IPSWICH — The Trump administration could bring some welcome changes to the New England economy by lowering business taxes, boosting spending on roads and bridges, and loosening federal regulations on banks, James Brett, the long-time president and CEO of the The New England Council, told local business people Friday morning.
Trade policy, he said, is still an uncertainty for New England’s importers and exporters.
Brett shared his thoughts about Trump and the economy at a North Shore Chamber of Commerce’s breakfast forum at the Ipswich Country Club.
The New England Council is a regional business organization that lobbies for economic development issues in Washington, D.C.
Here are highlights of his talk.
Tax reform to spur job growth had been stymied by a deeply divided Congress, Brett said, but that could change under a Trump administration.
“Now we have a president who campaigned on the pledge to fix our broken tax system, perhaps even in his first 100 days in office,” Brett said, “and a Republican-controlled House and a Republican-controlled Senate who seemed eager to work with him.”
The House Republican plan, he noted, aims to make the tax code simpler, fairer and flatter for individuals by bringing the number of tax brackets down from seven to three, something the Trump tax plan also favors.
The business community has also called for a reduction in the corporate tax rate of 35 percent. The House Republican plan would lower this rate to 20 percent; the Trump plan drop it to 15 percent, while also eliminating the corporate alternative minimum tax, moves that are favored by businesses, Brett said.
Good news for New England, he added, is that Springfield Congressman Richard Neal, a Democrat and the dean of the New England congressional delegation, is the most senior-ranking Democratic member of the tax-writing House Ways and Means Committee.
Trump has vowed to act quickly on a $1 trillion spending plan for roads and bridges, Brett said, something that both sides of the aisle agree is needed to help businesses stay competitive and create construction jobs. Brett said there were 1,800 bridges in New England rated structurally deficient by the federal government in 2015.
“You and I know, all we need is one accident on one of those 1,800 bridges, and you have a fatality, and Congress would say it’s time. Public safety demands it, so this is an issue both sides are very interested in addressing.”
While few details about Trump’s infrastructure plan are known, private financing serves as its cornerstone, Brett said, with $137 billion in federal tax credits to back the program. Brett said this approach has come under harsh criticism, because it is feared private investors would only be interested in doing projects that create a revenue stream to recoup costs, such as those that have tolls or user fees. That might mean some critical infrastructure fixes would be ignored, he said.
Trump has expressed interest in rolling back aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was passed after the recession eight years ago.
“Many institutions,” Brett said, “particularly the small community banks and credit unions which are so important to our region, have found Dodd-Frank regulations to be incredibly burdensome and frustrating.”
Small banks, he said, were not responsible for the financial crisis, and some small banks employ more regulatory compliance officers than they do loan officers.
Uncertainty about international trade and access to foreign markets continues to be a concern among New England businesses, Brett said. It appears the Trans-Pacific Partnership, a trade agreement among 12 nations of the Pacific Rim, is dead, Brett said, “which is very frustrating for many businesses who waited several years for the agreement to be finally completed.”
Trump has also indicated he plans to withdraw the United States from the North American Free Trade Agreement, Brett said. While there have been job losses due to NAFTA, many businesses that rely on free trade with Canada and Mexico could be harmed, Brett said. A trade deal with Europe is also unclear, with some of New England’s largest trade partners coming from Europe.
“So this is very concerning for our region,” Brett said.
Brett also had a message for chamber leaders about the need for businesses and the New England congressional delegation to work together amid a loss of clout on Capitol Hill.
“And clout isn’t just about numbers,” Brett said. “It’s also about seniority, and this is yet another area where our region has seen a significant loss.”
Brett, a former state representative from Dorchester who has served as head of the New England Council for 20 years, noted that the loss of Massachusetts Sen. Ted Kennedy and other longtime members of Congress has hurt New England’s standing in Congress.
On the other hand, he noted that the region still has leaders, such as Democratic Senators Ed Markey and Elizabeth Warren.”We also have some young, new fresh faces in the delegation, like your own here on the North Shore, (Congressman) Seth Moulton, as well as Representatives Joe Kennedy, Katherine Clark. These new leaders bring with them fresh and innovative ideas and great energy and enthusiasm to effect real change.
“But, being junior members of the minority party means putting those ideas into action will unfortunately be an uphill battle,” Brett warned.
Staff writer Ethan Forman can be reached at 978-338-2673, by email at firstname.lastname@example.org or on Twitter at @DanverSalemNews.