Even before taking office, a president-elect’s actions signal the direction of the incoming administration and its impact on the economy. Donald Trump’s cabinet nominees have created a firestorm in Congress and a fire sale in the stock market.
In addition, Trump has demanded that those controversial appointees take office without being confirmed by the Senate. That has triggered outrage by defenders of the Constitution’s principle of separation of powers.
Markets Decline
All three major stock markets dropped last week. The Dow Jones Industrial Average tumbled 305 points or .7 percent. The S&P 500 dropped 1.3 percent and the Nasdaq composite average fell 2.2 percent.
In short, the markets have done a U-turn after a brief post-election “Trump bump.” Many businesses and investors assumed Trump would cut taxes, regulations, and government oversight of business. As a result, they felt that would lead to higher profits.
Stock prices for banks, small U. S. companies, and cryptocurrencies benefited the most.
However, the nomination of controversial cabinet appointments has brought the party on Wall Street to an end for now. Those nominees have been criticized for being unqualified or corrupt.
Destroying the Balance of Power
Trump was haunted on the campaign trail by a comment he made about being a dictator on his first day in office. He clarified that he would use dictatorial powers to close the border and promote oil drilling. However, various supporters close to Trump have expanded the dictator idea to include political retribution.
Dictators appoint government officials and change laws at will and without accountability.
Trump tried to change a law by decree in his first administration when he signed an executive order to eliminate the Affordable Care Act (ACA) often referred to as Obamacare. However, the Constitution prohibits a president from overturning a law.
Trump is now trying to appoint his cabinet without the Senate performing its constitutional (Article ll, Section ll, Clause ll) responsibility to “advise and consent.”
Circumventing the Senate
Except in emergencies, presidents submit cabinet nominations to the Senate for review. In almost all cases, those nominations are submitted to a committee, such as Justice for review of a proposed attorney general.
The committee does a background check, examines experience, and conducts a public hearing.
The committee submits a recommendation to the full Senate which then votes on the nomination. A simple majority is required to confirm. With Republicans holding a 53 to 47 advantage – Trump’s nominees would normally breeze through this process.
However, these are not your nominal nominees. As a result, Trump is trying to get around a transparent Senate confirmation.
Recess Appointments
Although the Constitution designates the Senate to review and vote up or down on cabinet appointments – there is a loophole.
Trump is reaching back to the 18th century to find a 21st century solution for installing cabinet members without a public hearing.
When the nation was founded there were no planes, trains or automobiles. If a senator was in his (women could not serve then) home state it might take weeks – even months to get to Washington. As a result, the founders allowed for “recess appointments.” These are presidential appointments made during a Senate recess and are not subject to review.
Trump demanded recess appointments in a November 10 statement on X. It said in part:
“Any Republican Senator seeking the coveted LEADERSHIP position in the United States Senate must agree to Recess Appointments (in the Senate!), without which we will not be able to get people confirmed in a timely manner. Sometimes the votes can take two years or more. This is what they did four years ago, and we cannot let it happen again. . .”
Newly elected Senate Majority Leader John Thune (R-S.D.) fell in line quickly. However, he also seemed to perform some political contortions.
In a Fox News interview Thursday, Thune said, “I think that all options are on the table, including recess appointments.”
However, in the same interview, Thune said, “But obviously, there is a process whereby we get down and scrub all these nominees and figure out whether or not, one, they’re qualified and are they people who are fit to hold these offices.”
That process is called a confirmation hearing. They do not take place while the Senate is in recess.
Test to Checks and Balances
The man Thune defeated 20 years ago to become a senator, former minority leader Tom Daschle has a different view of Trump’s effort to side-step senate scrutiny.
“Trump has promised to be a dictator on day one but has already started before day one,” Daschle told the New York Times. “This is a major test to our system of checks and balances. The Congress must demonstrate its commitment to its constitutional role. And it is critical that it does it now. Failure to do so is an acknowledgment that the president’s promise will become the reality.”
In addition to circumventing the Constitution and Senate, not having confirmation may lead to some cabinet members who are unfit for their jobs.
“None of these candidates, I’m sure, were vetted,” said David Marchick, dean of the Kogod School of Business at American University and co-author of “The Peaceful Transition of Power”. “It’s all just spontaneous decisions by Trump and then announcement by tweet. No process, no interviews, no vetting, just chaos. He had a mandate to deal with the price of eggs. The question is: Did the mandate extend to this craziness?”
Most Troubling Nominees
A president makes thousands of appointments. Cabinet members are the most consequential. With that in mind, let’s review three of the most controversial of Trump’s nominees.
Robert F. Kennedy, Jr.
Perhaps no nomination has jarred the health sector more than that of Robert F. Kennedy Jr. The day after Trump announced Kennedy as his candidate for Secretary of Health and Human Services – pharmaceutical companies saw their stocks take a dive.
Moderna was trading down 2.92 points over the weekend at 36.85. Pfizer was off 1.22 points to 24.80 while Novavax closed up .10 at 7.32 after dipping Friday morning by 2.8 percent.
Kennedy has campaigned against vaccines founding the Children’s Health Defense. That group claims that the childhood vaccine schedule is linked to autism. Once more, he called the Corona vaccine “the deadliest vaccine ever made.”He has also promoted other medical ideas debunked by scientists.
Matt Gaetz
The idea of Matt Gaetz as attorney general has not directly spooked financial markets – but it has created a stir on Capitol Hill.
Gaetz resigned his seat in the house Wednesday “effective immediately” right after Trump decided to tap him to be attorney general. House Speaker Mike Johnson told reporters that Gaetz quit so his seat could be filled sooner. However, there is wide speculation that Gaetz’s quick exit was an effort to prevent an ethics report from being released.
The House Ethics Committee was scheduled to release their probe of misconduct charges against Gaetz on Friday. However, since Gaetz is no longer a member of the House, the report may not be released.
The committee has been investigating several charges against Gaetz – including that he had sex with a minor. Gaetz has always denied the charges. However, John Clune, attorney for a woman who testified before the committee that she had sex with Gaetz, has called on the committee to make their findings public.
Other witnesses and some lawmakers have also called for the release of the committee report. Johnson is not one of them. However, even if the report is not officially released, it is the sort of thing that could get leaked.
Pete Hegseth
A weekend host on the Fox News morning show, “Fox and Friends,” Pete Hegseth served as an officer in the Army National Guard with tours in Afghanistan, Iraq, and Guantanamo Bay. However, he has never served in a senior military position and has no national security experience.
Like Gaetz and Trump – Hegseth has a sexual allegation in his past. A woman alleged that Hegseth assaulted her following a 2017 Republican women’s event in California. No criminal charges were brought, but Hegseth paid his accuser in a settlement a few years later.
Trump considered him twice during his first administration for roles as under secretary in the Department of Defense and Department of Veterans Affairs. He was vetted for those posts by Justin M. Higgins, a former opposition researcher for the Republican National Committee.
Higgins writes that he thinks Hegseth was tapped for the top Pentagon job, because of his devotion to Trump.
“Unfortunately, these Trump-friendly qualities also position him as perhaps one of the least qualified picks for secretary of defense we’ve seen,” writes Higgins.
Hegseth was “unqualified for the more junior positions he was being considered for in 2016, and eight additional years spent at Fox News has not made him any more qualified to run the Department of Defense,” noted Higgins.
The Road Ahead
The list of proposed Trump appointees with sketchy backgrounds and lack of qualifications is growing. That not only undermines the stability of markets – it threatens democracy. The question is whether the Senate will do its constitutional duty or step aside to make way for a dictatorship.
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