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What the tax win means for Trump, now and in 2020

Trump and Republicans in Congress now have a marquee achievement at the center of a shared economic and electoral agenda.
Image: Trump, Senate Republicans hold rally after passage of tax plan
President Donald Trump, joined by Republican members of the House and Senate, speaks about the passage of the Republican tax plan on the South Lawn of the White House in Washington on Dec. 20, 2017.Jim Lo Scalzo / EPA

WASHINGTON — By securing his first major legislative victory Wednesday, President Donald Trump demonstrated he's capable of working with his own party in Congress and added another plank to his re-election platform.

The two parties will spend much of the next 11 months — and the two years after that — fighting over whether the $1.5 trillion Republican-written tax cut is the best catalyst for the economy, whether more of the relief should have been distributed to the working and middle classes and whether it should have included its repeal of Obamacare's tax on people who don't buy health insurance.

"It is a fundamental challenge to this presidency: Can we communicate the good news of the president's economic reforms to counter Democratic spin in the other direction. That may determine whether or not the president is re-elected in 2020," said Michael Caputo, who advised Trump's 2016 campaign.

"I believe that we’re losing that war — the message war," he added. "The public is repeating Democratic talking points, true or false. It's up to the Republicans now — right now, because it's almost too late — to move forward with an assertive and effective communications plan."

This much is clear: Trump and Republicans in Congress now have a marquee achievement at the center of a shared economic and electoral agenda.

It's "rocket fuel" for the economy, Trump said Wednesday as he previewed the basic contrast Republicans will draw with Democrats in the midterms and the next presidential election. "Unfortunately, the Democrats don't like to see tax cutting; they like to see tax increases."

The sugar rush of victory has brought Trump and GOP leaders in Congress together in ways that might have seemed unimaginable just a couple of months ago.

Back then, Trump liked to rip Senate Majority Leader Mitch McConnell, R-Ky., for failing to repeal Obamacare. But on Wednesday, he heaped praise on McConnell on Twitter for doing "a fantastic job both strategically & politically" and the president said, "I could not have asked for a better or more talented partner."

"It's a big win for the president because the politics of a tax cut are never bad," said one official from Trump's 2016 campaign.

Image: Trump, Senate Republicans hold rally after passage of tax plan
President Donald Trump, joined by Republican members of the House and Senate, celebrate the plan on the South Lawn of the White House on Wednesday.Jim Lo Scalzo / EPA

"Separate from the popularity of a tax cut, it's a big win for him in pulling his congressional coalition together, (which) he wasn't able to do up to this point on anything major," the official added.

That could bode well for Trump's legislative efforts on an infrastructure package and a developing deal that would enhance border security and extend protections for people who were brought into the U.S. illegally when they were children. House Speaker Paul Ryan, R-Wis., wants to rewrite the Medicare and Medicaid programs. And Trump is still negotiating with Congress over how to keep the government funded through next September, extending the Children's Health Insurance Program and a host of other issues that weren't dealt with this year.

"Capitol Hill needed a win and they got it — incredibly tough agenda faces the administration when they return in January but they've proven they can get vital things done," said a person in former White House chief strategist Steve Bannon's camp, adding that the tax cut "dovetails perfectly with his National Security Plan in making American industry more competitive globally."

Trump's supporters say enacting the tax cut is invaluable in part because his 2020 re-election hopes hinge heavily on Republicans' ability to keep control of Congress in the midterms. If they lose either chamber, his agenda will stall. If they lose both the House and Senate, his first term could devolve into an impeachment fight.

Now, GOP candidates have a tangible achievement to point to as part of a narrative of economic growth under full Republican control of Washington.

But there's reason for Trump allies to worry that Republicans have let Democrats get the jump on framing the law as a giveaway to the wealthiest Americans. An NBC/Wall Street Journal poll found that 24 percent of respondents think it's a good idea, while 41 percent think it's a bad idea.

Jim Dean, chairman of the liberal group Democracy for America, predicted that, rather than helping Trump keep Republican control of Congress, the tax cut bill will give Democrats the weapon they need to take over.

"While it's true that they're giving millionaires, billionaires and big business a Christmas gift as they ram the Trump Tax Scam through Congress today, Donald Trump and congressional Republicans are also handing Democrats the perfect weapon for dismembering the GOP's House and Senate majorities in 2018," Dean said in a statement.

One battleground will be over the perception of a cut in the corporate tax rate to 21 percent from 35 percent. Democrats argue that the windfall will be distributed to shareholders rather than being invested in new jobs, and some heavyweight publicly traded companies have confirmed that's their plan. But Trump will be able to point to other firms that are spending on job creation.

Philip Blumberg, CEO of the privately held Blumberg Partners, said one of his firm's companies, Blumberg Grain, will invest in new facilities in Ames, Iowa, Dothan, Alabama, and the Miami area in large part because of the tax cut. Those plants will create 250 jobs, he said.

A past donor to Democrats who says he didn't vote for Trump, Blumberg credited the president and administration officials with "strong advocacy for our expansion" in overseas markets.

"There is a sea change in advocating for business as opposed to the glazed-over look" he got from Barack Obama and Bush administration officials, he said.

If the tax cut and Trump's aggressive efforts to cut federal regulations combine to spur the economy, Republicans may be able to overcome the headwinds of the president's poor current approval rating and an energized Democratic base.

"There's nothing wrong with the 2018 midterm elections for Republicans that robust growth — 3.5 percent or more robust growth quarter after quarter — can't fix," Caputo, the Trump campaign adviser, said. "2018 is going to have a huge impact on 2020. ... If we don’t (keep both chambers), this could be looked back on as the most significant achievement of his presidency."