Budget

Trump Won’t Offer His Own Health or Tax Plans

CNBC: “A more hands-off approach than Trump has previously signaled doesn’t mean that the Republican agenda won’t succeed… For the agenda, the risk is that the absence of White House plans may complicate prospects for achieving consensus between the more ideologically aggressive House and a more centrist Senate. For individual Republican members, the risk is that a president of their party may turn against controversial elements of tax or health plans after they’ve voted for them.”

“For now, lawmakers and congressional aides say the White House has worked closely with them as they craft their own approaches. When it’s ‘go time’ for legislation, as one House leadership aide put, Republicans are counting on Trump to provide the strong public advocacy needed to overcome political resistance.”

Trump Budget Uses Optimistic Growth Forecasts

“The Trump administration has drafted preliminary economic growth forecasts in its federal budget planning that rely on assumptions that are far rosier than projections made by independent agencies and most private forecasters,” the Wall Street Journal reports.

Stan Collender: “To say the least, this first set of economic assumptions and the resulting phony deficit will be fake news – lies, in other words – from Trump. Most other credible economists – including from Wall Street, the Congressional Budget Office and the Federal Reserve – either will disagree with Trump outright or, to be diplomatic, will say that what the White House is assuming is in the extreme upper range of what’s acceptable.”

“But let’s be clear: Unless he issues an executive order repealing the laws of economics and budgeting or Congress rejects most of his tax and spending agenda, the federal deficit and debt will both be much higher than Trump will be forecasting.”

Popular Domestic Programs Face Budget Ax

“The White House budget office has drafted a hit list of programs that President Trump could eliminate to trim domestic spending, including longstanding conservative targets like the Corporation for Public Broadcasting, the Legal Services Corporation, AmeriCorps and the National Endowments for the Arts and the Humanities,” the New York Times reports.

“Work on the first Trump administration budget has been delayed as the budget office awaited Senate confirmation of former Representative Mick Mulvaney, a spending hard-liner, as budget director. Now that he is in place, his office is ready to move ahead with a list of nine programs to eliminate, an opening salvo in the Trump administration’s effort to reorder the government and increase spending on defense and infrastructure.”

McConnell Won’t Seek Democratic Votes

Senate Majority Leader Mitch McConnell said that Republicans will repeal and replace the health care law and overhaul the tax code without Democratic help or votes, the AP reports.

Said McConnell: “It’s clear that in the early months it’s going to be a Republicans-only exercise. We don’t expect any Democratic cooperation on the replacement of Obamacare, we don’t expect any Democratic cooperation on tax reform.”

Caitlin Owens: “Republicans can’t do everything they want to on health care without Democratic votes, under Senate rules. They can do a lot through a process called budget reconciliation, which allows them to pass budget-related policy with just 51 votes. But they can’t touch central elements of Obamacare.”

Ryan Struggles to Sell Tax Reform to His Own Party

“Paul Ryan showed up to Senate Republicans’ weekly lunch on Tuesday hoping to salvage a controversial pillar of his tax reform plan that would change how imports and exports are taxed,” Politico reports.

The next day, Sen. Tom Cotton (R-AR) took to the Senate floor to slam Ryan’s so-called “border adjustment tax,” saying “some ideas are so stupid only an intellectual could believe them.”

“The sequence was an ominous sign for a linchpin of Ryan’s tax plan — and perhaps for the prospects of tax reform happening at all. The border adjustment tax would generate more than a trillion dollars over a decade; there’s no obvious way to replace that money, which is needed to help pay for a steep cut in corporate and income taxes.”

GOP Plans for Obamacare Repeal/Tax Reform Hit a Wall

Stan Collender writes that the Republican strategy on quickly repealing the Affordable Care Act and enacting tax reform seemed to be so creative and smart when it was first revealed right after the election but “may soon become the prime source of legislative hell for House and Senate Republicans.”

“The worst case scenario is that the once slam-dunk GOP grand scheme will end up preventing both ACA repeal and tax reform from happening at all.”

GOP Lawmakers Wary of Coming Trump Budget

Politico: “GOP lawmakers are fretting that Trump’s spending requests, due out in a month or so, will blow a gaping hole in the federal budget — ballooning the debt and undermining the party’s doctrine of fiscal discipline.”

“Trump has signaled he’s serious about a $1 trillion infrastructure plan, as he promised on the campaign trail. He also wants Republicans to approve extra spending this spring to build a wall along the U.S. southern border and beef up the military — the combined price tag of which could reach $50 billion, insiders say. And that’s to say nothing of tax cuts, which the president’s team has suggested need not necessarily be paid for.”

Playbook: “Note to the White House: There is already serious concern in the Capitol that Congress will not be able to pass a spending bill to start construction on the border wall with Mexico. So if Trump wants a wall started, he needs to send legislation to Congress sooner rather than later.”

GOP Tax Overhaul Plan Divides Party

“Republicans see a once-in-a-generation opportunity to overhaul the U.S. tax code. Just weeks into Donald Trump’s presidency, they are getting a taste of why such attempts are always confounding—every action creates an equal and opposite reaction,” the Wall Street Journal reports.

“A linchpin of the House Republicans’ tax plan, an approach called ‘border adjustment,’ has split Republicans and fractured the business world into competing coalitions before a bill has even been drafted.”

“A border-adjusted tax would impose a levy on imports, including components used in manufacturing, and exempt exports altogether. Opposing it are retailers, car dealers, toy manufacturers, Koch Industries Inc., oil refiners and others that say it would drive up import costs and force them to raise prices.”

Will Mulvaney Be First to Resign from Trump Cabinet?

Stan Collender says that OMB Director Mick Mulvaney will be either the most important member of the Trump cabinet or the first one out the door.

“Mulvaney’s positions on a variety of critical spending, tax and budget process issues are so different from Trump’s and so likely to get in the way of White House and congressional Republican plans that he could quickly find himself opposing what both Trump and the GOP majorities in Congress want to do. That’s why it’s not hard to imagine Mulvaney quitting or Trump demanding his resignation shortly after he joins the administration.”

GOP Lawmakers Think Trump Will Support Tax Reform

Playbook: “Republicans didn’t come out of their retreat in Philadelphia with a grand plan — they really never do. But they feel like they’ve notched one big victory: President Trump seems generally supportive of a key element of their tax plan. Border adjustment is a plan that taxes imports instead of exports. Republicans haven’t had an easy time explaining it. Trump nodded toward it in his speech to the GOP and then, later, Sean Spicer suggested it would be the mechanism to pay for the wall with Mexico. He later backed off of that, saying there are many ways to pay for the wall. But that doesn’t mean that this plan won’t be part of overall tax reform.”

“The fact remains: Speaker Paul Ryan (R-WI) — through lots of backchannel chats with Trump — seems to have succeeded in bringing the Hill and White House together on tax reform. For now.”

Federal Deficit Expected to Soar Over Next Decade

“After seven years of fitful declines, the federal budget deficit is projected to begin swelling again, adding nearly $10 trillion to the federal debt over the next 10 years, according to projections from the nonpartisan Congressional Budget Office that reveal the strain that government debt will have on the economy as President Trump embarks on plans to slash taxes and ramp up spending,” the New York Times reports.

“The new deficit figures will be a major challenge to congressional Republicans, who were swept to power in 2010 on fears of a swollen deficit and who have made controlling red ink a major part of their legislating under former President Barack Obama.”

Trump Team Eyes Dramatic Spending Cuts

The Hill: “The changes they propose are dramatic. The departments of Commerce and Energy would see major reductions in funding, with programs under their jurisdiction either being eliminated or transferred to other agencies. The departments of Transportation, Justice and State would see significant cuts and program eliminations.

“The Corporation for Public Broadcasting would be privatized, while the National Endowment for the Arts and National Endowment for the Humanities would be eliminated entirely.”

“Overall, the blueprint being used by Trump’s team would reduce federal spending by $10.5 trillion over 10 years. The proposed cuts hew closely to a blueprint published last year by the conservative Heritage Foundation, a think tank that has helped staff the Trump transition.”

Trump Budget Nominee Did Not Pay Taxes for Employee

President-elect Donald Trump’s choice for White House budget director “failed to pay more than $15,000 in payroll taxes for a household employee, he admitted in a statement to the Senate Budget Committee, the sort of tax compliance issue that has derailed cabinet nominees in the past,” the New York Times reports.

In a questionnaire provided to the committee, Rep. Mick Mulvaney (R-SC), a conservative and vocal proponent of fiscal restraint noted, “I have come to learn during the confirmation review process that I failed to pay FICA and federal and state unemployment taxes on a household employee for the years 2000-2004.”