Despite all the promises during the campaign trail, President Donald J. Trump failed to repeal and replace the Affordable Care Act (AKA ObamaCare). It was a stunning failure for the self-proclaimed “expert negotiator” who literally wrote the book on making deals.
Even though Republicans control Congress, their health-care bill could not amass enough support to become law, and House Speaker Paul Ryan pulled it before there could be an embarrassing repudiation on the house floor. This was a staggering defeat, and an epic fail for the Republican Party. Trump now says he will focus on tax reform (at least at this moment), but faces significant obstacles.
Trump’s modus operandi in the private sector was simply to use intimidation and strong-arm tactics to make deals, but that is not how the game is played in Washington D.C. Congress is a co-equal branch of government, and if it wants to block the President, Trump’s threats are meaningless. Trump told wavering Republican to support his health care reform or there will be dire consequences. That threat was ignored.
Trump tried to blame Democrats for this health care defeat, but the reality is much more complex. Trump didn’t have the mandate his predecessor had. Trump didn’t even win the popular vote, nor did the GOP speak with one cogent voice. There are many voices in their party, including unbending ideologues that merely dubbed his proposal ObamaCare lite. Those hardliners, who are mostly concentrated in the Freedom Caucus, have now shown they are willing to stand up to the President.
Even past successes show maintaining those reforms will be difficult. The most significant tax reform was introduced in 1986 by President Ronald Reagan. This was lauded as a victory for tax reform advocates, a simplified, easy to understand tax code. It lowered tax rates, but also eliminated loopholes to pay for those rates. Reagan worked with both Republicans and Democrats to get this historic bill signed into law. This was considered a scarce moment of bipartisan cooperation that seems almost impossible today.
However, this was merely a short-term, rare two-party victory. This is the political equivalent of calling the maiden voyage of the Titanic a success story. Even after Reagan’s tax reform, our tax system became ever more byzantine with the pervasive influence of lobbyists, and special and corporate interests. These respective interests carved special perks in the tax code far more generous than even before the tax reform legislation. One example is what is known as tax inversion where companies simply relocated overseas through mergers, avoiding taxes in the process.
This does not bode well for Trump’s tax reform plan. The complexity of the tax code already favors the haves over the have-nots. Take for instance, the corporate tax rate, critics properly point out that the statutory corporate is highest in the world – correct. But the average effective corporate tax rate drops considerably, relatively insignificant compared to the global average. Also, some companies such as GE received billions in refunds. For all the talk of a simplified tax system, the status quo likes the system the way it is now. In fact, the average effective corporate tax rate is far more competitive compared to other tax rates in the world.
Political reality is catching up with President Trump. His failed health care reform efforts are simply a precursor to his failure to pass substantive tax reform. Trump considers himself a skilled negotiator, but even he is coming to understand our government isn’t a business, and there are intractable influences that make change more difficult to implement; no matter the skill of the negotiator.
Matt Fecteau ([email protected]) of Pawtucket, Rhode Island was a Democratic candidate for office in 2014 and 2016. He is a former White House national security intern and Iraq War veteran. Follow him on Twitter @MatthewFecteau
Related Slideshow: Trump’s Proposed Budget Creates Winners and Losers in RI
The biggest winner in the Trump budget is military spending and correspondingly, many of Rhode Island’s largest private employers will see dramatic increased in spending.
General Dynamics/Electric Boat, Raytheon, and the Aquidneck Island defense-related companies will all see increase funding and Rhode Island will see job growth
Rhode Island’s public radio and television will be zeroed out of federal funding in FY18 under Trump's budget.
RIPBS’ General Manager David Piccerelli confirmed on Thursday that if the budget is adopted, the station would lose over $700,000, but said he is hopeful that funding can be restored.
In late February he appeared on GoLocal LIVE to talk about the importance of public broadcasting in Rhode Island.
According to the Corporation of Public Broadcasting, here is the funding to RI -- which would be cut.
Veterans' programs see a major boost in the Trump budget proposal — an increase of more than 6%.
The budget would make some major improvements to the funding structure for many veteran programs. “Trump’s budget plan also provides $4.6 billion in new funding 'for VA health care to improve patient access and timeliness of medical care services for over nine million enrolled veterans,' but offered few specifics on what that will entail,” said Military Times.
The Trump budget would eliminate all funding for the National Endowment for the Humanities. The agency's Chairman William D. Adams released the following statement on Thursday afternoon:
“We are greatly saddened to learn of this proposal for elimination, as NEH has made significant contributions to the public good over its 50-year history. But as an agency of the executive branch, we answer to the President and the Office of Management and Budget (OMBTherefore, we must abide by this budget request as this initial stage of the federal budget process gets under way. It will be up to Congress over the next several months to determine funding levels for fiscal year 2018. We will work closely with OMB in the coming months as the budget process continues. The agency is continuing its normal operations at this time."
Between 2008 and 2012, institutions and individuals in Rhode Island received $6.4 million, according to NEH. Programs funded included Brown’s John Carter Library, which was awarded $270,000 to support a fellowship program for NEH designated scholars.
One of the federal agencies hardest hit by Trump's budget is the EPA.
The EPA lab in Narragansett as well as clean-up programs like Superfund will be impacted.
The Washington Post reports, “Trump's budget begins to dismantle the EPA, shrinking its funding by 31 percent and eliminating a fifth of its workforce. More than 50 programs would be eliminated altogether, including Energy Star; grants that help states and cities fight air pollution; an office focused on environmental justice and cleanup efforts in the Chesapeake Bay and Great Lakes; and infrastructure assistance to Alaskan native villages and along the Mexican border. Funding for drinking water infrastructure would remain intact, but the agency's scientific research would suffer massive cuts.”
“Hollowing out the EPA will leave communities at the mercy of big polluters and signal surrender in the fight against catastrophic climate change. How exactly does allowing industrial plants to pollute our air and drinking water put America first? How does hamstringing our diplomatic corps put America first?” said U.S. Senator Sheldon Whitehouse in a statement on Thursday.
Federal agencies will win under the Trump budget, including funding for a beefed up border. Funding will go to “build a border wall, for 500 new Border Patrol agents, and 1,000 new Immigration and Customs Enforcement agents.”
However, certain RI state agencies, local police and emergency agencies will see cuts. According to the Washington Post, the budget "cuts $667 million from grant programs to state and local agencies, including pre-disaster mitigation grants and counterterrorism funding.” Total impacts on Rhode Island are unknown.
If Rhode Island is anything, it may be the "Arts State". And arts are getting slashed under Trump's budget.
National Endowment for the Arts Chairman Jane Chu said, "Today we learned that the President’s FY 2018 budget blueprint proposes the elimination of the National Endowment for the Arts. We are disappointed because we see our funding actively making a difference with individuals of all ages in thousands of communities, large, small, urban and rural, and in every Congressional District in the nation."
For everthing from Trinity Rep to public art projects -- the budget cuts will dramatically change the funding available for arts groups.
The Trump budget would hit some key programs that impact Rhode Island that are funded via the Commerce Department — these include coastal research programs, and efforts like the Rhode Island Sea Grant which is one of 33 programs across the country “working to enhance environmental stewardship and long-term economic development and responsible use of coastal and marine resources.”
Also getting slashed in the proposed budget is the Economic Development Administration, which has been targeted for decades. U.S. Senator John Chafee called for the elimination of the program and called it “pork” back in the 1980s.
Senator Whitehouse criticized the cuts to funding for NOAA, “Slashing the NOAA budget will take away resources from our coastal economy in Rhode Island.”
The Department of Education is slated to be cut by 14 percent under Trump's budget, including a $3.7 billion cut for teacher training, after-school, summer, and low-income aid programs.
However, school choice advocates will see this budget as a win.
"Trump is also pitching a $1.4 billion boost for school choice, which budget documents call a down payment on Trump's campaign promise to pour $20 billion into expanding student options.
The charter school grant program, currently funded at $333 million, would get a sizeable increase of $168 million..Trump is also proposing a new $250 million private school choice initiative that could provide vouchers for use at private schools, including religious schools," writes Edweek.
