- President Trump’s speech on tax reform was good but it is unlikely that his current efforts will do much to make tax reform happen.
- Tax reform is possible but first, Trump needs to get out of the way and let Congress get to work.
- Tax reform isn’t likely to get done this year but sometime in 2018.
It is most unlikely that President Trump‘s current efforts will do much to move tax reform forward and into law.
Trump’s speech on tax reform this week was good but it was too little too late. Had the president given this speech in March or April, perhaps it would have been better received and seen as helpful. However, at this point, seven-plus months into his administration with some history in our rear-view mirrors, more is expected. We need details!
So far, the administration has only produced for the public limited details on a single page regarding tax reform. It’s really remarkable that a key campaign issue like tax reform has been given such short shrift. Tax reform can help fuel-inject the economic engine of our democracy. The mere possibility that tax reform could happen has buoyed markets with some bubblicious euphoria (although that seems to be waning now). Suffice it to say, the president and his administration should have done much more.
The president doesn’t seem to care much what’s actually contained in tax reform. In Missouri, he said that he hopes Congress doesn’t disappoint him by not passing tax reform and that if the senator from Missouri (Democrat Claire McCaskill) doesn’t support tax reform, she should be voted out of office. The president appears that he will not only support whatever Congress approves, but campaign against those who don’t support this sight unseen mystical legislation.
Like it or not, at this point, Trump is only a bit player on tax reform. The Hill may humor him, but that’s about all. I won’t go through the list, but among the matters that have depreciated the president’s ability to lead include the Russia investigation, his Charlottesville remarks, position reversals and bully and bellicose behavior. To top it off, much of the president’s angry antagonism is directed at members—even the leaders—of his own Republican Party in the House and Senate who will be called upon to do things like, for example, vote upon tax reform!
Treasury Secretary Steven Mnuchin, the Director of the National Economic Council Gary Cohn and their staffs have been working behind the scenes with the committees of jurisdiction on tax reform (the Senate Finance Committee and House Ways and Means Committee). They have obviously discussed more than is on the single page the administration has released.
Secretary Mnuchin told CNBC that some sort of “blueprint” with additional details may become available soon. That’s fine, but it will only take them so far. When your principle—in this case the president—has few gut-guiding policy positions and hair-trigger tweeting digits, members of his administration can’t truly negotiate the nitty gritty or make things done deals. They are crippled on negotiating critical policy matters.
If the president lets the leaders in Congress do this as best they can, there’s still some hope that tax reform could eventually become a reality.
I worked on Capitol Hill for many years, including for the Senate Majority Leader (Democrat Tom Daschle of South Dakota). He successfully worked to pass a lot of legislation collaborating with Republicans on the Hill and with Republican President George W. Bush. Senator Daschle would often ask staff, “How do we get to YES?” Contrary to what the president espoused as a candidate and in his book, negotiating on Capitol Hill is not about the art of the deal, but about the art of the possible. It requires both conviction and true temperament. The president appears to have neither. He’s proven to be a dreadful Dealmaker in Chief. He’s both wishy and washy, and one never knows when his spin cycle will be engaged, potentially producing some heavy load agitation to those on the Hill. He’s not good at getting to YES.
Many of us would like to see tax reform, including middle class tax cuts, succeed (certainly not just corporate tax cuts).
The president’s mission and mantra on tax reform should be: 1) Get outta the way; 2) Continue to charge your staff with supporting the efforts on the Hill; and 3) Don’t mess things up.
If the president lets the leaders in Congress do this as best they can, there’s still some hope that tax reform could eventually become a reality. Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul Ryan (R-WI) are good at gathering votes, despite what the president says and tweets about them. In fact, any such initiative would have a greater chance of becoming law if at least some Democrats supported the measure. Laws are almost always better when policy has migrated to the middle.
Secretary Mnuchin told CNBC that he expects tax reform to be done this year. I suppose it is good he is so positive, but I think that is unlikely. Nevertheless, it’s still possible that something good and genuine tax reform could be achieved in the first half of 2018 (before the rhetoric gets really raunchy and rough as part of next year’s mid-term election campaigns).
Let’s hope fulsome tax reform does come to pass. I wish everyone involved a lot of luck. It would be good for individuals and for corporations, good for our economy and good our country as a whole.