Donald Trump's week of wins via tax reform and foreign policy

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This was published 6 years ago

Donald Trump's week of wins via tax reform and foreign policy

By Nick O'Malley

It was in May last year that Donald Trump told dazzled supporters at a campaign rally that under his leadership they were going to win so much that they were going to get tired of winning.

"You'll say 'please, please Mr President, it's too much winning. We can't take it any more'."

Almost a year into his presidency, though, Republican donors and parts of Trump's loyal base were beginning to notice that there has not been quite that much winning. The economy is humming along nicely, in exactly the same trajectory it was before the election, but Trump's Republican Party had failed to pass a single significant piece of legislation. It had failed even to hold together the votes to repeal Obamacare, having voted to do so 70 times while Barack Obama was in office.

On Tuesday Rex Tillerson, the Secretary of State in whom Trump has so publicly lost faith, lamented to American diplomats in Brussels that "we don't have any wins on the board yet".

US President Donald Trump signs the proclamation recognising Jerusalem as the capital of Israel.

US President Donald Trump signs the proclamation recognising Jerusalem as the capital of Israel.Credit: The New York Times

At times this year, the Trump administration has resembled an enormous machine with a key component missing, creating noise and heat and smoke all to little practical end.

But this week, Republicans have enjoyed a huge political win. Trump made a major change in American foreign policy and announced a raft of measures and positions that seem designed to further cement his standing among his die-hard supporters.

Aware of the Republican Party's slim Senate majority, Trump has endorsed the controversial hardliner Roy Moore, who is running for one of Alabama's two Senate seats. Moore has twice been removed as the conservative southern state's chief justice for ignoring federal court directives - one to remove a tablet of the 10 Commandments from his courthouse and one to allow gay people in his state to marry in keeping with a ruling by the Supreme Court.

His stance has made him a favourite among Trump supporters, who dismiss allegations by nine women of sexual misconduct, including against one who was 14 at the time. Trump this week endorsed Moore, and in a demonstration of the President's authority over the party, the Republican National Committee followed suit.

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Palestinian protesters burn an effigy of US President Donald Trump.

Palestinian protesters burn an effigy of US President Donald Trump.Credit: AP

On Monday Trump moved to shrink two prominent national parks, calling for a reduction of Bears Ears National Monument by 84 per cent and Grand Staircase-Escalante National Monument by 50 per cent. Bears Ears was created by the Obama administration and its reduction is seen as a move to eventually allow for commercial oil drilling.

The administration enjoyed another win when the Supreme Court allowed the third version of Trump's travel ban against six Muslim-majority nations to go into effect despite ongoing appeals.

Donald Trump said he would dramatically reduce the size of  Bears Ears National Monument.

Donald Trump said he would dramatically reduce the size of Bears Ears National Monument.Credit: The New York Times

Perhaps the most significant developments were the passage of tax reform bills through both the Senate and the House of Representatives and the President's announcement that he would recognise Jerusalem as Israel's capital and begin the process of moving the US embassy from Tel Aviv.

In tax reform, it now appears Republicans are likely to pass their first significant legislation, a measure that has long been demanded by supporters and donors.

Some US senators shared images of the tax legislation, which included handwritten additions along the margins.

Some US senators shared images of the tax legislation, which included handwritten additions along the margins. Credit: The New York Times

The details have not yet been settled upon. The House and the Senate passed different bills, which must now be unified in conference before being signed into law by the president.

On Tuesday, Trump said Congress were working on the bill "so that it comes out very beautifully", The New York Times reported. "I call it 'the mixer'," he said. "It's a conference where everyone gets together and they pick all the good things and get rid of the things they don't like."

What the bills have in common is sweeping corporate and personal tax cuts across the board that non-partisan analysts calculate will cost anywhere from $US1 trillion ($1.33 trillion) to $US1.5 trillion over the next decade. So enthusiastic are congressional Republicans about passing the measure and securing a rare political win that the so-called "deficit hawks" who blocked all spending measures under the Obama administration have come on board.

The passing of the bills has been welcomed by the Republican Party's most powerful - and generous - supporters.

"The decades-long drive toward meaningful tax reform is closer than ever to becoming a reality," said US Chamber of Commerce president Thomas Donohue during the week. "We applaud the senators who today advanced a legislative package that will grow the economy, create jobs, and allow middle-class Americans to keep more of their hard-earned money. This bill will encourage investment here in the United States as businesses hire workers, expand facilities and buy new equipment."

Similarly, the bill's authors say that the tax cuts will provide such a boost to the economy that the costs will be negated. So far no independent analysts have agreed.

"The biggest loser in all this was their commitment to fiscal discipline, which went away as fast as you can blink," said Maya MacGuineas​, president of the non-partisan Committee for a Responsible Federal Budget, Bloomberg reported.

The administration's critics have been even more fierce. The fact that the overhaul bills were written without any hearings into their impact, so fast that those who voted on them had no chance to read them, and with additions handwritten into the margins, has prompted furious condemnation.

"The Republican Party is now rationalising and enabling Mr Trump's autocratic, kleptocratic, dangerous and downright embarrassing behaviour in hopes of salvaging key elements of its ideological agenda: cutting taxes for the wealthy (as part of possibly the worst tax bill in American history), hobbling the regulatory regime, gutting core government functions and repealing Obamacare without any reasonable plan to replace it," wrote political scholars Thomas Mann and Norman Ornstein.

Nobel Prize winning economist Paul Krugman wrote in The New York Times that the bill was a "giant scam" in which short-term tax cuts for the poor evaporated over years while massive cuts for the wealthy were locked in. "The core of the bill is a huge redistribution of income from lower and middle-income families to corporations and business owners," he wrote.

Responses to Trump's decision to recognise Jerusalem as Israel's capital have been similarly mixed.

Both Israelis and Palestinians claim the city as their own and it has long been the international position that its final status should be settled by negotiation between the two parties. This has been reflected in US foreign policy over the past 70 years. After lobbying from groups including the powerful American Israel Public Affairs Committee, Congress passed a law in 1995 saying that Jerusalem should "remain undivided" and that the US should move its embassy to the city.

Republican and Democratic presidents since then have typically voiced support for such a move but not acted upon it, aware that the move could be seen as endorsing Israel's claims and therefore inflame regional tensions, destabilise Arab allies, provoke violence and undercut America's role in the peace process.

This careful approach ended abruptly with Trump's announcement on Wednesday, which was warmly welcomed by AIPAC and Israeli Prime Minister Benjamin Netanyahu, but criticised by other world leaders including British Prime Minister Theresa May, Turkish President Recep Tayyip Erdogan and the Pope, who voiced his "deep concern" over escalating tensions and called for "respect for the city's status quo".

Hamas, the Islamist Palestinian movement running the Gaza Strip, said that with his decision Trump had "opened the gates of hell".

Some analysts believe the decision has effectively ended the chances of a peace deal being pursued by the President's son-in-law and senior adviser, Jared Kushner.

"It is very, very hard to imagine how that peace effort can be continued," Ghaith al-Omari, who served as an adviser to the Palestinian Authority's negotiating team from 1999 to 2002, told Politico. "All the Arab leaders who have been cultivating relations with the new administration will be forced to come out very strongly against this."

Dr Matthew Levitt, an expert in counter-terrorism with pro-Israel think tank the Washington Institute, said he believed most dire predictions of critics would probably not happen, and noted that Trump's statement on the decision was nuanced, calling for all parties to maintain the status quo at Jerusalem's holy sites.

But he said it could result in violence. "It is not a decision I would have made," he told Fairfax Media.

Writing for the Brookings Institution, a leading non-partisan US think tank, Professor Shibley Telhami, an expert in US relations with the Islamic world, could come up with only two reasons why Trump would have made such an announcement.

"The first is that his advisers live in their own bubble, reinforced by unprecedented inexperience," he wrote. "But there is a second possibility: That the Trump administration has already given up on its 'deal of the century' and is looking for ways to pin the blame on someone else."

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Either way, the passage of the tax bills and the Jerusalem announcement served to distract US media from Robert Mueller's investigation into the Trump campaign's relationship with Russia, which appears to be rapidly progressing.

After news last week that the President's former national security adviser Mike Flynn had pleaded guilty to lying to the FBI and treated with leniency for his agreement to co-operate further with the investigation, this week came news that Trump's banking records with Deutsche Bank have been subpoenaed.

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