After eight months of negotiations, White House officials and Republican leaders last week arrived at a secret, hard-fought compromise: They would push to lower the corporate tax rate to 20 percent.
On Sunday, President Trump walked alone to a group of reporters on a runway in New Jersey and told them his preference for the corporate tax: 15 percent.
It’s indicative of an approach Trump has employed throughout his presidency: He has taken a hands-off approach to working out policy details, keeping clear of granular discussions and declining to take a stand on the thorniest questions. When plans are almost ready, he has — again and again — demanded that they be, in vague terms, better.
The approach was successful as a presidential candidate: It allowed Trump to promise his presidency would yield big benefits for his supporters, But by not laying out details of how he planned to deliver, he left his opponents with little to latch onto.
As president, however, it has yet to yield a major legislative victory — despite Republicans controlling both the House and Senate.
“It’s the chickens coming home to roost,” said Douglas Holtz-Eakin, a former Congressional Budget Office director who advised Sen. John McCain (R-Ariz.) during his 2008 presidential run. “This operating style I don’t think serves the process very well, and I think he got trapped into it by not being specific enough on the campaign.”
Now, Trump and congressional Republicans are getting another chance to claim a big victory — an opportunity to rewrite the U.S. tax code for the first time in three decades. So far, Trump has shown no signs of modifying his approach.
After dozens of closed-door meetings and public hearings, the White House and GOP leaders have still not sorted through many of the most vital details of Trump’s promise to deliver the largest tax cut in U.S. history.
There is, in short, no hammered-out tax plan, only a nine-page framework of GOP goals that have yet to be filled in or agreed to. Lawmakers now plan to clash over the details, with the White House staying in touch but giving them room to negotiate.
They stuck with the 20 percent tax-rate target in the “unified framework” released Wednesday, but some people close to Trump fear he might waver again.
Speaking Wednesday in Indiana, Trump said the tax rate would end up being “no higher than 20 percent,” leaving the door open for him to keep trying to push it lower.
“These tax cuts are significant,” he said. “There’s never been tax cuts like we’re talking about.”
The nine-page document released Wednesday pales in scope to the 461-page tax plan the Reagan administration offered in 1985 that helped shepherd the last tax overhaul into law.
On health care, infrastructure, the deficit and a range of other issues, the Trump administration has stopped short of specifying its platform.
On Tuesday, Trump told a handful of Republicans and Democrats in a White House meeting that he was now opposed to public-private partnerships for infrastructure programs. He cited the example of a toll road in northern Indiana that fell into bankruptcy.
“He dismissed it categorically and said it doesn’t work,” said Rep. Brian Higgins (D-N.Y.), who brought up the issue with Trump at the White House. “And in fact, pointed to [Vice President Pence] and said they tried in their state and it didn’t work.”
Senior administration officials were flabbergasted. They had spent months designing a $1 trillion infrastructure plan that centered on the idea of privatizing roads, air traffic control systems and other networks. On Wednesday, they were still trying to sort through whether Trump had misspoken or changed policy.
Trump’s team had planned to issue his infrastructure plan in May, but they have been beset by delays, in part because they cannot agree on how to finance the entire operation.
The indecision has been most evident on health-care policy.
Trump vowed to roll back the Affordable Care Act on his first day in office, but the White House never advanced a single substantive health-care proposal, relying instead on Congress, which failed multiple times to enact changes into law. When the House passed a bill in June, Trump said he supported it and hosted a Rose Garden celebration with dozens of lawmakers.
He later complained to Senate Republicans that the bill was “mean” and said they needed to change it. He didn’t specify how.
Similarly, he has cast about for ways to construct a wall along the U.S. border with Mexico, but the Trump administration has not settled on any approach, and key decisions keep getting postponed.
His budget proposal was so sparse on details that the Congressional Budget Office said they could not adequately review it, adding that “the proposals . . . are in many cases not sufficiently specified,” and in some cases found the White House’s economic claims would “not be achievable.” There is not a complete White House plan to eliminate the deficit or expand access to health care, things that Trump has promised voters.
This is markedly different from past White House operations, which have often buried Capitol Hill in paperwork and policy proposals hoping to have a lead role in how bills are written.
President Barack Obama’s top aides in 2009 helped write a 1,000-page draft health-care bill that would serve as an initial iteration of the Affordable Care Act, drawing support and opposition to a debate that would last for months.
To be sure, that approach does not always work. The Clinton administration tried to play a lead role in the drafting of health-care changes, but Congress balked and it ended up a chief unfinished goal of Bill Clinton’s presidency.
Trump administration officials, speaking on the condition of anonymity to comment on sensitive discussions, said they took a cautious approach with the tax plan, in part to avoid looking as if they cut a secret deal without input from lawmakers. They also wanted to defer, at times, to lawmakers who had spent years working on tax cuts. National Economic Council Director Gary Cohn has said the plan was for the White House to serve as a “guiding light.”
But lawmakers and senior Capitol Hill aides were also skeptical that Cohn and Treasury Secretary Steven Mnuchin, their main interlocutors, could negotiate on behalf of Trump, who is famous for changing his mind on some occasions and refusing to budge on others.
White House officials say they learned a hard lesson from the failed effort to roll back the Affordable Care Act, which featured numerous competing GOP plans the party never coalesced around. By moving more slowly on tax cuts, White House officials hope, they have a greater chance to bring people aboard.
Those decisions will now be tested.
The Committee for a Responsible Federal Budget estimates that the new GOP framework would cut taxes by $5.8 trillion and recoup $3.6 trillion by eliminating mostly unspecified tax deductions that many companies will fight to preserve. Even if all those battles are won, it will lead to a $2.2 trillion gap in revenue over 10 years, the committee forecast, a level that could prove difficult to push through Congress.
Trump has shown an element of urgency on the tax push, though, and he has told aides he wants it completed by the end of the year. Still, Republican leaders struggled for months to reach agreements on specifics, at times leaving final decisions for later. For example, the tax framework does not mention raising taxes on hedge fund managers, even though Trump has promised to do that for months.
And negotiators haggled for weeks about a way to ensure the wealthy did not benefit disproportionately from the tax overhaul, but they never agreed on how to prevent it.
Republicans on Capitol Hill seemed willing to step in now and try to take the nine-page framework and mold it into a tax bill, which many of them say will give lawmakers a bigger say in the process.
“I’m actually grateful they’re letting us fill in many of the blanks,” said Rep. Carlos Curbelo (R-Fla.).
Mnuchin had long said the goal for the tax-cut bill was to pass it by August, but Republicans working on the plan didn’t even have the nine-page framework by then. Now, lawmakers have only a couple of months to decide which tax breaks to jettison, what changes should be permanent,and whether to prevent the wealthy from receiving too much as part of the deal. Administration officials want the tax deal to be finished by the end of the year.
As Republicans push forward, advisers to Trump’s predecessor warn that the White House has completely miscalculated the amount of planning and details necessary to convince the public that such a plan has been properly vetted.
“I’ve never seen an administration that so overpromised in terms of specific plans and underdelivered,” said Jason Furman, who served as deputy director of the National Economic Council and chairman of the Council of Economic Advisers during the Obama administration. “They promised detailed plans on everything and have put forward plans on nothing.”
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