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