I hope you didn’t miss us too much last week; after a late night watching election returns, I made the executive decision to give our team the week off from takes. This week, Dez Reads is back with a special edition that looks at what we see as Washington’s biggest upcoming policy, Wildcards.
With the last House races finally called, Republicans will kick off 2025 with a unified government under President-elect Trump. Significant policy swings are on the horizon.
However, that’s where the certainty ends. Washington is in its policy wildcard era, and with it comes potential opportunities and perils for American industry and the clients Dezenhall serves.
While great speculation continues as President-elect Trump announces his picks for senior staff and cabinet roles and there are still countless unknowns, we’re examining the policy areas where there are sure to be contradictions and curiosities ahead.
This week, Anne Marie Malecha looks at what’s in store for healthcare, Mike Bova dives into all things FTC and corporate M&A, Fred Brown examines Silicon Valley’s greater stake in defense spending, and yours truly tackles the uncertain future of energy and EV policy.
Here we go.
Make America Healthy Again. The American healthcare system is layered, sizable (17.3% of US GDP), and incredibly complex. The Trump Administration’s message on healthcare, on the other hand, is decidedly simple – Make America Healthy Again.
There is plenty of rhetoric and punditry happening around healthcare, particularly around reforming the Affordable Care Act (ACA), eliminating “entire departments” at the Food and Drug Administration (FDA) and National Institutes of Health (NIH), price controls, the ever-entwined drug epidemic and border security, removing bureaucratic red tape for federal approvals, and integrating AI to improve outcomes and reduce costs, to name a few.
However, the Republican’s traditional policy agenda tends to prioritize tax, trade, and energy. That, coupled with the following headwinds and headaches, could keep healthcare policy particularly status quo:
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Healthcare policy is difficult and incredibly time-consuming. The new administration is likely to prioritize policy fights they can accomplish before the 2026 midterm elections.
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The players are notoriously intertwined. Payors, providers, pharmaceutical companies, pharmacy benefit managers, patient groups, and all of their advocacy organizations are allies on one policy matter and adversaries on others. Allegiances are ever shifting, and all are heavily active when it comes to both political support and the legislative process.
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Americans are getting older and so are legislators. There is no easy fix in managing how America pays for the inevitable healthcare burden of an aging population, and Medicare cuts are supposedly off the table for Trump.
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The contradictory labor factor. Big L labor unions backed Republicans, particularly Trump, in the 2024 election like never before. However, they still have a more contentious relationship with fiscal conservatives who are running the House and Senate. Couple that with little L labor shortages that are prevalent across the healthcare workforce, and this may not be a fight worth picking.
With the announcement of Robert F. Kennedy Jr. as likely Secretary of Health and Human Services (HHS), the desire to make drastic changes to the American healthcare system may exist, but the mechanisms to do so are unclear. Healthcare-related industries should be on high alert, and as of this moment, staying off the Trump Administration’s radar may be the soundest strategy. The Make America Healthy Again agenda is likely to be contradictory, high on hyperbole, and full of wildcards; no organization should assume they’re safe from the crosshairs – whether it’s just rhetoric that presents reputational risk or major shifts with impacts to operations and bottom lines remains to be seen.
– Anne Marie Malecha
A Whole New M&A World. The Biden administration has been notoriously tough on business. Bank stocks rallied massively during election week, a market signal that we will see M&A deals return after a Biden administration that did not favor M&A and consolidation, setting new records for merger enforcement and monopolization litigation. However, it’s more complicated than Biden bad or Trump good, and it’s important to keep a few key challenges and wildcards top of mind:
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The biggest initial move will be who leads the FTC. Chair Khan has been no friend to tech companies looking to make acquisitions or any company trying to consolidate market share or any of the banks that would organize these deals. The expectation is that Chair Khan’s tenure will not be renewed (her term ended in September, but she can stay there until a new chair is nominated), and a more pro-business chair will be nominated.
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Big tech companies are likely not off the hook entirely. It is important to note that a lot of the larger anti-tech FTC litigation started under the first Trump administration – Trump’s Justice Department and FTC targeted Google and Meta over their dominance in online search and social media. The Biden administration amended an antitrust case against Meta for their purchase of WhatsApp and Instagram, which was initiated by the Trump administration and dismissed in court (this case was just cleared for trial yesterday).
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There are several pending deals — including Capital One’s proposed acquisition of Discover, the ongoing potential golf merger of LIV and the PGA (one that has already caught the President-elect’s eye), and rumors of a potential Qualcomm and Intel merger.
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We can expect an FTC to be less interested in setting precedents with legal proceedings and more focused on enforcing existing laws. This was a mainstay of the Khan-led FTC, which actually lost a sizeable number of the cases they filed due to what many legal analysts viewed as overstepping the agency’s authority. This will be a welcome relief for many in-house legal departments.
The last four years have forced companies to get creative about dealmaking, but the overall environment seems to be shifting toward a less aggressive and involved executive branch.
– Mike Bova
More Defense Spending, New Players. For years, President-elect Trump has talked about scaling back the U.S. involvement in foreign policy, from pressuring NATO, to promising to end foreign aid, and more. Despite these claims, Trump’s first term ushered in one of the largest investments in the U.S. military capabilities. It is likely that a unified Republican government will expand on those previous investments and push for modernization.
Throughout the 2024 campaign, Republicans promised to upgrade U.S. military capabilities, invest in new technology, and support allies that will help combat China’s growing influence. Under Republican control during Trump’s first term, the U.S. spent over $2 trillion upgrading its nuclear capabilities, investing in cybersecurity, and establishing the Space Force.
The key difference this time around is who will benefit from the increased spending.
The ascension of Silicon Valley, led by figures like JD Vance and Elon Musk, presents a real opportunity for tech companies focused on defense applications over the next two years. Trump and Congressional Republicans have made it clear they plan to invest heavily in:
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Cybersecurity
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R&D on satellites and hypersonic weapons
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Space exploration
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Increased allied arms sales to limit China’s influence
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Protecting intellectual property
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UAV production
Tech companies are poised to compete with traditional defense contractors on an unprecedented scale in U.S. history. With Musk’s close ties to Trump and a Silicon Valley figure in the Vice President’s office, we will see defense and technology procurement kicked into high gear and a major shakeup in who profits from new defense spending.
– Fred Brown
A Potential Sea Change for Autos. Electric vehicle (EV) policy became a key focus for policymakers beginning in the Obama Administration, when various EV incentives (like the $7,500 tax credit) and mandates became popular among environmentally conscious Democrats. The battle lines were very clear – Democrats strongly supported a mandated shift from gasoline-powered autos to EVs, while the GOP, with the support of the oil and gas sector and a distaste for government regulation, uniformly opposed mandates, rebates, and other pro-EV policies.
California was also a key player, as at least a dozen states blindly follow the Golden State’s rulemaking on EV policy. When California adopted a ban on all gasoline-powered cars by 2035, those states did the same. Conservatives in other states have pushed legislation to prevent their governments from adopting California policies, further cementing EV policy as a purely partisan issue.
Enter Elon Musk. It’s no secret that Musk is one of President-elect Trump’s most important backers. He also happens to own the most valuable EV company on earth, Tesla. Where he was praised in the past for his company’s role in combating climate change, he now is a sworn enemy of the Democratic Party. Additionally, he loudly moved his headquarters from California to Texas, thumbing his nose at Sacramento on the way out the door.
While Tesla is the OG EV maker, American automakers like GM and Ford have shifted their portfolios to heavily favor EVs, newcomers like Rivian and Lucid have also emerged. Consumer tax credits heavily incentivize buyers to get EVs off dealership lots and into their garages. The Trump transition team is telecasting that they’ll rollback EV incentives as part of a broader tax policy agenda, with Musk’s blessing.
In theory, it would be shocking to see a 180-degree change in EV mandates and incentives, which will add billions of dollars to Musk’s net worth, but maybe not. The end of the EV tax credit might impact Tesla’s cult following and consistent sales, but it will be damning for Tesla’s competitors, whose continued existence and growth are reliant on those incentives.
Politics is downstream of culture, and Musk and Trump are certainly cultural firebrands. Policy is downstream of politics, and as the populace somehow seems poised to widen its tribal divide, we may see a truly jarring change in the EV market as a result.
– Josh Culling