Manhattan Institute scholars evaluate the policy vision President Trump outlined to Congress.
Presidential addresses are known for promising pain-free solutions to intractable problems. President Trump’s address, while strong in many ways, was no exception. Runaway spending is set to drive the annual budget deficit to $1.4 trillion within a decade – and $3.0 trillion annually in the following decade. Yet President Trump promised historic spending hikes for defense, veterans, infrastructure, border security, and child care. At the same time, he did not pledge to rein in the Social Security and health care costs which (along with net interest) will be responsible for 82 percent of all projected federal spending increases over the next decade. If one assumes that tax reform will reduce tax revenues, and that Obamacare’s replacement will cost as much as the current system (quite possible under the President’s reform requirements), budget deficits could soar to catastrophic levels. Budgeting is about setting priorities, so hopefully the President will offset his important new investments with spending restraint.
Additionally, the White House budget proposal will reportedly call for a 10.4 percent cut in the $519 billion non-defense discretionary budget. Given the President’s call for large increases in infrastructure and veterans’ assistance – two of the largest items in that category -- it will be interesting to see how his budget proposal makes the math work.
Tonight, the President gave a full-throated endorsement to House Speaker Paul Ryan's Better Way plan, most critically to the tax credits that can enable low-income uninsured Americans to purchase health insurance. This should help resolve disputes over the credits in the House and Senate, with the President embracing the tax credit strategy and protections for patients with pre-existing conditions.
He also hit key Republican talking points on restoring consumers' choice of plans, not government mandated plans, and lowering the cost of health insurance and prescription drugs. At the same time, he called for accelerating patient access to more innovative treatments by singling out parent and rare disease advocate John Crowley, who has been a tireless champion of not only his own family, but all families struggling with rare diseases. It was a touching moment, and one that shows America's patients that the White House "gets it.
Throughout his speech, the President managed to combine blue-collar aspirations for better jobs and safer streets with Kennedy-esque rhetoric on the vocation of Americans and America's leaders to embrace historic challenges - like delivering medical miracles to children fighting rare diseases. The leaders most empowered by this speech were House Speaker Paul Ryan, HHS Secretary Dr. Tom Price, and the next FDA Commissioner - whoever that may be. They will be tasked with taking the President's vision and transforming it into concrete policy.
President Trump clearly re-articulated his campaign goals of repealing Obamacare, lowering taxes, deregulation, rebuilding infrastructure, school choice, enforcing immigration laws, and strengthening America’s defenses. Some of these promises can be accomplished without new legislation, but others will require congressional action. With Republicans applauding and Democrats practically sitting on their hands, enacting new legislation outside budget reconciliation could be a tough goal. It is especially important for Congress to be turning its attention to tax reform, which has the biggest potential to jumpstart the economic growth that is needed to provide the jobs President Trump has promised.
The address illustrates that governing is not easy. President Trump “reaffirmed our unbreakable alliance with the State of Israel.” He also criticized countries that charge 100% tariffs on Harley-Davidson bikes, displayed that afternoon at the White House. But Israel is one of those countries that charges a 100% tariff on Harley-Davidsons.
We've gotten used to politicians declaring that education is the "civil rights issue of our time," but tonight President Trump said more than that. He said that we must enrich not only the mind but also the souls of American children, and called on Congress to pass a bill that would give low-income students the freedom to choose the public, private, religious, or home school of their choice. He highlighted a young woman whose life was fundamentally changed by a tax credit scholarship program, tipping his administration's strategy to expand school choice. A federal tuition tax credit has real promise, but the details will matter immensely. Hopefully, his administration will take as much care in the details of their school choice initiative as they did in preparing this speech.
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