Chaos within the Trump White House has placed a new hurdle in front of Republicans' goals of enacting health care and tax reform this year.
This week, the Senate's confirmation of Steven Mnuchin as Treasury secretary initially looked like a pivot point for the administration to accelerate its efforts to achieve sweeping policy changes. Mnuchin will be a central player in forging the administration's tax plan, making him one of a small handful of aides who can fill in the details of the "phenomenal" proposal President Donald Trump has vowed to unveil within weeks.
But the forced resignation of National Security Advisor Michael Flynn, less than a month into the administration, has now seized the attention of senior White House aides. Coupled with the scramble to fight adverse court rulings concerning the president's travel ban, Flynn's resignation casts doubt on the ability of the White House to give congressional Republicans the policy answers they need before undertaking immense and risky political tasks.
"They've got to thread some needles here," said former lawmaker Tom Davis, who served in the House Republican leadership. Trump "needs competent people around him. It's pretty clear he's got no one around him who understands government, … who's been in government."
The challenges would be enormous even with a smoothly functioning White House. Republicans who have railed against Obamacare for years are suddenly confronting the backlash over the prospect of repealing it and eliminating the source of health coverage for 20 million Americans while trying to figure out how to replace it with something better and cheaper.
On tax reform, Republican lawmakers are trying to balance the competing demands of lowering corporate and individual rates while not increasing the budget deficit. Increasingly, participants in the process see the key decision as being whether to include the House GOP's proposal for a "border adjustment tax," which raises revenue that is crucial for hopes of lowering corporate rates, individual rates, or both.
Though House Ways and Means Committee Chairman Kevin Brady strongly favors the idea, Republican senators have reservations, dramatized last week in a withering public letter from Republican Sen. David Perdue of Georgia denouncing it. A strong endorsement from Trump — who has sent mixed signals so far — appears to be the only way of salvaging border adjustability.
Though Trump has been president for only 3½ weeks, lawmakers see a relatively narrow window of opportunity to act before the pressures of 2018 mid-term elections make their tasks even harder. That's why they planned on a rapid-fire schedule of passing two budget resolutions — one for 2017 and one for 2018 — and using short-cuts in congressional rules to bypass Democratic filibusters and approve health reform and tax reform by year's end.
That plan is already behind schedule, which is why longtime Washington budget analyst Stan Collender warned in Forbes this week: "The worst-case scenario is that the once slam-dunk GOP grand scheme will end up preventing both ACA repeal and tax reform from happening at all."
Davis, the former House Republican strategist, says both can still happen. But neither is assured.
"It's always been about 50-50," he said. "There was just a lot of happy talk at the beginning. Reality is setting in."
