Tuesday, 17 October 2017
After yesterday’s Rose Garden press conference, where President Donald Trump and Majority Leader Mitch McConnell assured reporters that they have a “good” relationship, they appear to have put their widely publicized feud behind them. But having patched things up with McConnell, *Trump is now reportedly trying to convince his one-time employee, former White House Chief Strategist Steve Bannon, to temporarily suspend his attacks on “establishment” Republicans while Trump tries to unify Republicans around his tax-reform plan* and the administration scrambles to meet its self-imposed year-end deadline to pass what would be its first major legislative achievement.
However, despite Trump’s public pleas for Bannon to stand down, the Breitbart chief is refusing to play ball. *Bloomberg is reporting, citing anonymous sources who are presumably close to Bannon, that the former Trump campaign chief executive has refused to abandon his war against congressional Republican incumbents, further imperiling Trump’s tax-reform plans.*
Bannon’s message, Bloomberg says, was aptly encapsulated by a headline that ran on Breitbart on Monday. It reads: “Bitter Mitch! Triggered by Bannon.”
The headline was affixed to a story about the Bannon-allied Great America Political Action Committee on Monday endorsing its “Trump Ticket” for the Republican primaries, which includes Kelli Ward, who is challenging incumbent GOP Senator Jeff Flake in Arizona, and in Wisconsin, Kevin Nicholson, who has said he would vote against re-electing McConnell as majority leader.
*There are deep fears in the White House and among Republicans that the tax overhaul, considered vital for next year’s midterms by the party’s strategists, will follow Obamacare repeal to the legislative ash heap.* That would likely leave Trump without a substantive legislative accomplishment after a year in office.
Since the Senate’s fractious Republican Caucus has already let Trump down by twice failing to pass Obamacare, *the president is understandably seeking to hedge by making overtures to Democratic senators in states that he carried during the campaign.*
Last week, reports surfaced that McConnell was courting West Virginia Senator Joe Manchin III, one of the last remaining conservative-leaning Democratic lawmakers, to try and gain his vote on tax reform.
Meanwhile, Trump has invited Democratic Senators Bob Casey of Pennsylvania and Debbie Stabenow to the White House.
*In a sign of his increasing concern about the tax overhaul, Trump also sought to cover his bases with the opposition party, inviting Democratic senators Bob Casey of Pennsylvania and Deborah Stabenow of Michigan to participate in a meeting at the White House on Wednesday.* Both are members of the tax-writing Senate Finance Committee, and both face re-election next year in states Trump carried.
As Bloomberg points out, Republicans are defending just eight senate seats in 2018. And only one of those seats – held by Dean Heller of Nevada – is in a state that was carried by Clinton. Therefore, Republicans are for more afraid of losing a primary to a far-right candidate than they are of their Democratic challengers.
During yesterday’s press conference, McConnell noted several examples of far-right candidates who lost important races to Democrats because they failed to appeal to a broader electorate.
“The goal here is to win elections in November,” the Kentucky Republican said.
McConnell named four 2010 Republican Senate nominees: T*odd Akin of Missouri, who repulsed voters with talk about “legitimate rape”; Richard Mourdock of Indiana, who said pregnancy from rape is “something that God intended to happen”; Christine O’Donnell of Delaware, who said she’d dabbled in witchcraft; and Sharron Angle of Nevada, who said Sharia law -- Islamic religious law -- had taken over several U.S. cities.*
*“They were not able to appeal to a broader electorate in a general election,”* McConnell said.* “The way you do that is not complicated. You have to nominate people who can actually win, because winners make policy and losers go home.”*
To be sure, the push for Republican unity hasn’t stopped Trump from expressing fondness for his one-time top adviser. Indeed, as Reuters reports, Trump has refused to denounce Bannon, saying only that “Steve is doing what Steve thinks is the right thing.”
While it seems Trump has let go of his anger toward McConnell,* the president continues to seethe over Republican lawmakers who voted against the Obamacare repeal-and-replace bill.*
Reuters reports that before a Monday meeting of Trump’s Cabinet, the president criticized Republicans who voted against Obamacare repeal, saying they “should be ashamed.”
*“We’re not getting the job done,” Trump said. “And I‘m not going to blame myself, I’ll be honest. They are not getting the job done.”*
Luckily, several of the six Republican senators who were identified as possible “no” votes on tax reform have said recently that they’re leaning toward a ‘yes’ vote.
*“I am leaning ‘yes’,”* Senator Lisa Murkowski of Alaska told reporters as the chamber prepared for what is expected to be a late Thursday vote on the fiscal 2018 spending blueprint.
Senator Susan Collins of Maine announced on Sunday that she will likely vote ‘yes.’
Even Rand Paul – who recently praised the president for promising to sign an executive order that would allow insurers to sell health insurance across state lines – says he’s leaning toward a yes, a development that will no doubt please the White House. Trump, who reportedly respects Paul despite him being one of the most intransigent Republican opponents of the Trump agenda, has made winning Paul’s vote a priority.
However, if Republicans wish to see tax reform passed by the end of the year – a deadline that even Gary Cohn yesterday admitted may not be possible – the senate must pass a budget bill to unlock the reconciliation rules that would allow the senate to pass tax reform with only 50 votes.
And while Cohn's former employer continues to see higher than 50% odds that tax reform will pass this year, market-implied odds (ascertained by comparing the performance of high-tax corporates with the broader S&P 500) have essentially fallen to zero.