Rest in peace, Trump agenda?
After the stinging defeat of the GOP's bill to reform Obamacare, the White House and Congress were left reeling amid finger-pointing over who shouldered the blame. Meanwhile, a number of political veterans say President Donald Trump's entire economic agenda could be imperiled by the failure to pass an Obamacare replacement — which could also mean the market may have to lower its expectations.
Now that Obamacare will remain in place, analysts say there are numerous risks building to Trump's ambitious plans for the economy. The health care bill's failure also creates a budget crunch that could make tax reform much more difficult to accomplish.
Although many observers also lashed out at House Speaker Paul Ryan for a plan that was largely authored by him, "The big loser is going to be the president," Larry Lindsey, former economic adviser for George W. Bush, told CNBC's "Power Lunch" Friday.
"Yes, this makes tax reform more difficult but not impossible," Speaker Ryan said in a briefing Friday evening. "We will proceed, and we will continue with tax reform."
However, Lindsey said one of the "silliest" things he's heard from people is that the health-care proposal not passing will be good for Trump's tax reform. "Absolutely not," he added.
"They might move on to [tax reform] next, but when you have a president who can't deliver his own caucus, then the president's position will be weakened on all issues," Lindsey said. "If you're in Congress and you don't like something, you now have an example of how you can 'roll' the president."
During a briefing with reporters on Friday, White House spokesman Sean Spicer acknowledged Friday the budgetary conundrum that could arise, but said there was "huge appetite for tax reform."
Nevertheless, Trump has now been dealt humbling defeats on several fronts, and his opponents sense blood in the water. Meanwhile, expectations for tax reform, the linchpin of a brisk rally that has carried major stock market indexes to new highs, are dwindling.
A replacement for Obamacare "was necessary for budgetary reasons, for tax reform, because it was a revenue gainer," said Lindsey. Trump's goals for economic growth should also be questioned now, he warned.