The latest messages coming out of the White House give a conflicting account on whether the Trump administration would support tax cuts regardless of whether they’re paid for.
Perhaps surprisingly, President Donald Trump seems to be taking a harder line on the need to be deficit neutral than Office of Management and Budget director Mick Mulvaney, a former hard-line congressional Republican.
In an interview with Maria Bartiromo on Fox Business, Trump said the health-care law needed to come before tax reform, referencing the roughly $900 billion over a decade that eliminating Obamacare for a program that would cover fewer Americans would save.
“If you look at the kind of numbers that we’re talking about, that’s all going back into the taxes,” Trump said.
Read: Trump says he has to do health bill before tackling tax reform
Mulvaney didn’t seem as stressed about being deficit neutral.
“It’s a little less important to me if infrastructure adds to the deficit,” he told CNBC’s John Harwood. “And I’m really not interested in how tax reform handles the deficit.”
The difference between Trump and Mulvaney may reflect messaging rather than substance.
If tax reform is done via the reconciliation process — which would prevent Democrats from filibustering it in the Senate — then, per Senate rules, it must reduce the deficit.
But Senate Majority Leader Mitch McConnell has already demonstrated a willingness to junk the upper chamber’s traditions when he allowed for a majority approval on the vote to confirm Neil Gorsuch to the Supreme Court. If McConnell wanted to eliminate what’s known as the Byrd Rule to allow legislation through the reconciliation process that would lift deficits, he would just have to convince his Republican caucus to go along.
Trump, in wanting health-care legislation to come first, may simply be buying time for McConnell to announce that willingness to sacrifice deficit neutrality to the world. And if Trump and his budget director are on the same page, the prospect not just of the size but also the magnitude of tax cuts increases.