Trump’s Softer Tone Masks Hard Road Ahead for Agenda in Congress

  • A speech aimed at the political center papers over policies
  • Infighting and confusion have stalled legislative priorities

Trump: America Is Once Again Ready to Lead

President Donald Trump on Tuesday cast aside the dark rhetoric of carnage and conflict that defined the start of his administration and left in its place a recitation of familiar campaign promises with few details on how he’d turn them into reality.

His first address to Congress featured an Obamacare repeal, a $1 trillion infrastructure plan, an immigration crackdown and a defense buildup. Designed to win the nation’s center, Trump’s remarks sprinkled patriotism and optimism over a politically divisive platform, and his calm and collected delivery won immediate applause among political pundits.

Yet governing requires Trump to provide direction, and there the speech fell far short of what many voters, lawmakers and investors said they wanted to hear. It’s unlikely to overcome the infighting and confusion that has stalled his legislative priorities on Capitol Hill.

Trump’s Address to Congress in Three Minutes.

Source: Bloomberg

Republicans indicated after the speech they were fine with being left to sort out the details. House Homeland Security Chairman Mike McCaul said the president presented himself in a more visionary and inclusive way and said it’s up to Congress to fill in the blanks on his agenda.

“This guy has shown he’s a CEO and in a very short period of time he’s willing to take bold steps very quickly,” McCaul, a Texas Republican, said in an interview afterward. “Sometimes the executive orders are not worded just right and they’re going to go back and fix some of those. But he’s very action-oriented and he wants to change the country.”

Scarce Details

During the speech, Trump offered an ambiguous opening on immigration, saying “real and positive immigration reform is possible." That followed a lunch conversation in which he told network television anchors "the time is right" for a compromise immigration bill. Still, he hewed to the tough rhetoric of his campaign, promising to kick off construction of his "great, great wall" on the southern border and recognizing families he had invited as his guests whose relatives had been killed by immigrants who entered the country illegally.

On health care, Trump told lawmakers they should repeal and replace the Affordable Care Act. But beyond vague guidelines -- an endorsement of tax credits, protections for those with pre-existing conditions, and changes to Medicaid funding -- he delivered little in the way of specifics. That’s little solace to Republicans on Capitol Hill struggling to craft a package that could garner support within their own party, and nervous about Trump’s commitment to an effort certain to prove politically challenging.

Vice President Mike Pence said Trump’s approach was deliberate.

“You saw him do what great presidents do -- and that is he laid out the principles and the framework for replacing Obamacare,” Pence said Wednesday on MSNBC’s “Morning Joe” program. “For the president to do what he did last night -- to show his determination for a better health-care system and then tell the Congress ‘Here’s the framework of what I want you to send me to create better outcomes for the American people’ was exactly the kind of leadership the American people wanted to see.”

Read more: Why repealing Obamacare is harder than it sounds - a Q&A

And yet Trump’s discussion of health care was perhaps the most detail offered by the president on any particular policy. Trump skipped over his desire to loosen financial industry regulation, offered little insight into whether he’d support Republican tax proposals to cut rates and impose a tax on imported goods, and didn’t detail the budget cuts his administration is proposing to pay for higher military spending.

He also didn’t talk about how his broad policy strokes would fit within the $4 trillion federal budget without ballooning the deficit.

Market Response

The response from financial markets was muted, with the dollar and U.S. stocks futures easing slightly during the speech. Contracts on the benchmark U.S. S&P 500 Index, which had been up 0.3 percent going into the speech, pared their gains as the president was speaking to 0.2 percent at 9:54 p.m. in New York. The dollar trimmed an earlier advance, only to recover all of it after the speech concluded.

"All markets including equity markets will be wanting more details primarily around tax reform and its impact to corporate and individuals’ balance sheets," said Sean Simko, who manages $8 billion in fixed-income assets at SEI Investments Co. in Oaks, Pennsylvania. "It’s just a matter of how long investors are willing to accept the uncertainty."

Quincy Krosby, a market strategist at Prudential Financial Inc., which oversees about $1.3 trillion, said Trump’s "confident tone may just give investors an excuse to keep the embrace intact --- for now."

"Investors do need clarity," she said in an e-mail. "Immediately following the speech fellow Republicans questioned how these programs are going to be paid for. Herein lie the obstacles he is going to face."

The address was "inspiring" to independent voters and a "chance to change the trajectory," said Tom Davis, a former Republican member of Congress from Virginia who has headed the party’s national congressional campaign apparatus.

But "you’ve got to translate this poetry into the prose of legislation," Davis said. "He’s got to get the House Republicans together and make some pretty tough decisions -- and they need to do it pretty quickly."

Trailing Predecessors

Trump’s light-on-details speech was a marked contrast from the first congressional addresses of recent predecessors.

Barack Obama had already signed his $787 billion stimulus bill into law at the same point in his presidency. When he spoke to Congress, Obama detailed specific elements of a budget the White House delivered later that week. That included proposals that later became signature accomplishments of the former president’s first term, including a heavy investment in green energy technology and a package of new financial-sector regulations that Trump now seeks to roll back.

George W. Bush also provided specific details about his budget proposal, laying down concrete markers for ideas on increasing Medicare funding and military benefits. He laid out his proposed new income tax brackets, as well as specific new deductions he favored.

Trump’s tonal shift is a tacit acknowledgment that his public approval trails not only his two most recent predecessors, but all presidents in modern history at this point in their terms.

More than half of Americans say the early stumbles of Trump’s administration were indicative of "real problems" with his administration, and he’s the only president in history to enter office with a net negative approval rating, according to an NBC News/Wall Street Journal poll released Monday. While 44 percent of Americans approve of the job he’s done, 48 percent disapprove.

The address also sets a standard that will be difficult for the president to meet. 

On Tuesday night, he repeatedly returned to the idea that his is a post-partisan agenda, shattering traditional political, racial, and socioeconomic divisions that defined politics during the Obama years. He positioned himself as a willing leader of bipartisan negotiations over tough topics while deriding "trivial fights." 

Trump’s Obsessions

But there is clear dissonance with the early weeks of his presidency.

Trump has obsessed over trivial fights, openly bickering with news outlets over coverage he doesn’t like and picking spats with not only political foes, but celebrities like his "Celebrity Apprentice" replacement Arnold Schwarzenegger. He’s also peppered nearly every speech with references to his electoral victory, and seen news cycles lost when his penchant for exaggeration and animosity turned into distraction.

Yet on Tuesday, "the outsized personality, reality-show persona of Donald Trump" was toned down, said Barbara Perry, a presidential historian at the University of Virginia’s Miller Center of Public Affairs.

Trump may enjoy a bump in popularity from an address in which he appeared poised and presidential. But the speech only underscores that Trump is still trying to build political capital at a phase of his presidency in which predecessors usually were already spending it on legislative objectives.

His next test is whether exceeding low expectations will yield governing momentum, and if so, whether he can harness it.

— With assistance by Toluse Olorunnipa, Livia Yap, Oliver Renick, and Jeremy Herron

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE