agencies are frequent targets of the GOP.
If the House flips, it will be more difficult for the Donald Trump administration to get everything it wants through a chamber controlled by the Democratic Party.
The new administration will have an easier time passing tax cuts if Congress is split between the two parties.
If the GOP controls both chambers, look for a 100-day push of initiatives through Congress. Beyond the campaign promise to repeal the Affordable Care Act, I’m not sure which initiatives will have a direct impact on GovCon opportunities.
With a complete GOP sweep, we’ll likely see a slew of social issues being pushed. Those would include stricter abortion controls and a pullback on transgender rights as we have seen at the state level.
A second reasonable expectation is that the Trump administration will follow the example of the Biden administration and open Day 1 with a series of executive orders, many of which will be aimed at rescinding Biden administration EOs.
Top of the list are orders that focused on climate change and diversity and inclusion. But this might not be cut and dry.
Rescinding an executive order is easy because those are broad, often high-level policy documents. But if the policy has made its way into guidance and regulations, they cannot be washed away with the stroke of a pen.
Early in the Trump administration, we expect to see action around the federal workforce.
As our colleague Erich Wagner at Government Executive explains in an article published this morning, President-elect Trump has vowed to eliminate civil service protections so it is easier to fire career personnel. This is the so-called Schedule F.
Contractors could be impacted in multiple ways. Movement on new projects and initiatives could be slowed or stopped because of missing leaders and decision makers. At the same time, agencies might turn more to the private sector to fill gaps.
Any move on Schedule F and other workforce initiatives will be met with legal action, so don’t expect a lot of significant changes early in the administration.
The biggest unknown for contractors is who will be the leaders in a new Trump administration. Many of his first term advisers and cabinet members, and even his first term vice president, spoke out against him or declined to endorse him.
Given that, we won’t see a great number of returning administration officials at the senior levels.
During the campaign, Trump made a lot of promises of actions he wanted to take. But as with any campaign, specifics were often missing.
Executive orders and congressional proposals will give the most specific hints of how the Trump administration will move forward.
We will have to watch for who the agency leaders are to gauge the impact on contracting opportunities.
The transition teams are another aspect to take note of. There is an overall team and then each agency and department have a team. Of course, who visits Trump at Mar-a-Largo matters too.
While I don’t expect Elon Musk to take any kind of cabinet position, he could very easily play a significant role in the transition and on a promised government efficiency commission.
It is just day one of the transition, so there will be plenty of movement and people to watch for between now and Jan. 20.
The one sure known is just how many unknowns there are.