Tax reform was never going to be easy. But now, flailing politically in the wake of the health care debacle, GOP fissures are already clouding the party's efforts to overhaul the tax code. The White House likely won't be keen to let Paul Ryan's House steer the effort after Ryan’s dismal legislative debut. Ryan likewise feels the same distrust of a White House that has pointed the finger at everyone and anyone associated with the health care reform defeat—except Donald Trump.
Even within the Trump administration, Treasury Secretary Steve Mnuchin is already warring over taxes with conservatives, both within his own agency and in the West Wing.
And then there's the ideological divide within the GOP caucus itself, between members who want to spend more money bulking up the military and those who have historically refused to spend more money on anything that increases the deficit.
If Republicans manage to get anything through on taxes, it will be the result of sheer desperation, writes Alan Rappeport:
Under pressure to get something done, some Republican deficit hawks appear ready to abandon the fiscal rectitude that they embraced during the Obama administration to help salvage Mr. Trump’s agenda.
In a rare shift, Representative Mark Meadows of North Carolina, whose House Freedom Caucus effectively torpedoed the health legislation, said Sunday on ABC’s “This Week” that he would not protest if tax cuts were not offset by new spending cuts or new streams of revenue, such as an import tax. [...]
“Does it have to be fully offset? My personal response is no.”
Of course offsets aren't necessary now that Barack Obama isn't president.
While Ryan originally had big plans for tax reform that included a new import tax and folding massive cuts into the now-failed health care bill, Trump may opt for something much simpler involving basic cuts on individual and corporate taxes.
But even a small win on taxes won’t mollify Trump supporters, as this advice from a tea partier who hasn’t yet tired of “all the winning” proves.
“They need to cut taxes, cut spending, and build the wall,” said Judson Phillips, the founder of the conservative group Tea Party Nation. “If they will do that, the base will be forever in love with them.” He said he did not want Mr. Trump to get bogged down in Mr. Ryan’s complicated tax agenda.
There's no way to “cut taxes, cut spending, and build the wall” simultaneously based on Trump's promises and priorities. Trump’s already committed to a major cash infusion at the Pentagon along with building a $20- to $50-billion border wall (i.e. increased spending—sorry, Judson).
So even if Trump manages to pass a trimmed down tax cut measure—a big IF—he won't make good on spending cuts. And he certainly won't be decreasing the deficit/debt.
But it appears the House maniacs known as the "Freedom Caucus"—who just killed the GOP’s health repeal effort after shutting down the government to push repeal in 2013—are now willing to look the other the way as Trump blows a hole in the nation's deficit.