The deals Trump must make A con­sen­sus of mod­er­ate-lean­ing con­ser­va­tives and lib­er­als could lead to big wins

The Washington Times Weekly - - Commentary - By Peter Morici

By deal­ing with Democrats to raise the debt ceil­ing and fund the gov­ern­ment through De­cem­ber, Pres­i­dent Trump has opened a win­dow for bar­gains on taxes and in­fra­struc­ture that could be at­trac­tive to both the ad­min­is­tra­tion and mi­nor­ity party in Congress.

Mr. Trump is no con­ser­va­tive or even a real Repub­li­can. He ran in the Repub­li­can pri­maries to se­cure the le­git­i­macy of a ma­jor party nom­i­na­tion, get on the bal­lot in all 50 states and bor­row the Repub­li­can party ma­chin­ery for his gen­eral elec­tion cam­paign.

His sup­port­ers know it — 4 in 10 voted for him to shake up Washington but only 1 in 10 be­lieved he would pur­sue tra­di­tional Repub­li­can poli­cies. Un­able to get much done through the GOP in Congress and fac­ing a re­lent­less crit­i­cism from the left-lean­ing me­dia, he needs new, more po­lit­i­cally cor­rect friends.

En­ter Se­nate Mi­nor­ity Leader Chuck Schumer.

Mr. Schumer is pres­sured by the same me­dia and es­tab­lish­ment left to pre­serve the Obama le­gacy and op­pose ev­ery­thing Trump. He is lim­ited to sup­port­ing projects es­sen­tial to the na­tional in­ter­est and mak­ing or­di­nary folks bet­ter off in ways the left pre­scribes.

Keep­ing the gov­ern­ment from bank­ruptcy and open with­out sub­mit­ting to con­ser­va­tive de­mands to cut en­ti­tle­ments surely qual­i­fies.

On other is­sues, Mr. Trump and Mr. Schumer ap­pear op­posed but per­haps not as much as left-lean­ing ide­olo­gies preach.

On taxes, the Trump ad­min­is­tra­tion wants to ease the bur­den on cor­po­ra­tions, small busi­nesses and the mid­dle class. Mr. Schumer wants the lat­ter but can’t stom­ach any­thing that low­ers taxes for the wealthy — the left de­fines busi­nesses of any kind, save food co-ops and the rich as one and the same.

Since 87 per­cent of in­come taxes is paid by the top 25 per­cent of earn­ers, help­ing many large and most small busi­nesses, which file through the per­sonal in­come tax sys­tem, must en­tail low­er­ing top in­come tax rates. Con­se­quently, Trea­sury Sec­re­tary Steven Mnuchin must come up with an­other source of rev­enue that he can sell to Mr. Schumer as main­tain­ing the bur­den on the wealthy to lower tax rates for ev­ery­one.

Dou­ble­s­peak for sure but this is Washington.

Curb­ing the myr­iad of ex­emp­tions and spe­cial cred­its is hardly enough — the list of good tar­gets, like mort­gage in­ter­est de­duc­tions, con­tains too many sa­cred cows. How­ever, res­ur­rect­ing the House Repub­li­can lead­er­ship’s pro­posal to ap­ply the cor­po­rate tax to im­ports and re­mit it on ex­ports would gen­er­ate $100 bil­lion a year to sup­port broad cor­po­rate and per­sonal in­come tax cuts ac­cept­able to both par­ties.

As those bor­der taxes would be as­sessed di­rectly on busi­ness — not con­sumers in the form of a sales tax — those could be jus­ti­fied as pay­ing for lower cor­po­rate taxes and per­sonal in­come tax rates.

Such a move would out­rage Repub­li­can sup­port­ers like the Koch brothers and re­tail­ers, most no­tably Wal-Mart, but the pro­fes­sional left and unions, whose fa­vor Mr. Schumer must curry, hate those guys.

I see a deal in that. Af­ter all what does Mr. Trump need more in 2020 — the Koch Brothers and Wal-Mart or Mr. Schumer’s em­brace to dele­git­imize the main­stream me­dia’s con­stant claim that his ev­ery breath is the work of Satan.

On in­fra­struc­ture, the Trump ad­min­is­tra­tion has been push­ing the idea of pri­vate-public part­ner­ships to re­build roads, bridges, air­ports and public util­i­ties — en­gag­ing pri­vate com­pa­nies and charg­ing higher user fees was much sup­ported by the Obama ad­min­is­tra­tion.

Sadly, such pri­va­ti­za­tion of water and sewage, toll roads and emer­gency ser­vices of­ten has gone badly — price goug­ing, bank­rupt­cies and death-caus­ing wait times for am­bu­lances.

Mr. Schumer prefers public fund­ing, but that would re­quire a higher gas tax and spe­cial taxes and fees — trim­ming else­where in the fed­eral bud­get, no­tably en­ti­tle­ments, would out­rage his base, and in­creas­ing the deficit to spend ap­pre­cia­bly more would be a non­starter among most Repub­li­cans.

Some things can’t es­cape the ne­ces­sity of pub­licly reg­u­lated util­i­ties or just plain old gov­ern­ment fund­ing, and Mr. Trump’s em­brace of a higher gas tax to pay for roads and bridges and sim­i­lar mea­sures would be tough for even the New York Times to con­demn and an easy deal with Mr. Schumer.

Start­ing with th­ese is­sues, Messrs. Trump with Schumer could forge a con­sen­sus of mod­er­ate-lean­ing lib­eral and con­ser­va­tives in Congress for other is­sues, help the mi­nor­ity leader de­fend 25 Demo­cratic seats up for re­elec­tion in 2018 and es­tab­lish for Mr. Trump a record of ac­com­plish­ment for 2020. Peter Morici is an econ­o­mist and busi­ness pro­fes­sor at the Univer­sity of Mary­land, and a na­tional columnist.

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