Capitol to Capitol | April 24, 2017

Red Alert: First GOP Budget Showdown Hits a Wall

This Saturday, President Donald Trump will conclude his 100th day in office, an unofficial milestone that has become a litmus test of a new president's governing power and effectiveness. But if a new funding measure is not enacted before the end of Friday, the president's 100th day will instead be remembered as the first day of a government shutdown. Given that the president and Republicans in Congress want to avoid a partial government closure, expect this week to be consumed with politics of the budget and battles over funding.

DYK?

The first 100 days of a two-term presidency amount to about 3 percent of an eight-year span, but for decades the opening stretch of an administration has become the barometer of a commander in chief's governing power, or lack thereof.

The measurement began after Franklin Delano Roosevelt entered office amid the tumult of the Great Depression. With banks caving in and jobs vanishing, FDR set to work passing laws and establishing new government bureaus to curb the economic suffering. He swore in his entire Cabinet at once, signed 76 bills into law, and began rolling out the New Deal in his first 100 days in office -- a frenzy of activity that, ever since, all presidents have been matched against. 

The biggest sticking point for a funding deal is Trump's request for $1.4 billion in federal funds for a wall on the U.S.-Mexico border. Democrats have signaled that they will not vote for any funding legislation that includes funds for construction of the wall, while the president and his administration have hinted that the White House may not sign any bill that does not include the funding. On "Meet the Press" yesterday, the House Democratic leader, Nancy Pelosi, said that it is the responsibility of Republicans to garner enough votes to keep the government open, which will be very difficult without support from Democrats. This is especially true in the Senate where at least eight Democrats will be needed to join all 52 Republicans to advance a funding bill. However, on "Fox News Sunday," White House budget director Mick Mulvaney answered "We don't know yet" when host Chris Wallace asked him if the president will "sign a government funding bill that does not include funding for the border wall?"

Other budget sticking points:

  • The possible inclusion of language that would block federal grants for any city that doesn't enforce federal immigration law.
  • Whether or not there is enough support for the $30 billion in extra defense spending proposed by the president.
  • Demand from Democrats that any spending bill provide money for an Obamacare subsidy program after Trump threatened to defund the cost-sharing subsidies.
  • Whether the budget will include a long-term solution for coal workers' health care as well as a separate pension fund.
  • Whether or not the House Freedom Caucus will support a funding measure that does not significantly cut government spending.

If a funding agreement cannot be reached later this week, White House officials and House Republicans have suggested that Congress may send the president a short-term funding measure, known as a stopgap, that could fund the government for 5-10 days to allow for more time for budget negotiations. 

NCSL Contacts: Max Behlke, Jake Lestock

Trump Expected to Release Tax Reform Plan on Wednesday

"We'll be having a big announcement on Wednesday having to do with tax reform. The process has begun long ago, but it really formally begins on Wednesday."

—President Donald Trump, April 21.

As Congress returns this week prepared for a budget debate and the reemergence of the health care debate, it appeared that tax reform was once again being relegated to the back seat on Capitol Hill. But last week's announcement from the administration that it plans to release a broad tax reform plan, albeit without legislative text, this week signals the importance of a tax rewrite to the administration. And as tax writers anxiously await the opportunity to drive the policy agenda, you can be sure that Washington is keenly aware of their behind-the-scenes work to rewrite the tax code.

DYK?

George Washington is the only U.S. president to win 100 percent of the Electoral College vote. This is mainly because organized parties weren't yet formed, and he ran unopposed. However, as the 12th Amendment to the Constitution, which required separate Electoral College votes for president and vice president, was not ratified until 1804, even though Washington won his election unanimously, he still had a runner-up, John Adams, who served as vice president during both of Washington's terms.

Before the ratification of the 12th Amendment, electors, in what is now called the Electoral College, named two choices for president. They each cast two ballots without noting a distinction between their choice for president and vice president. Washington was chosen by all the electors and therefore is considered to have been unanimously elected. Of those also named on the electors' ballots, Adams had the most votes and became vice president.

The president and Treasury Secretary Steven Mnuchin remain confident that tax reform will happen this year. Mnuchin said the Treasury was working on tax reform options "day and night" and "whether health care gets done or health care doesn't get done, we're going to get tax reform done." House Speaker Paul Ryan was also optimistic last week that something could be completed soon, but acknowledged that it will be a long battle throughout most of 2017, clarifying that "as soon as possible for us is by the end of summer, but we're going to take our time to get it right. We can clearly get this done by the end of summer but if it needs to go a little longer, we'll do that."

For many Republicans, the main priority of tax reform is reducing the statutory 35 percent income tax rate for corporations, something many Democrats also think is a good idea. But politically, it will be much harder to sell corporate tax reform to the general public if the tax package does not include tax reform for individuals. Another obstacle is cost as cutting the corporate rate adds up quickly – just a 1 percentage point cut in the corporate rate costs about $100 billion over 10 years. While Mnuchin stated that reducing business and individual tax rates will unleash so much economic growth that the lost revenue will almost completely pay for itself with growth, budget hawks and deficit skeptics have raised concerns.

Alan Cole, an economist for the Tax Foundation, told CBS News on Friday that "If it's just pure tax cuts and no revenue-raising provisions, we don't predict that any tax cut will pay for itself. There's just no federal tax that's bad enough to raise sufficient revenue by eliminating it. It means you're punting on the question of how the revenue will eventually be raised to pay for this." At an event in D.C. last week, Douglas Holtz-Eakin, a conservative economist and former director of the Congressional Budget Office, warned against assuming that tax cuts would pay for themselves. When asked if the administration proposed a plan that would increase federal borrowing and relied on optimistic assumptions about increased economic growth, Holtz-Eakin said, "I would start drinking earlier every day, yes, absolutely." That type of plan might not win support among Republican lawmakers, either, Holtz-Eakin said.

Other roadblocks include the 13 factions that currently have a lot of skin in the fight over tax reform and could cause serious problems for any potential plans. With these problems continuing to pile up, many have hypothesized Congress could settle for simply cutting taxes if they fall short on a tax overhaul.

NCSL Contacts: Max Behlke, Jake Lestock

New Executive Orders Expected This Week 

This week, Trump is expected to sign a series of executive orders. If the orders are indeed signed by Friday, the president will have signed the most executive orders (at least 32) of any president in their first 100 days since World War II.

DYK?

President Lincoln is enshrined in the Wrestling Hall of Fame. The Great Emancipator wasn't quite WWE material, but thanks to his long limbs he was an accomplished wrestler as a young man. Defeated only once in approximately 300 matches, Lincoln reportedly talked a little smack in the ring. According to Carl Sandburg's biography of Lincoln, Honest Abe once challenged an entire crowd of onlookers after dispatching an opponent: "I'm the big buck of this lick. If any of you want to try it, come on and whet your horns." There were no takers. Lincoln's grappling exploits earned him an "Outstanding American" honor in the National Wrestling Hall of Fame.

Overview of expected executive orders:

  • Executive Order Implementing an America-First Offshore Energy Strategy: Orders a review of the locations available for offshore oil and gas exploration and of certain regulations governing offshore oil and gas exploration.
  • Executive Order Improving Accountability and Whistleblower Protections at the Department of Veterans Affairs: Establishes an office of accountability and whistleblower protection at the Department of Veterans Affairs.
  • Executive Order Promoting Agriculture and Rural Prosperity in America: Establishes a task force and orders it to examine the concerns of rural America and suggest legislative and regulatory changes to address them.
  • Executive Order for a Review of Designations under the Antiquities Act: Directs the Interior Department to review prior monument designations under a more than 100-year-old law that authorizes the president to establish federal lands as national monument.

NCSL Contact: Max Behlke

Agriculture Secretary Expected to be Confirmed Tonight

Former Georgia governor Sonny Perdue is set to finally start work at the Department of Agriculture, as the Senate is expected to confirm the president's pick to lead USDA when it votes at 5:30 p.m.

NCSL Contacts: Ben Husch, Kristen Hildreth

The April 10, 2017, Capitol-to-Capitol can be found here

If you have comments or suggestions regarding Capitol-to-Capitol, please contact Max Behlke.

NCSL's Advocacy in Washington

NCSL's Washington staff advocate Congress, the White House, and federal agencies on behalf of state legislatures in accord with the policy directives and resolutions that are recommended by the NCSL Standing Committees and adopted by the full conference at the annual NCSL Legislative Summit Business Meeting. As a result of the advocacy that is guided by these policies positions, NCSL is recognized as a formidable lobbying force in state-federal relations.

NCSL Staff in Washington, D.C.

  • Neal Osten | 202-624-8660 | Molly Ramsdell | 202-624-3584 | Directors
  • Max Behlke | 202-624-3586 | Budgets and Revenue
  • Danielle Jarchow |202-624-8686 | Communications, Financial Services and Interstate Commerce
  • Rachel Morgan | 202-624-3569 | Health and Human Services
  • Jon Jukuri  | 202-624-8663 | Labor, Economic Development and International Trade
  • Susan Frederick | 202-624-3566 | Law, Criminal Justice, and Public Safety
  • Ben Husch | 202-624-7779 | Natural Resources and Infrastructure