Trump’s Agenda Faces Tough Fiscal Reality After State of the UnionBy and
Tax cut of $1.5 trillion projected to balloon federal deficit
President has backed away from proposal for welfare overhaul
President Donald Trump plans to promote the Republican tax overhaul he signed into law in his first State of the Union speech on Tuesday night, but fiscal headwinds mean he’s likely to have less legislative success in his second year in office.
Democrats and Republicans have voiced concerns about the administration’s approach to financing a large-scale infrastructure program and military investment -- two key themes expected in Trump’s speech -- after passing a $1.5 trillion tax bill that’s projected to balloon the federal deficit.
“He has to get some credit for the tax bill but it’s going to turn out to be perhaps a Pyrrhic victory because he’s not going to be able to get anything else done this year,” Steve Bell, a former Republican Senate Budget Committee staff director, said in an interview. “You are not going to get a major infrastructure bill.”
Rather than laying out an ambitious agenda of new legislative proposals for 2018, Trump’s State of the Union address will likely focus on the economy, his accomplishments so far and pursuits that have been part of his agenda since the 2016 campaign, said Bell, now a senior adviser at the Bipartisan Policy Center.
Trump may have come to anticipate fierce resistance ahead.
In November, he said that overhauling the nation’s welfare programs would be a top priority for 2018 following passage of the tax bill. Senate Majority Leader Mitch McConnell, however, soon threw cold water on that approach, indicating there would be no Democratic support for cutting benefits for the poor to help pay for the tax cuts.
The president has since backed off, telling reporters earlier this month that such a bill might have to hold for “a little bit later.”
Trump’s speech comes about a week before the government will again run out of funding without congressional action, and a deadline to raise the legal debt limit to avoid a U.S. default also lies ahead.
In addition to infrastructure, Trump’s speech will focus on immigration, trade and national security, according to senior administration officials who briefed reporters Friday on condition of anonymity. Unlike previous presidents, who used their State of the Union addresses to urge Congress to pass a long list of legislative proposals, Trump’s address will likely feature fewer such requests.
In President Barack Obama’s first official State of the Union, he called for sweeping new fees on the country’s largest banks, new tax credits and grants to pay for college. He also called for a three-year freeze on discretionary federal spending.
President George W. Bush’s first address debuted the "axis of evil" and called for increased homeland security spending. And Bill Clinton, in his 1994 speech, called for tougher sentences for hardened criminals, an assault weapons ban, and the health care plan devised by first lady Hillary Clinton.
Passing major legislation will be already be complicated this year as November midterm elections approach. On top of that, Democrats and Republicans are squabbling over funding priorities and the national debt, which is approaching $21 trillion.
Lawmakers have yet to pass a budget this fiscal year, approving four continuing resolutions since Oct. 1 and allowing a brief lapse in funding earlier this month. Lawmakers say they will need at least one more continuing resolution by Feb. 8 before reaching a longer term spending deal.
Acknowledging the lack of bipartisanship during Trump’s first year -- no Democrats voted for the tax bill -- White House officials have said the president will seek to reach across the aisle with his speech.
“I think we can do a great infrastructure bill,” Trump told reporters Monday. “I think we’re going to have a lot of support from both sides, and I’d like to get it done as quickly as possible.”
But with Trump’s approval ratings hovering below 40 percent, both Republicans and Democrats facing re-election in November may be inclined to distance themselves from the president, imperiling his legislative agenda further, said Shawn Golhar, head of public policy research at Barclays Plc.
Republicans, who have long campaigned on fiscal responsibility, may balk at the taxpayer cost of an infrastructure program given the growing deficit, he said. If the president “wants to spend a lot of money on a big spending project, it doesn’t seem like something they’d want to go along with, ” Golhar added.
Democrats have already expressed doubts about Trump’s infrastructure proposal. It offers at least $200 billion in federal money over 10 years to spur states, localities and the private sector to spend as much as $1.6 trillion.
“It’s a ‘nothing burger,”’ Oregon Representative Pete DeFazio, the top Democrat on the House Transportation and Infrastructure Committee, said of the administration’s proposal in a Jan. 9 interview. “It has to have real investment, not just a bunch of polemics and ideology pretending to be taking major steps to rebuild our infrastructure.”
Trump frequently warned about the deficit under Obama, tweeting that his predecessor was "reckless" with federal borrowing. In a Twitter post in 2013, he claimed that it would take “not very long” for him to erase the debt upon being elected president.
“In the last eight years, the past administration has put on more new debt than nearly all of the other presidents combined,” Trump said last year during his joint address to Congress.
As the federal debt has continued to increase under his watch, Trump has talked about it less often.
The Treasury Department said Monday that it expects to borrow about $441 billion this quarter, the largest amount in eight years. Some forecasters, including Bell, have said federal deficits could top $1 trillion next year.
Both parties have switched their position on the deficit as power has shifted in Washington, said Tom Davis, a former House Republican who was chairman of the National Republican Congressional Committee.
“The deficit was very important a few years ago,” Davis said. “Now, it’s less important.”
— With assistance by Mark Niquette