Translating Trump’s Speech Into Reality

March 02, 2017

The man in the Oval Office has finally captured that most elusive of Washington spirits: a “presidential” tone. In his Tuesday speech to a joint session of Congress, President Trump offered optimism and hope. The dark vision of his inaugural address was gone, as were the personal insults and harsh attacks that routinely appear in his rallies and tweets. 

In their place were moments of grace, most especially when Mr. Trump introduced the widow of Navy SEAL Ryan Owens, promising that Americans will never forget her husband, who sacrificed his life Jan. 29 in Yemen on behalf of comrades and country.

Absent, too, was the usual rush of stock phrases masquerading as policy. Instead, the president offered serious ideas in a steady, deliberate voice.

Mr. Trump’s speech did little to sway congressional Democrats, most of whom could barely bring themselves to stand when he entered the House chamber. But they were not Mr. Trump’s target audience. He aimed his speech at those voters who reluctantly backed him or begrudgingly voted for Hillary Clinton, thinking as they did that America could do better. On Tuesday those voters were given hope that America just might be able to.

Delivering the speech, however, will be much easier than delivering upon it. No one should underestimate how difficult it will be to translate Mr. Trump’s goals into legislative accomplishments.

The most important priority should be pro-growth tax reform. It is essential to business and consumer confidence. The consequences of failing to pass a robust tax cut would be economically damaging and politically devastating.

Yet the many contentious issues that surround such legislation can become dizzying: What should be the new rates for personal and business taxes? Which deductions should be trimmed or killed? What should the effective date be for the bill?

Because few Democrats are likely to support a tax cut, the most difficult issues are those that could split Republicans. Should the plan include a border-adjustment tax—a 20% levy on imports offset by a 20% tax cut on exports? Must the plan be revenue neutral—though partially paid for by increased economic growth—or can it simply add to the deficit? Even a few Republican defections over these questions could slow down or scuttle tax reform. 

Next on the priority list is replacing ObamaCare. Legislation to do so is much further along than is commonly thought, and its passage depends less on the White House than on Tom Price, the secretary of health and human services. But here again, congressional Republicans are divided. Did they mean it when they said “repeal and replace,” or were they dissembling about the “replace” part? In short, should the plan include tax credits to help low-income workers pay for health insurance?

There’s deep division on that question. Some conservatives object that tax credits would be a new entitlement. This view forgets that employer-provided health care already depends on favorable treatment in the tax code. It also ignores the benefits of empowering individuals and markets rather than bureaucrats and regulators. Look at Medicare Part D, which gives seniors choice. It is a wildly popular program that for its first decade came in 45% under the Congressional Budget Office’s cost estimate when it passed.

Mr. Trump’s speech also touched on contentious budgetary questions. He wants a 10% increase in the defense budget, paid for by cuts in domestic discretionary spending. Although Republicans favor beefing up the military, this will require 60 votes in the Senate and Democrats are unlikely to support the domestic spending cuts. President Trump suggested that his $1 trillion infrastructure program would be “financed through both public and private capital.” The “public” portion will meet stiff resistance in Republican ranks. Approving a budget resolution, raising the debt ceiling and passing appropriation bills will be difficult, especially if either centrist Republicans or the House Freedom Caucus balks.

Congressional Republicans still worry that the last person to talk to the president is the one who influences him most. If that dynamic provokes Mr. Trump to tweet opposition to a specific bill, it could make passage near impossible.

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Despite Mr. Trump’s fine address Tuesday, he and congressional Republicans face a perilous year politically. The White House should avoid pressing for Congress to accomplish too much too quickly, especially if it is not yet providing the focus and air cover lawmakers need to keep their caucus united.

Right now, focus and cooperation are the operative words, and reforming the tax code and health-care system the top priorities. They will be the keys to making Donald Trump’s first year as successful as his Tuesday speech.

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