Trump vs. conservatives

WASHINGTON—On March 21, in the heat of the political wrangling over the White House-approved healthcare overhaul, President Donald Trump traveled to the U.S. Capitol to close the deal with the House Republican conference. Conservatives, calling the plan “Obamacare Lite,” had said the bill wouldn’t lower health insurance premiums, while moderates complained it would leave too many Americans without health insurance (24 million, according to the Congressional Budget Office).

“I honestly think many of you will lose your seats in 2018 if you don’t get this done,” he reportedly told lawmakers. “And I don’t care if the press prints that.”

Turning to North Carolina Rep. Mark Meadows—the man who led the effort to oust former House Speaker John Boehner—Trump issued a warning: “Oh, Mark, I’m gonna come after you.”

Smiles and laughter rippled through the room, but the remark also captured the tension between legislators elected in the tea party wave of 2010 and the new administration elected on more populist promises than fiscal conservatism.

The bill was the first test of whether conservatives in the GOP conference would be willing to buck their own president, and the resounding answer came in late March: yes. Enough House conservatives opposed the healthcare bill that House Speaker Paul Ryan had to pull it from consideration, minutes before a scheduled vote on March 24.

The healthcare setback carried sweeping implications for future battles: It showed House conservatives will operate similarly to the way they did under Obama and Trump will directly negotiate to close a deal.

What remains unknown: Can conservatives get to yes on major legislation, and will Trump keep negotiating with them or turn to Democrats?

More answers may come soon as numerous fiscal fights loom in coming months, including a debate over the debt ceiling and government funding that runs out on April 28. Congress must pass a spending bill to avoid a shutdown.

On March 16, Mick Mulvaney, director of the Office of Management and Budget, released the so-called “skinny budget,” a blueprint of the full White House request to come in May, and an important opening salvo in the complex budget process. The topline budget included domestic cuts, military increases, and a bottom line that didn’t balance, but Mulvaney said it was only an initial effort to implement Trump’s “America first” policy under existing law.

Republicans vowed to come back to healthcare, but they face a limited window: They’re using fiscal 2017 budget reconciliation—a maneuver that requires only 51 votes to clear the Senate—and the fiscal year ends at the end of September.

Republicans have already slotted fiscal 2018 budget reconciliation as the vehicle for overhauling the tax code—an effort Ryan insists has more support in the GOP than healthcare. Yet healthcare only involved one-sixth of the economy. Taxes affect everything.

Rep. Dave Brat, R-Va., the only economist in Congress, told me tax reform—and specifically lowering the corporate tax rate—is critical to get the GDP growth up to 4 percent.

That would open up budget room for Trump’s domestic agenda in the short term, he said, but the only way to deal with the “staggering” long-term budget problems is to take on entitlements, including Medicare, Medicaid, and Social Security. That suggests another political fight ahead, as Trump hasn’t wanted to cut popular entitlements.

Freshman Rep. Jim Banks, R-Ind., said the healthcare fight showed Trump is willing to engage and negotiate. Trump approved changes that prohibited states that had not already expanded Medicaid from doing so before expansion phased out; he made Medicaid dollars a block grant to states (instead of the current per-capita funding model); he allowed states to institute work requirements for Medicaid recipients; and he committed to keep language that reallocated Planned Parenthood funding and barred tax credits from being used for abortions.

That was enough for Banks to support the final bill, but not for many GOP conservatives—who have to grapple with their own political realities: “President Trump is very popular in my district,” said Banks, but “what’s most important to me is that my district recognizes I’m working hard to advance conservative principles.”

—Evan Wilt contributed to this story