Blog No. 146. Trump and the Potemkin Agenda

Donald Trump’s affinity for things Russian is well known and, it now appears, extends well beyond his admiration for Vladimir Putin and his cronies. Indeed, Trump has taken his current political approach from a Russian strategy employed in 18^th century. During the reign of Catherine II, legend has it, the Governor of Crimea, Grigory Potemkin set up fake villages on the banks of the Dnieper River visible from a barge carrying the Empress and foreign ambassadors. Potemkin’s men, dressed as peasants, would populate the village, and once the barge left, they disassemble the village and overnight rebuild it downstream. In Trump’s case, the “village,” is his Potemkin Agenda, consisting of various legislative proposals that sound impressive but have little connection with reality. In a televised video of Trump meeting with his cabinet, he described the Agenda  in glowing and typically self-congratulatory terms, and then members of the Cabinet  added fawning tributes, playing their their roles as dutifully as the peasants in Potemkin’s villages. It was a scene that many saw as one of remarkable self-parody. But anonymous sources in the Intelligence Community disclosed  that Kim Jong Un has adopted it as a training film for his own Cabinet. (No, Mr. President, not FAKE NEWS, just a little joke.)

The Potemkin quality of Trump’s achievements was illustrated in his boast to the Cabinet of the record number of bills that he had signed. Politifact confirmed the number of bills but pointed to their lack of substance:

However, none of the bills Trump had signed at that point qualified as major pieces of legislation. None of the ones since are, either. They include, among others, two federal spending bills of the sort required periodically of every president and Congress to keep the government running; a bill overhauling government-employee travel policy; a bill about the United States competing for an international expo; a measure addressing Department of Homeland Security vehicle fleets; and the official naming of a federal courthouse in Tennessee.

The most significant elements in Trump’s Potemkin Agenda are far removed from becoming bills ready for signature.

Healthcare reform.  When Trump spoke to the Cabinet, he said that Health and Human Services Secretary Tom Price and Majority Leader Mitch McConnell were “working very hard” on the bill in the Senate and criticized Democrats for failing to “get in and do something.” In fact, the hallmark of of attempts to formulate a bill  in the Senate is the extraordinary secrecy with which they are being carried out–excluding not only Democrats but many Republican Senators. Neither hearings nor open drafting sessions have been held or are planned.

The starting point for the Senate was the dreadful AHCA bill that, with lobbying from Trump, was narrowly passed by the House. According to the Congressional Budget Office, that bill would have resulted in a loss of insurance coverage for 23 million people and polls show that it is disfavored by a large majority of the public. Indeed, it is a bill that even Trump now has called “mean,” while suggesting that the Senate “add more money.” A bewildered Republican House member exploded that Trump’s reversal on a bill he helped sell was shocking, saying, “for him to turn around and do this, it’s stunning. I can’t believe it.”

Despite the secrecy of the process in the Senate, the bill-in-process has managed to spark intense debate among Republicans on some issues. As reported in Friday’s Washington Post:

The Medicaid fight has flared frequently in recent weeks as two Rust Belt senators with starkly different views of the program have become leaders of competing factions in the closed-door meetings: Rob Portman (R-Ohio) and Patrick J. Toomey (R-Pa.). Portman and others from states that expanded Medicaid under the ACA want more time to unwind the program, while Toomey and his conservative allies want to slow the growth of the program’s cost.

The two have clashed several times in closed-door gatherings, according to several Republican senators and aides familiar with the meetings. Portman is fighting a proposal from Toomey and conservative Sen. Mike Lee (R-Utah) to cut Medicaid spending by capping federal payments at a rate slower than Medicaid costs are expected to rise. Toomey and his supporters say their plan would help curb the long-term costs of Medicaid.

Portman and several other moderate senators say the proposed cuts would give states no choice but to cut services, benefits or provider payments and could leave people with insufficient care.

Whether the Senate can somehow cobble together a bill that will not only slip through that chamber but gain approval in the House is, at best, a long shot.

Tax reform.  On April 26, the administration issued a one-page outline of a bare bones tax plan, more of a wish list than a concrete proposal.  Even in its rudimentary form, however, it met with immediate criticism by calling for major tax cuts that would primarily benefit the wealthy and greatly inflate the federal debt. As summarized by the bipartisan Committee for a Responsible Federal Budget in a widely cited report, “Based on what we know so far, the plan could cost $3 to $7 trillion over a decade– our base-case estimate is $5.5 trillion in revenue loss over a decade. Without adequate offsets, tax reform could drive up the federal debt, harming economic growth instead of boosting it.”

In an interview with the Economist published May 11, Trump breezily asserted that his unpaid-for tax cuts, mostly for the wealthy and corporations, would “prime the pump” for greater economic growth. Trump was echoing his Treasury Secretary Steven Mnuchin who had made a similar assertion on April 20. But as Douglas Holtz-Eakin, a conservative, a Republican and a former director of the Congressional Budget Office had pointed out in a Washington Post op-ed, the Trump tax plan was little more than a “fairy tale:”

Proposing trillions of dollars in tax cuts and then casually asserting that such a plan would “pay for itself with growth,” as Treasury Secretary Steven Mnuchin said, is detached from empirical reality. A real tax-reform plan would include specifics on how to broaden the tax base — not leave that hard work to Congress. A responsible tax plan would not ignore the threat of increasing a national debt that is already on an unsustainable course.

Accelerating the pace at which the federal budget bleeds red ink must be avoided, and building a tax plan based solely on the premise of future economic growth is dangerous. Sailing straight into a sovereign debt crisis is not a pro-growth strategy. What firm would want to headquarter in a country that is toying with financial meltdown accompanied by emergency austerity and tax hikes?

Little has been heard from the Trump administration in recent weeks concerning its tax reform plan. In his statement to the Cabinet, Trump said that Mnuchin was “working on a tax cut” but made no mention of tax reform, and what the current strategy may be, or whether there is a strategy at all, is unclear. In any case, there will be strong political headwinds from Democrats passionately opposing any plan with tax cuts primarily for the benefit of the wealthy and from fiscal conservatives objecting to a plan that balloons the federal debt.

An analysis in the New York Times outlined the complexities and the competing interests at play in solving the “Rubik’s Cube” of tax reform and observed:

Add in a more polarized political environment, an administration that has been light on policy expertise and a Republican congressional contingent that hasn’t shown much ability to pass complex legislation in more than a decade, and the puzzle looks all the more complicated.

Infrastructure. On June 8, Trump announced with much fanfare his approach to investment in infrastructure. Like his message on tax reform, however, what he delivered was not a specific proposal but, as one report put it, the “contours of a plan.” Rather than the trillion-dollar expenditure Trump had promised in his campaign, his budget proposes only $200 billion of federal spending over the next 10 years. For the rest, Trump would rely on a hoped-for combination of private industry, state and city tax money, and borrowed cash. Moreover, the Trump budget actually cuts more from existing infrastructure programs than it proposes in new spending: slashing $96 billion from the Highway Trust Fund, scrapping rural water programs and eliminating the popular and highly competitive “Tiger program,” which has provided billions in grants to transportation projects in all 50 states.

The only concrete element of the proposed infrastructure program is the privatization of the air control system. Trump claimed that privatization would improve airlines’ on-time performance, but critics quickly pointed out that most delays today are the result of weather and airline errors, not the air traffic control system. Critics also asserted the proposal “could in fact hurt consumers and businesses: To pay for the system, airlines could jack up airfares, cut service to smaller airports and infringe upon civil aviation, all without any public transparency or accountability. As a result, the proposal was received with skepticism on both sides of the aisle in Congress, particularly from legislators representing smaller-market airports.

In sum, the prospects of passing an infrastructure bill are, like those of the elusive healthcare reform and tax reform proposals, highly dubious at best. As Politico put it:

Capitol Hill aides say a broad infrastructure bill isn’t going anywhere any time soon either and the proposed air-safety overhaul failed to even make it to the House floor when GOP lawmakers proposed it a year ago. Continuing to toss  ambitious proposals into an already stuffed legislative calendar poses a danger for Trump: If he and Congress can’t regroup, to focus on one priority at a time, they could end up seeing the president’s three biggest policy objectives—tax reform, health care and infrastructure—stuck in the Capitol.

To achieve passage of any, let alone all three, major initiatives would require a sense of strategy and a level of legislative skill that have been conspicuously absent. Until such time as they might magically appear, Trump’s vague proposals will remain inert monuments in the garden of his Potemkin Agenda.