Tax reform is hard work, despite what President Trump said during the House’s attempt to repeal Obamacare. It requires filling in a lot of details and anticipating opposition from business and interest groups that don’t like the idea of winners and losers. Despite talking about tax reform as a centerpiece of their agenda since 2010, the GOP really hasn’t done much of the work to build support within their caucus and the public at large for a real plan.
And it isn’t clear when they’ll be able to do that. To say that the Trump administration has dealt with distractions would be the world’s biggest understatement. Those distractions have taken their toll on congressional Republicans, who have shown a remarkable inability to multitask. The Russia investigations, the scandals over tweets, Trump’s erratic foreign policy, and the turmoil in the White House (which still might not be over, if reports of Steve Bannon’s imminent dismissal are to be believed) all have sapped Republican legislative momentum. Numerous high-profile senators are deeply engaged in the Russian matter, and GOP lawmakers are asked repeatedly about it by the press. (It even came up during the Virginia gubernatorial debate between Republican Ed Gillespie and Democrat Ralph Northam.)
House Speaker Paul Ryan and other committed tax reformers would tell you that Trump’s problems won’t influence their efforts to push a major tax bill in the fall. But it’s clear that they have and will in the future. For one thing, the GOP can’t really engage the public about the need for tax reform while the media refuses to cover anything other than Trump. While support from the business community is important for tax reform (and already largely present), Republicans need individuals (who are voters, after all) to feel that they are benefiting from the legislation as well. The lack of public support was a major factor in the collapse of Republican healthcare efforts.
Trump’s crises also underline the other critical point about the GOP’s lawmaking efforts – their inability to do multiple things at once. While the House was desperately tweaking its healthcare reform bill to get 218 members to vote for it, the Senate was bogged down confirming Trump’s Cabinet. When it came time for the Senate to take up its own version of repeal and replace, it was obvious that Majority Leader Mitch McConnell was starting basically from scratch.
During the tortuous healthcare reform effort, observers were assured by Republican leaders that work on tax reform was proceeding. But we’ve seen no evidence of this, other than a vague statement by the so-called Big Six saying that the House’s border adjustment tax is dead. The House passed an ACA repeal bill on May 4. There still has been no real outline of tax reform. Instead, members seem focused on the outcry over the failed repeal effort, whether Trump will fire Robert Mueller, and, now, the prospects of a government shutdown or debt default this fall.
The latter highlights the fact that the Republican agenda will never be entirely clear. Congress must deal with the budget and the debt ceiling when it returns from the August recess. It needs to pass a budget to have reconciliation instructions for tax reform, something that is critical because of near universal Democratic opposition. The GOP has a lot to do just to keep the government running, and that doesn’t bode well for its efforts to accomplish something truly difficult (like, say, completely overhauling the nation’s tax system).
Republicans need to pass a tax bill, even if it is just a 2001-style tax cut. The business community is counting on it. Wall Street is counting on it. Republican donors and voters are counting on it. Failure will likely doom the party in the 2018 midterm elections and put a major dent in the economy (particularly the stock market). However, it’s not clear that the GOP can overcome all the Trump-related distractions buzzing around Washington long enough to get the entire caucus on the same page and start winning the public relations battle with the press.