Federal executive orders may impact construction
It is no secret that Republican President Donald Trump faces potentially insuperable gridlock in the ostensibly friendly, GOP-controlled Congress. Democrats appear to be intractably opposed to the 45th president’s agenda, most recently evident in their resistance to repealing Obamacare.
Barring some change, the business of Congress appears as though it may be stuck in a logjam for the foreseeable future. For their part, congressional Democrats appear to have come to the conclusion that opposing all things Trump is their ticket to victory in the 2018 midterm elections.
Meanwhile, the administration cannot even rely on its own party, one that is increasingly torn between Trump’s populist “America first” wing and free-market conservatives. Despite all this, however, there is still a good chance that Trump will succeed in advancing elements of his agenda via a tool favored by several presidents, including Barack Obama’s administration: executive orders.
Executive orders are not a new development in American governance. Executive orders stemming from the president’s constitutional powers have been fundamental to directing foreign policy since the nation’s founding, but executive orders grounded in statutory authority — in other words, authority conferred upon the president by Congress’s passage of a law — also date back to the earliest days of the republic. The first example of such an order may be the proclamation issued by President George Washington Aug. 7, 1794, ordering the participants in the Whiskey Rebellion to disperse, and further ordering the militia to put down the rebellion. Washington’s authority to make such an order rested upon a law passed by Congress instructing the president that he could call forth the military to put down the rebellion, but only if he first warned the citizens involved to desist and return to their homes.
An indispensable tool
Since that time, executive orders have remained an indispensable tool of American presidents. Abraham Lincoln relied on them to conduct the early months of the Civil War, presenting them after the fact to Congress to either adopt his actions as its own or to cut off support for the Army. And Franklin D. Roosevelt chose to greatly expand the use of executive orders driven in part by the exigencies of World War II, but also by the growth of government during the New Deal era. Indeed, the proliferation of executive agencies since that time encourages, and often requires, presidents to issue executive orders. More recently, of course, there is the example of Obama, who used executive orders to enact elements of his administration’s agenda in an end-run around a hostile, Republican-controlled Congress.
Like his predecessor, Trump has proven quite willing to use executive orders to enact his agenda in the face of congressional gridlock. Since his inauguration, Trump has issued a flurry of executive orders addressing an array of issues, and some of these are certain to have an impact, whether direct or indirect, on the construction industry.
For example, President Trump issued a “Buy American and hire American” executive order directing administrative agency heads to evaluate the implementation of existing “Buy America” laws within their jurisdictions, revisit their waiver process and its impact on American businesses, and propose additional policies that “maximize” the use of American-made products and their components, including materials such as steel, iron and cement. The aim throughout is to close existing loopholes that allow businesses to evade the requirements of existing law in this area. While it is impossible to know what the result of the government’s internal review will be, it is plain that it has the potential to impact the construction industry by, among other things, closing off external markets for products and materials and rescinding existing waivers.
The impact of other provisions contained in recent executive orders is less obvious. For example, the “Buy American and hire American” order also targets the H-1B visa program that facilitates domestic employment of skilled immigrants by decreasing the role of the lottery system used to determine which companies can sponsor visas. This, combined with Trump’s other executive orders tied to immigration reform and enforcement, has the potential to indirectly affect the availability and cost of labor, especially in those sectors of the economy that presently employ relatively large numbers of immigrant workers.
The president’s executive orders concerning regulatory reform may also have indirect effects on the construction industry. These require administrative agencies to conduct internal reviews of current regulations and make recommendations on how they can be modified, and further compel the agencies to cut two regulations for every new one proposed. Again, while it is impossible to say with certainty what effect these changes will have on the construction industry, they have the potential to reduce the regulatory burden on companies in this area as well as many others.
What we can say for certain is this: With Congress paralyzed, the construction industry should expect Trump to continue to issue executive orders to make what changes he can within the bounds of existing law.