At the invitation of House Speaker Paul Ryan, President Donald Trump will address a joint session of Congress on February 28th. In the first year of previous presidencies, similar invitations provided the occasion for the new president to deliver a major, agenda-setting speech—presidents begin delivering state of the union addresses after serving for a year. These speeches, and the release of the documents that provided the substantive underpinning for them, have proven to be highly consequential moments:
- On February 17, 1993, President Bill Clinton addressed a joint session of Congress and presented a 149-page document, called “A Vision for Change for America.” The plan he presented to the country that evening led directly to passage of the Omnibus Budget Reconciliation Act of 1993 that summer, which became the foundation for the economic and budgetary policies he championed throughout his two terms in office.
- On February 27, 2001, President George W. Bush addressed a joint session of Congress and presented “A Blueprint for New Beginnings,” a 207-page document describing his tax and budgetary priorities. By June, the tax plan outlined in the document—the so-called “Bush tax cuts”—were enacted into law. Most of the Bush tax cuts were made permanent in an agreement between President Obama and Republican leaders in Congress in early 2013.
- On February 24, 2009, President Barack Obama addressed a joint session of Congress and presented “A New Era of Responsibility: Renewing America’s Promise,” a 146-page document calling on Congress to pass a health care plan along with other major changes in tax and spending policy. By March 2010, the Affordable Care Act was enacted into law.
Is President Trump preparing to deliver a speech of similar policy consequence? More importantly, is his administration preparing a substantive document that begins to lay out in concrete ways what the president has in mind in terms of his tax, spending, and economic policies?
If Trump were to deliver a substantive address, and provide a supporting document outlining his agenda, it would mark a very dramatic turning point in his public posture. He prospered in the campaign by avoiding getting pinned down on anything specific. Instead, he promised big results—job and economic growth; better roads, bridges, and airports; lower taxes; better and less expensive health care; and smaller budget deficits—with no actual plans to back up his claims. When pressed, Trump implied that his business expertise and willingness to break old rules would allow him to find solutions and opportunities that others could never see (“I alone can fix it.”). After promising a dramatic improvement of some kind, Trump has often punctuated the point by saying, “Believe me!” Apparently a sizeable slice of the electorate did.
But now comes the hard part. Governing is choosing, and choosing creates support as well as opposition. It is not possible to be all things to all people. And so there is political risk in choosing sides on the scores of divides that characterize complex policy questions.
Trump has no choice at this point but to begin showing some cards if he wants to get anything done. The drift and paralysis that is now settling in over Washington is palpable, and it is due entirely to the lack of a clear plan. On complex issues, leadership from the executive branch has been critical in recent decades, and that is unlikely to change even with a very different kind of chief executive.
It is clear at this point that the Trump administration would like to move forward quickly on repeal and replacement of the Affordable Care Act, major tax reform with lower marginal rates on individuals and corporations, new investments in infrastructure spending, and increased defense spending. For this kind of agenda to have any chance of enactment, Trump is going to need to lay out an agenda that begins to answer some basic questions, such as:
- Will Trump’s plan increase the federal budget deficit and, if so, by how much? Looming over everything is the lack of a coherent fiscal plan. For the moment, it looks like the administration wants a big tax cut, large infrastructure spending, a replacement plan for the ACA, and higher spending on the military. That’s a recipe for a very large increase in the federal deficit, which the Congressional Budget Office (CBO) projects will be $9.4 trillion over the coming decade even before any tax cuts or spending increases. Trump has implied that he will find large savings in the government but without touching middle-class entitlements. There’s no evidence that he has a realistic plan to do this, but whatever ideas his team has should be presented soon if they are to have any chance of being considered. Cuts in wasteful and unnecessary domestic agencies and programs are likely to be on the chopping block, which is good, but the cumulative savings from this slice of the budget will be small.
- Will Trump support a replacement plan for health care that increases the number of Americans without health insurance? Trump has said he will deliver a health care plan that provides better care, and at a lower cost, than the ACA, and that everyone will be taken care of. The outline of the plan prepared by House Republicans, which has many good elements, is likely to assessed by CBO as increasing the number of uninsured quite substantially because it rolls back the Medicaid coverage of the ACA (albeit with a transition), eliminates the individual mandate, and does not do enough in its other provisions to make up for the exodus out of the insurance market that those provisions would trigger. Is the Trump administration prepared to support a return to 40 or 45 million uninsured Americans?
- What tough choices is Trump prepared to make to get tax reform through Congress? Trump released a tax plan during the campaign that would reduce revenues by between $4.4 trillion and $5.9 trillion over a decade, without any assumptions of higher growth. Even with higher growth, the tax cut would be, at a minimum, $2.6 trillion over a decade. The plan capped tax deductions under the individual income tax at $100,000 for single filers and $200,000 for couples, but the revenue loss is still likely to be beyond what can be accommodated for fiscal and political reasons. Is the Trump administration prepared to be even more aggressive on tax breaks to bring in more revenue while sticking to the lower rates candidate Trump proposed?
There are scores of other questions, of course, regarding the infrastructure plan, and block granting education funding to the states, and what will be done to bring better economic prospects to areas with high incidences of poverty. All of these questions were touched on during the campaign in very general terms. Now is the time to begin providing clearer answers about how exactly the administration plans to make progress in these areas, and in others.
The Trump presidency is never going to be exactly like those that have come before it. Even so, there are some things that even this administration cannot avoid forever, including making tough decisions. At some point, probably soon, the administration will have to produce a budget plan of some sort, or even an outline of a budget, with some tables and projections showing what it has in mind for spending, revenue, and deficits. Producing this plan will make it clear to the public that this administration doesn’t have a secret plan for improving things in America with no tradeoffs or costs for anyone. But the administration should welcome this moment nonetheless because it will mark the starting point of a more serious phase of policymaking that could still produce some very positive results for the country. And, in the end, it’s results that will actually matter.
James C. Capretta is a resident fellow and holds the Milton Friedman chair at the American Enterprise Institute.