TaxVox Trump’s Choice: A Wall Or a Tax Cut
Howard Gleckman
Display Date

The many promises President Trump made last night in Phoenix included a tax cut for business and middle-class families, and congressional approval of taxpayer money to build a border wall with Mexico even at the cost of a government shutdown. But it is a near-certainty that the president will not get both in 2017. He may not get either but at best he faces a classic zero-sum choice: The more Congress focuses time and energy on one, the more it will distract from the other.  

That means the president is going to have to decide, very soon, how he wants the fall policy debate to play out. Does he want Congress to spend the next few months battling over the budget and funding a border wall? Or does he want lawmakers to try to pass a tax cut? If he does not develop and sell a coherent policy choice to Congress when it returns to Washington in a couple of weeks, it is likely that the congressional GOP leadership will choose for him.

In some ways, it may already have. Senate Majority Leader Mitch McConnell (R-KY), whose relationship with Trump has turned icy, has made no secret that he wants to clear the legislative decks to make room for a tax bill. He’s said he does not want to revisit a health reform bill, he’s vowed to pass a quick extension of the debt limit, and he’s quietly been working with his Democratic counterpart Chuck Schumer (D-NY) to work out a bipartisan spending deal before the fiscal year ends on Sept. 30.

That agreement will not include money for a border wall. Schumer, who has already called Trump’s bluff once on the issue, is likely to do it again. And McConnell may go along.

The story in the House, which has already passed $1.6 billion in border wall funding, is more complicated. Speaker Paul Ryan (R-WI) has made tax reform a top personal priority for years and has shown little interest in a wall. Yet, his caucus includes many immigration hawks who will not easily give up what may be their best opportunity to fund the barrier. Ryan, like Trump, may have to make a tough choice.

The Administration and Hill Republicans will be under enormous pressure from business interests to ditch a wall that represents an immigration policy much of the business community opposes and focus instead on tax cuts, which have broad support.  Business is even more worried about a government shutdown.

At the same time, the wall is an important symbol to much of the Trump base and seemingly to the president himself, who has repeatedly promised a “beautiful” barrier with Mexico.

Then there are the internal administration battles. Most of Trump’s own economic team also seems to favor a tax cut. But despite Trump’s recent firing of Stephen Bannon, the White House staff still includes more than a few immigration hard-liners.

Trump’s choice won’t be easy. But he’ll have to make it, and soon, if he wants a major legislative success before year-end.

 

Tags tax reform tax cuts Donald Trump border wall Congress Mitch McConnell Paul Ryan
Primary topic Campaigns, Proposals, and Reforms
Research Area Fundamental reform proposals