GOP is far from goals as re­cess ap­proaches

Law­mak­ers re­port lit­tle progress on health care, bud­get, tax re­form

The Washington Post Sunday - - FRONT PAGE - BY MIKE DEBO­NIS AND ED O’KEEFE

The Repub­li­can Congress re­turns to Capi­tol Hill this week in­creas­ingly un­cer­tain that a ma­jor leg­isla­tive vic­tory is achiev­able in the three weeks be­fore law­mak­ers leave town for their month-long sum­mer re­cess.

Most im­me­di­ately, GOP lead­ers and Pres­i­dent Trump are un­der enor­mous pres­sure to ap­prove health-care leg­is­la­tion — but that is only the be­gin­ning. Vir­tu­ally ev­ery piece of their am­bi­tious leg­isla­tive agenda is stalled, ac­cord­ing to mul­ti­ple Repub­li­cans in­side and out­side of Congress.

They have made no se­ri­ous progress on a bud­get de­spite fall dead­lines to ex­tend spend­ing au­tho­riza­tion and raise the debt ceil­ing. Vows to launch an am­bi­tious in­fra­struc­ture-build­ing pro­gram have faded. And the sin­gle is­sue with the most po­ten­tial to unite Repub­li­cans — tax re­form

— has yet to progress be­yond speeches and out­lines.

The fall­out, ac­cord­ing to th­ese Repub­li­cans, could be dev­as­tat­ing in next year’s midterm elec­tions. A de­mor­al­ized GOP elec­torate could fail to turn out in sup­port of law­mak­ers they per­ceive as hav­ing failed to ful­fill their prom­ises, al­low­ing Democrats to sweep back into the House ma­jor­ity pro­pelled by an en­er­gized base.

Rep. Mark Mead­ows (R-N.C.), chair­man of the con­ser­va­tive House Free­dom Cau­cus, said that if Repub­li­cans can­not de­liver on their prom­ises in the com­ing weeks, vot­ers “are go­ing to start say­ing, ‘What dif­fer­ence does it make who’s in power?’ ”

“There is a real anx­i­ety among the peo­ple that I serve on why we’re not putting more things on the pres­i­dent’s desk,” Mead­ows said. “They’re tired of ex­cuses.”

All told, Repub­li­cans are in dan­ger of squan­der­ing their grasp on the White House, the Se­nate and the House af­ter a decade of di­vided gov­ern­ment and years of stok­ing a con­ser­va­tive base to ex­pect ma­jor pol­icy wins. Un­able so far to se­cure progress on his top pri­or­i­ties, Trump is also bump­ing up against his­tory: Ev­ery pres­i­dent of the modern era has been able to claim at least one sig­na­ture leg­isla­tive achieve­ment be­fore the first Au­gust re­cess.

Sen. Roy Blunt (R-Mo.), a mem­ber of the Se­nate GOP lead­er­ship, said he wor­ried that his party is not seiz­ing the early months when a new pres­i­dent is his­tor­i­cally best po­si­tioned to en­act the bold­est parts of his agenda.

“I think there’d be no rea­son for vot­ers to look at this yet and think, ‘Oh, my gosh, a lot of the most valu­able time of an ad­min­is­tra­tion is al­ready gone.’ But if you’ve watched this for years, when an ad­min­is­tra­tion re­ally makes great suc­cesses, it’s usu­ally in that first year — and, more im­por­tantly, in that first seven months of that first year,” he said.

The im­me­di­ate ob­sta­cle has been the health-care leg­is­la­tion, which Repub­li­cans have cam- paigned on since the Af­ford­able Care Act passed in 2010 but is now mired in wide­spread un­pop­u­lar­ity and GOP in­fight­ing.

Blunt said that af­ter weeks of stalled progress, Repub­li­cans soon must de­cide whether the bill is vi­able: “This does not get bet­ter over time, and we’re los­ing valu­able time to get other things that we need to do, as well.”

A grow­ing num­ber of GOP lead­ers and K Street ad­vo­cates think the party must move quickly be­yond health care, win or lose, and pro­ceed with a less in­ter­nally di­vi­sive tax bill. Lead­ers had al­ready aban­doned, in the spring, their goal of pass­ing tax re­form over the sum­mer. But with health care con­sum­ing the Se­nate, they have shown few signs of progress.

“Repub­li­cans rec­og­nize they’re not out of the woods,” said Thomas M. Davis, a for­mer Vir­ginia con­gress­man who di­rects Deloitte’s fed­eral lob­by­ing prac­tice. Davis said he thinks the Repub­li­can vic­tory in a spe­cial con­gres­sional election in Ge­or­gia last month granted the party a re­prieve — but it won’t last long with­out a leg­isla­tive achieve­ment.

“They’ve got a high wave com­ing at them in the midterms,” he said. “I think they re­al­ize they’ve got to buckle down and do things. They’ve got to pro­duce, and tax re­form would be the num­ber one thing.”

Key Repub­li­can lead­ers have started look­ing be­yond health care. Se­nate Ma­jor­ity Leader Mitch McCon­nell (R-Ky.) has ac­knowl­edged the pos­si­bil­ity of a bi­par­ti­san re­pair to ail­ing health in­surance mar­kets should GOP se­na­tors fail to come to terms on a more am­bi­tious ACA re­place­ment. And House Speaker Paul D. Ryan (R-Wis.) has turned his at­ten­tion squarely to a tax over­haul as the health-care leg­is­la­tion that barely passed his own cham­ber sits in the Se­nate.

“Our job and our goal is to get tax re­form done in 2017, so that when we roll into the new year in 2018, we roll into hav­ing a new tax code,” Ryan said at a Thurs­day event in his home district, ac­cord­ing to re­marks re­leased by his of­fice.

Even staunch con­ser­va­tive ad­vo­cates of re­peal­ing the health­care law are pre­par­ing for a quick pivot to tax leg­is­la­tion.

Tim Phillips, pres­i­dent of the con­ser­va­tive Koch broth­ers’ net­work group Amer­i­cans for Pros­per­ity, said Fri­day that his group has been “dis­ap­pointed” by Congress’s fail­ure to act quickly to dis­man­tle the ACA and now con­sid­ers its re­peal “a long-term ef­fort.”

“The pri­or­ity is def­i­nitely tax re­form,” Phillips said. “If you think about the long-term di­rec­tion of the na­tion, gen­uinely dra­matic tax re­form would do the most good for the largest num­ber of Amer­i­cans.”

Watch­ing on the side­lines are Democrats, em­bold­ened af­ter spend­ing weeks gen­er­at­ing pub­lic op­po­si­tion to the GOP health­care plan and whose co­op­er­a­tion will be needed to pass a se­ries of com­plex items in the com­ing months.

Sen. El­iz­a­beth War­ren (DMass.) said she’s amazed that Repub­li­cans “are will­ing to burn time off the con­gres­sional cal­en­dar pur­su­ing this ter­ri­ble plan when dead­lines are bear­ing down on us, like rais­ing the debt ceil­ing.”

“They’re in the ma­jor­ity in the House and the Se­nate, they own the White House, and that’s the di­rec­tion they want to drive the coun­try? A place where most of Amer­ica doesn’t want to go? I don’t get it,” she added.

Mark Zandi, the chief econ­o­mist at Moody’s An­a­lyt­ics, said the dys­func­tion in Congress stands to roil con­fi­dence in the U.S. economy, par­tic­u­larly if law­mak­ers flirt with de­fault­ing on the debt limit.

Com­pa­nies are al­ready grow­ing pes­simistic about prospects for ag­gres­sive tax cuts, Zandi said, and even the sug­ges­tion that Congress might fail to in­crease the debt limit could have se­ri­ous mar­ket con­se­quences. The over­all pic­ture is also caus­ing ma­jor un­cer­tainty for busi­nesses that are try­ing to plan for the months and years ahead.

“Busi­nesses are de­lay­ing in­vest­ment de­ci­sions, be­cause they don’t know what tax rate they’re go­ing to have in the fu­ture,” Zandi said.

Ryan has called for an am­bi­tious restruc­tur­ing of cor­po­rate tax­a­tion, elim­i­nat­ing loop­holes and tax­ing im­ports to bring rates down from the cur­rent 35 per­cent rate to as low as 15 per­cent. But the plan to tax cor­po­rate im­ports, known as bor­der ad­just­ment, has en­coun­tered fierce re­sis­tance, even among some Repub­li­cans.

The Trump ad­min­is­tra­tion has yet to reach con­sen­sus with House and Se­nate Repub­li­cans on the pa­ram­e­ters of a tax bill, though aides say talks are pro­gress­ing.

No mat­ter what hap­pens on health care and a tax over­haul, Repub­li­cans and Democrats also must agree on spend­ing by the time the new fis­cal year be­gins Oct. 1 — but no se­ri­ous dis­cus­sions about a plan have be­gun, mul­ti­ple con­gres­sional aides said.

Equally con­cern­ing for GOP law­mak­ers is that they must pass a bud­get ahead of a tax over­haul to en­act the spe­cial in­struc­tions that would al­low them to ap­prove a tax bill on a sim­ple ma­jor­ity vote rather than the 60-vote su­per­ma­jor­ity re­quired of most leg­is­la­tion in the Se­nate.

Also in the fall, Trea­sury De­part­ment of­fi­cials ex­pect to hit the na­tion’s bor­row­ing limit. Trea­sury Sec­re­tary Steven Mnuchin has called for Congress to in­crease the debt limit by the end of July with­out at­tach­ing ad­di­tional pol­icy mea­sures. But con­ser­va­tives are push­ing to in­clude spend­ing cuts, and GOP lead­ers have not yet taken con­crete steps on the is­sue.

The key dis­putes of the mo­ment are not be­tween Repub­li­cans and Democrats but within the GOP. But on fis­cal mat­ters, both par­ties see bi­par­ti­san ne­go­ti­a­tions as in­evitable.

House Repub­li­cans have floated a 2018 bud­get that boosts de­fense spend­ing be­yond the caps set in a 2011 bi­par­ti­san ac­cord, and break­ing them will re­quire ne­go­ti­a­tions with Democrats who have long in­sisted on a cor­re­spond­ing rise in non­de­fense spend­ing.

Other leg­isla­tive dead­lines also loom: The Fed­eral Avi­a­tion Ad­min­is­tra­tion, the Na­tional Flood In­surance Pro­gram and the Chil­dren’s Health In­surance Pro­gram are set to ex­pire in Oc­to­ber, and a De­part­ment of Vet­er­ans Af­fairs pro­gram that gives vet­er­ans more flex­i­bil­ity in where they seek health care — a pro­gram launched in re­sponse to years of scan­dal at the de­part­ment — is set to run out of fund­ing next month.

This week, McCon­nell is de­vot­ing most of the Se­nate floor time to con­firm­ing Trump nom­i­nees to mid-level Cabi­net po­si­tions and the fed­eral courts. Christo­pher A. Wray, Trump’s choice to be the new FBI di­rec­tor, is set to ap­pear be­fore the Se­nate Ju­di­ciary Com­mit­tee for his con­fir­ma­tion hear­ing on Wed­nes­day.

Be­hind closed doors, McCon­nell will re­main fo­cused on his at­tempt to per­suade 50 of the 52 GOP se­na­tors to back a sin­gle health-care bill.

MELINA MARA/THE WASH­ING­TON POST

House Speaker Paul D. Ryan (R-Wis.), left, has said he wants law­mak­ers to ham­mer out a restruc­tur­ing of the tax code this year.

BILL O’LEARY/THE WASH­ING­TON POST

Sen. Roy Blunt (R-Mo.) has ex­pressed con­cern, not­ing that past ad­min­is­tra­tions have scored key pol­icy goals dur­ing the first year.

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