Let's take a sober assessment of what we know in the wake of the defeat of the American Healthcare Act. Not good; let's hope that Donald Trump, Paul Ryan, and Mitch McConnell are able to be honest with each other about what happened, what is on the table, and the best way forward. The New York Times assessment doesn't matter; Sean Hannity and Mark Levin's assessments don't matter. It is up to the Big Three to figure out how to translate Republican majorities into Republican legislation.
First, a couple of benchmarks:
- The Republican House was a handful of votes short of passing the Ryan / Price bill. The Freedom Caucus and a handful of other conservatives were unwilling to preserve the underlying premise of Obamacare that everybody is entitled to healthcare - whether through exchanges, expanded Medicaid, or tax credits. Any further concessions in their direction would have sunk the moderates in the House and the Senate. Forcing a vote would have been damaging to moderates who would have "taken one for the team". More time would not have bridged the gap. There is no compromise within the Republican caucus.
- There will be no Democratic compromise on future legislation. Chuck Shumer demonstrated the attitude of the Senate with his commitment to filibuster Neil Gorsuch. Nancy Pelosi remains in the House because she believes that she can re-gain the speakership if the Trump administration falters.
Second, some reflections on upcoming challenges:
- In the absence of a budget for the fiscal year ending September 30, the federal government is operating under a Continuing Resolution which continues spending at FY2016 levels with a few changes, and expires on April 28. Since that continues deficit spending, there will need to be an increase in the debt ceiling by the Fall. Both measures will involve a battle between "pragmatic moderates", and "fiscal conservatives" - with little Democratic help, even without "red meat" items like funding the Mexican Wall, and defunding Planned Parenthood.
- The real fiscal battle will be around the FY2018 budget, where Trump's framework has proposed adding $54 billion to security categories, with steep offsetting cuts to everything from the State Department, to the EPA, to Health and Human Services and support for the humanities. This would be a donnybrook in the best of times, but with a recalcitrant Republican House it may well be that we keep on with "Continuing Resolutions" rather than transformative budgets.
- Some in the administration have been saying that they will move on to the simpler subject of tax reform where there is general agreement on lower rates, fewer deductions, and a simpler code. Right! With a $20 trillion national debt and current deficits of almost $600 billion per year, many will demand that that the changes be "revenue neutral" with only modest belief in lower rates creating greater taxable economic activity. Ideas such as a VAT-like "border adjustment tax" will take a lot of selling; every deduction to be eliminated has a constituency and a bunch of lobbyists; and for every winner there is a loser. Historical tax reform has been bi-partisan.
- Trump will be forced to play defense - with the continuing search for any proof that Team Trump collaborated with the Russians to defeat the Inevitable Hillary; and with Democrats' Plan B, the impropriety of his family business.
And what can be done without a functional Republican Congress ?:
- With the onus on Chuck Schumer for threatening to filibuster Neil Gorsuch, Trump will be able to get Supreme Court justices approved. If there were nothing else, this would be enough to take Trump over Hillary.
- Trump can secure the border. The Border Patrol will be strengthened; the "catch and release" program will end; "sanctuary cities" will be held accountable; and the Great Wall, or at least portions of it, will be built.
- ISIS will be crushed. Trump has quietly ramped up support for the Iraqis in Mosul, for the Kurds and Arab opposition in Syria, and for the Saudi-led forces in Yemen. Immigrants from countries in chaos will be excluded.
- Many of President Obama's executive orders are being rescinded and regulations are being reduced - a review of Dodd-Frank financial regulations; and end to the "war on coal"; approval of the Dakota Access and Keystone XL pipelines; a stop in funding for foreign agencies which perform abortions; tightening of restrictions on lobbyists; an effort to reduce regulation in each federal agency.
We may have lost some perspective in the euphoria following a surprise victory - we didn't get into this shape in a year, or even in the eight years of Obama. The debt has been building for decades; the acrimony in Washington came long before Trump; the government has been growing since George Washington. Trump has put down some markers on behalf of the American middle class, but it takes a lot of ocean to turn an aircraft carrier.
bill bowen - 3/31/17