Budget

Republicans Set Sights on Major Tax Cuts

New York Times: “Mr. Trump’s inability to make good on his promise to repeal the Affordable Care Act has made the already daunting challenge of tax reform even more difficult. Not only has Mr. Trump’s aura of political invincibility been shattered, but without killing the Affordable Care Act, Republicans will be unable to rewrite the tax code in the sweeping fashion that the president has called for.”

“The grand plans of lower rates, fewer loopholes and a tax on imports may have to be scaled back to a big corporate tax cut and possibly an individual tax cut. A lot of people think Mr. Trump might go for this to get an easy win.”

For members: Why Tax Reform May Already Be Dead

White House Aides Now Fear Government Shutdown

Mike Allen: “Amid high-stakes postmortems that include conversations with President Trump about White House staffing and operations, aides are rewriting their plans for the next legislative fight — with a weakened president and speaker, emboldened House hardliners, and a party at war with itself.”

“Forget pie in the sky like tax reform or a massive infrastructure package. Now aides fear a government shutdown when the current continuing resolution runs out at the end of April.”

Said one White House official: “We underestimated the vitriol in the Republican conference. The animosity between the hardline House Freedom Caucus and leadership is such that it’s hard to see how the coalition comes together. Each time there was an accommodation, there was a new demand.”

Playbook: “The government is slated to shut down at the end of April. The House — where funding the government will be most difficult — is only in session for 12 more days between now and then. (The House is out from April 7 through April 25.)”

Tax Reform Is Already In Trouble

Stan Collender: “Many of the very same pressures that stopped the GOP’s American Health Care Act dead in its tracks will be present again with tax reform. As a result, unlike what many analysts were saying just a few days ago, corporate tax reform this year not only is no longer a sure thing , it has to be considered to be in trouble.”

“But there will be one big difference between Obamacare and tax reform: it won’t be as easy for Congress to pass a budget resolution in May or June as it was for it to adopt a budget resolution this past January and, without one, the reconciliation procedures won’t be available.”

“The reason for that difficulty? The January fiscal 2017 budget resolution was largely pro forma; it made no substantive policy changes and was done just to get reconciliation instructions in place for ACA repeal. Many House and Senate Republicans held their noses and voted for it even though it had high deficits and what they considered to be excessive spending levels only so the AAC repeal debate could get underway. By contrast, the fiscal 2018 budget resolution that Congress will consider later this year will be the real thing, with deficits and spending levels that will be anything but acceptable to many representatives and senators.”

Why the GOP Pushed Health Care So Quickly

Washington Post: “Why were Republicans rushing to vote on a health-care plan that they’d barely finished drafting, that budget scorekeepers hadn’t had a chance to fully evaluate, and that, insofar as people did know about it, was widely despised?”

“In part, it’s because their plan was so unpopular and because it got more unpopular the more people learned about it. But it’s also because only by rushing to reshape a full sixth of the American economy without knowing exactly how they would be reshaping it would Republicans be able to use health care to pave the way for the rest of their agenda, including tax reform. In other words, the GOP didn’t want to let a detail like tens of millions of people losing their health insurance get in the way of two tax cuts for the rich.”

Tax Reform Is Not Easier Than Health Care

Playbook: “It might be simpler for the New York, Wall Street-centric Trump administration to understand, because many of them have spent time in finance. But, in Washington, it’s actually harder. First of all, Congress has hardly started the tax reform process. There is deep disagreement among Republicans on the Hill, and between the Hill and the administration. For example, the House — particularly Speaker Paul Ryan and House Ways and Means Chairman Kevin Brady — are hell bent on a border-adjustment tax to help pay for lower rates. Figures in the Trump administration staunchly disagree.”

“There’s absolutely no consensus plan as of now. And the lobbyists have hardly started pounding the pavement. But when they do, there will be millions in advocacy from every business interest in the United States. In fact, because of arcane rules, Republicans don’t even know how they’ll move the legislation. We’re not saying it won’t get done. But it’s not the walk in the park that Treasury Secretary Steve Mnuchin wants you to think it is.”

“The Trump administration is chattering about taking the policy lead on tax reform — coming up with a plan, and telling Congress to pass it. According to the aides and lawmakers we’ve spoken to, that would be a mistake. Congress doesn’t take orders well.”

Health Bill Failure May Hurt Tax Overhaul Effort

“Republicans’ spectacular failure to repeal and replace Obamacare threatens to sabotage another cornerstone of their agenda, tax reform — because of simple math,” Politico reports.

“The GOP was counting on wiping out nearly $1 trillion in Obamacare taxes to help finance the sweeping tax cuts they’ve got planned for their next legislative act. And now it’s unclear where all that money will come from.”

Voters Oppose Most Trump Budget Cuts

A new Quinnipiac poll finds American voters oppose the spending cuts listed in President Trump’s proposed federal budget, including 70% to 25% against eliminating the Corporation for Public Broadcasting.

By wide margins, however, American voters say other proposed cuts are a bad idea:

  • 87% to 9% against cutting funding for medical research;
  • 84% to 13% against cutting funding for new road and transit projects;
  • 67% to 31% against cuts to scientific research on the environment and climate change;
  • 83% to 14% against cutting funding for after school and summer school programs;
  • 66% to 27% against eliminating the National Endowment for the Arts and the National Endowment for the Humanities;
  • 79% to 17% against eliminating the Low Income Home Energy Assistance Program.

Trump’s Budget Slams West Virginia

The Charleston Gazette-Mail is the largest newspaper in West Virginia and ran a fairly hostile headline about President Trump’s first budget:

Washington Post: Trump won West Virginia with 69 percent of the vote, a margin of more than 42 percentage points over Hillary Clinton. It was one of his best state performances. And a president’s budget is a wish list that hardly ever comes anywhere near becoming law. (Congress, as members of Congress like to remind the executive branch, decides how money in the federal budget gets spent.) Still, headlines such as this shouldn’t be ignored.”

Trump Is Big Beneficiary of GOP Tax Bill

“The first big tax cut moving through Congress under President Donald Trump would likely benefit the president himself, potentially saving him millions of dollars in taxes on his rental income next year and even more money on other income if he wins a second term,” the Wall Street Journal reports.

“Mr. Trump’s decision to continue owning his businesses as president without running them expands the tax’s effect on him and thus makes him benefit more from the proposed repeal, which would take effect in 2018, according to accountants and tax lawyers.”

Trump Voters Lose In His Proposed Budget

“Some of the biggest losers in President Trump’s proposed budget are the rural communities that fueled his stunning White House victory,” the Boston Globe reports.

“Funding that keeps rural airports open, grants that help build rural water and sewer projects, and money for long-distance Amtrak lines that serve rural communities would all disappear under Trump’s budget blueprint released Thursday.”

“Trump also wants to kill the Low Income Home Energy Assistance Program, which helps people, including seniors on fixed incomes and the working poor, to pay their heating bills. It’s a particularly prized resource in New England, with its brutal winters. Also on the chopping block: funding for the Appalachian Regional Commission, which seeks to boost economic development in a region that strongly supported Trump. Into the dustbin, too, would go the US Chemical Safety Board, an agency that has open investigations in Mississippi, Florida, Texas, and Kansas, and last September wrapped up a probe of a West Virginia chemical spill that left more than 300,000 people without usable water for a time.”

GOP Lawmakers Push Back on Trump Budget

Washington Post: “Defense hawks, rural conservatives and even some of Donald Trump’s most vocal supporters in Congress sharply criticized the president’s first budget proposal on Thursday, pushing back on the huge potential hike in defense spending as insufficient and decrying some other cuts to federal agencies and programs.”

“Capitol Hill Republicans, however, did not seem terribly worried about the prospect of such a budget being enacted, stating matter-of-factly that it is Congress, after all, that controls the purse strings.”

Debt Ceiling Creates New Headache for Republicans

“The legal limit on how much the United States government can borrow returns on Thursday, potentially setting up an intense political battle in Congress,” The Hill reports.

“Lawmakers will have until sometime this autumn to raise the debt ceiling before the Treasury runs out of ways to make essential payments, putting the nation at risk of its first-ever debt default.”

“The debt limit is a major test for the Trump administration and Republican congressional leaders who’ve sought major spending cuts before previous increases in the debt ceiling.”

Trump’s Budget Stuck In the Mud

First Read: “The budget that President Trump sent to Congress Thursday sums up his first eight weeks in office. It’s bold, brash, boisterous — and not going anywhere.”

“The problem? ‘It’s dead on arrival,’ Sen. Lindsey Graham (R-SC) said last month, objecting to the cuts in State Department funding. What’s more, Republicans will need 60 votes to erase the budget caps in military spending put in place by sequestration. And while all it takes are simple majorities to pass a budget resolution bill, the White House and the GOP Congress will need 60 votes to eventually spend/cut money through the appropriations process. Oh, and you could argue that this Trump budget outline might make it harder for Congress to pass ANY budget resolution — which will be needed to get the reconciliation protection to pass the tax cuts that Trump and congressional Republicans want.”