Trump adviser: Bill must have money for wall
Border plan a sticking point in negotiations on spending
WASHINGTON — Money for the wall President Donald Trump wants to build along the U.S. border with Mexico must be part of the government spending bill Congress is preparing, the White House budget director said.
Additional funding also must be included to hire more immigration agents, Mick Mulvaney told The Associated Press in an interview in which he laid out the top priorities of the president.
In a separate interview, Trump said Friday that he would unveil a tax-overhaul package next week — “Wednesday or shortly thereafter” — that would include a “massive” tax cut for both individuals and corporations.
Talks on the $1 trillion-plus spending measure, which lawmakers hope to unveil next week, have hit a rough patch as a Friday deadline to avert a government shutdown looms. Trump’s presidency is approaching the 100-day mark, but his GOP allies in Congress have been tempering expectations that the president would emerge as a big winner.
Democratic negotiators are likely to resist providing the down payment that Mulvaney said Trump wants for
construction of the wall. But Mulvaney, a former GOP congressman from South Carolina, said that “elections have consequences.”
Mulvaney did, however, say the administration is open to discussion about a key Democratic demand that the spending measure pay for cost-sharing payments to insurance companies that help low-income people afford health policies under the Patient Protection and Affordable Care Act.
Democratic votes are likely to be needed to pass whatever spending bill emerges from the talks, and Senate Democrats could bottle it up entirely if they object to provisions that they deem to be “poison pills” — such as the money for the wall. Trump campaigned for president on the promise of building the wall and sticking Mexico with the tab.
Mulvaney said the White House delivered an offer to negotiators Wednesday night, with funding for the border wall a top demand. Other items on the White House priority list, Mulvaney said, are a $30 billion request for a cash infusion for the military and a provision to give the administration greater latitude to deny certain federal grants to “sanctuary cities” that refuse to cooperate with immigration enforcement by federal authorities.
“We want wall funding. We want [immigration] agents. Those are our priorities,” Mulvaney said. “We know there are a lot of people on the Hill, especially in the Democratic Party, who don’t like the wall, but they lost the election. And the president should, I think, at least have the opportunity to fund one of his highest priorities in the first funding bill under his administration.”
He said the wall is “something that’s a tremendous priority for us and that clearly was a seminal issue in the 2016 presidential race.” In spite of Trump’s promise, the cost of a border wall, expected to exceed $20 billion, would likely be borne by taxpayers. And some Republicans are opposed to the wall as well, instead preferring to spend more on technologies such as sensors
and drone aircraft to beef up border security.
Democrats have taken a hard line against any money for the border wall and insist that the measure include the Affordable Care Act payments to insurance companies.
At issue are cost-sharing payments that are a key subsidy under the health care law to help low-income people enrolled through the law’s insurance marketplaces with their out-of-pocket expenses. Trump has threatened to withhold the payments as a means to force Democrats to negotiate on health care legislation.
The cost-sharing payments are the subject of a lawsuit by House Republicans, and Trump threatened in an interview with The Wall Street Journal last week to drop the payments, which experts warn would severely disrupt the health law’s marketplaces.
Mulvaney said the White House isn’t enthusiastic about Democratic demands on the Affordable Care Act payments but is open to them as part of a broader agreement.
“The president has been quoted several times and said he’s inclined not to make them, and I can’t tell you that I’m interested in dissuading him from that position,” Mulvaney said. “That being said, if it’s important enough to the Democrats, we’d be happy to talk to them about including that in sort of some type of compromise.”
Mulvaney added, “If Democrats are interested and serious about compromise and negotiation, the ball is in their court.”
After signaling that Trump would demand money for key priorities in the budget measure, the White House on Friday ordered federal agencies to begin preparations for a potential partial government shutdown.
But the president and his aides expressed confidence that Congress would work out a spending agreement and that there won’t be any halt in government operations. Administration officials portrayed the preparations as normal contingency planning, saying the previous administration had followed the same practice as funding deadlines approached.
“I think we’re in good shape” on avoiding a deadlock on maintaining funding, Trump told reporters Friday in the Oval Office.
White House spokesman Sean Spicer said the administration is “confident” because negotiations are ongoing and because “no one wants a shutdown.”
Democrats have said they are confident that Republicans, who control both the House and Senate, would bear the blame for any shutdown, even as Democrats wield power in the talks.
“We have the leverage, and they have the exposure,” House Minority Leader Nancy Pelosi, D-Calif., told fellow Democrats on a Thursday conference call, according to a senior Democratic aide.
Democrats responded harshly to Mulvaney’s remarks Thursday.
“Everything had been moving smoothly until the administration moved in with a heavy hand,” said Matt House, a spokesman for Senate Minority Leader Charles Schumer, D-N.Y. “Not only are Democrats opposed to the wall, there is significant Republican opposition as well.”
In the House, a group of conservatives, led by the Freedom Caucus, are expected to oppose the spending bill.
Trump, in the Friday interview, would not provide details of rate proposals or how he planned to pay for his tax-overhaul package, but he asserted that the cuts for Americans will be “bigger, I believe, than any tax cut ever.”
The plan likely won’t include a border-adjusted tax that House Speaker Paul Ryan has proposed, according to a senior administration official. The White House is still debating the idea, the official said.
Another senior White House official cautioned that the tax plan may not include every component that will go into final legislation. The officials asked not to be identified because discussions of the plan are private.
Ryan, a Wisconsin Republican, has proposed replacing the 35 percent corporate income tax with the 20 percent border-adjusted tax on U.S. companies’ domestic sales and imports. Exports would be exempt under the plan, which is opposed by retailers, carmakers and oil refiners that rely on imported goods.
Mulvaney, in an interview with Bloomberg Television, also provided few details of the tax plan, but he did say it’s aimed at providing 3 percent annual economic growth.
“We’re trying to backfill from there,” he said — by incorporating tax policy that would provide for the growth target. A Bloomberg survey of 73 economists this month showed that the median forecast for U.S. economic growth in 2017 is 2.2 percent.
Mulvaney also raised the possibility that the plan might not be revenue-neutral — meaning that it might provide for only temporary tax cuts that would have to expire after 10 years.
He said administration officials were grappling with how well the border-adjusted tax would contribute to economic growth. The border-tax concept is estimated to raise more than $1 trillion in revenue over 10 years; without that, it may be difficult for any plan to achieve revenue neutrality.
Revenue neutrality is important, because the GOP controls just 52 of the Senate’s 100 seats, and normal Senate rules impose a 60-vote threshold for legislation to escape potential filibusters from opponents. Senate Republicans could use a process known as budget reconciliation, which would allow for passing a tax bill with a simple majority. But under that process, any legislation that added to the deficit would have to be set to expire after 10 years.
Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center and a former legislation counsel at Congress’ Joint Committee on Taxation, said Trump’s announcement “almost certainly” signaled that he was abandoning permanent tax overhauls in favor of temporary tax cuts that would expire in 10 years.
“We will end up with ‘tax cuts for everyone,”’ Rosenthal said. “You just use fantasy scoring. It’s much easier than tax reform and revenue neutrality.”
Congressional Republicans seemed caught off guard by Trump’s announcement and did not appear to have been briefed on the details of the White House’s forthcoming plan.