President Donald Trump is reeling after his first major legislative defeat, and is reportedly changing his plans to score some wins.
According to reports, Trump is making changes to two of his biggest economic agenda items — tax reform and infrastructure spending — after the GOP to reform healthcare fell apart on Friday.
After the American Health Care Act — the Republican plan to repeal and replace Obamacare — was pulled from a planned vote on the House floor Friday due to disagreements between moderate and conservative factions of the GOP, Trump is looking to find bipartisan efforts that can be achieved more simply.
To achieve a signature win, Trump is planning to move up the timetable on large-scale infrastructure spending to this year, reported Jonathan Swan at Axios, citing a source in the White House.
Trump promised $US1 trillion in infrastructure spending through public and private investment on America’s roads, bridges, airports, and more during his campaign, and reiterated that desire soon after his inauguration. However. reports suggested that Trump had decided to push that part of his agenda back to 2018 and focus on other aspects of his agenda.
Now, according to Axios, the need to establish this bipartisan win could shift forward the timetable for Trump’s infrastructure plan to some time in 2017.
This would give Trump a popular legislative victory, show he can work with Democrats, and possibly push economic growth closer to his stated goal of 4% annual GDP growth (though Trump and his administration officials have talked that down toward 3% annual growth).
Additionally, Axios reported that the investment may come at the same time Trump and the GOP attempt to cut taxes. Both House Speaker Paul Ryan and Trump said tax cuts were the next issue they would tackle after pulling the AHCA from the House floor on Friday.
The tax plan, however, may not be as generous as originally thought.
During his campaign, a central part of Trump’s economic plan was to cut the federal statutory corporate tax rate from its current 35% to 15%.
However, this may have been adjusted a bit, according to Andrew Ross Sorkin at the New York Times citing sources with knowledge of the plans.
Trump himself shifted the expectations when he told a group of manufacturing CEOs that the rate would be cut to “15 to 20%” at a meeting in February.
Now, said Sorkin, the plan for tax cuts is starting at a 20% corporate rate and could be even higher, possibly up to the 28% that was suggested by President Barack Obama in 2012 and 2013.
This would still be a cut and revenue neutral, wrote Sorkin, but it is a far cry from the 15% continually promised by Trump and may make Wall Street rethink its forecasts for increased profits that would come as a result of lower tax bills.
The smaller cut may be more palatable for Democrats, and provide some bipartisan cover to make sure the plan does not slip through the same cracks in the GOP conference that doomed the AHCA.
As Trump attempts to regroup from the “Trumpcare” debacle and move forward with the passage of significant legislation, it appears his administration is willing to reconsider its policy goals and their timetables.