The paradox of Trump's first weeks

As Trump grabs power, congressional Republicans' legislation is treading water

Donald Trump is flooding the zone with executive actions and provoking a potential constitutional crisis by seeming to defy a district court order that he halt a federal freeze on grant payments.

Conservatives are enthusiastic about his apparent level of political mastery, and Democrats of all stripes are feeling despondent. There’s pressure on congressional Democrats to vow to shut the government down unless Trump starts spending duly appropriated money, and also countervailing pressure from leadership to avoid looking too eager to stage a shutdown. I see both sides of the argument here:

• On the one hand, there is genuinely no point in negotiating a bipartisan appropriation bill if the president is going to ignore its terms. Setting aside the question of the courts, the entire premise of a bipartisan spending deal is precisely that money will be spent on programs the president doesn’t want to spend money on. If there’s no spending the GOP doesn’t agree with, that’s not a bipartisan deal. Democrats can’t make a deal on those terms.

• On the other hand, in recent political history, whichever party is seen as “wanting” a shutdown ends up taking the political blame and “losing” the battle. Democrats have to be somewhat careful about how they approach things.

There’s no obvious winning strategy for Democrats. It’s a dynamic situation, because Trump keeps doing new stuff. His approval rating is above water, so pure anti-Trumpism isn’t an obvious winner. And I think continuing to play for time is, to an extent, the best Democrats can do right now. A mid-March shutdown seems very likely to me, but you want that to happen despite Democrats’ best efforts to negotiate in good faith rather than as an avowed strategy.

At the same time, I want to push back on the idea that I’ve heard from a wide range of quarters that this all proves Trump is some kind of political mastermind.

His approval rating is better than it was at this point in 2017, but that still means he’s less popular than every other newly elected president in mid-February. Taking office with a flurry of executive orders is not a new idea by any means. And the actual dollar sums of money involved in Trump’s actions so far are smaller than Biden’s executive actions associated with student loans or SNAP benefits. Most of all, the frenetic pace of activity from the White House is serving, at least in part, to obscure the extent to which congressional Republicans are spinning in circles over a budget reconciliation bill.

Of course, if Trump succeeds in setting himself up as a dictator, unconstrained by courts, Congress, or the rule of law, nobody will really care if the 2025 legislative agenda was a bust. But I don’t want to pre-concede that outcome. And so it’s worth paying attention to the fact that, in part, all this DOGE activity reflects the extent to which conservative fiscal politics is at a bit of a dead end.

Trump's focus on “efficiency” is misdirection

Barack Obama launched a “campaign to cut waste” that at, a high level, sounds similar to some of Trump’s messaging. Obama even wanted to get rid of the penny, just like Trump, because it’s wasteful to manufacture coins that cost more than their face value.

At the time, I was mostly annoyed by this. Today, as we’ve written before, things are different.¹

But here’s the important point: Even when Obama was talking about cutting waste and improving efficiency as part of his drive to reduce the deficit, that was really just passed appetizers. His actual program for deficit reduction was to close tax loopholes and reform major spending items — i.e., Social Security and Medicare.

The whole political foundation of Trumpism, however, is built on the idea that culturally conservative old people can vote Republican without fear of their retirement programs taking a hit. And, of course, Trump wants to cut taxes rather than raise them.

But he’s also promised to bring down the cost of living, and that would require doing something about the bird flu pushing up egg prices and thinking harder about tariffs. It also means acknowledging that the cost of money is part of the cost of living, even if it’s not included in the official inflation statistics. If interest rates go up rather than down, people are going to notice, and it’s also going to continue crimping the housing supply with negative downstream consequences for rents. So while Republicans certainly can run back the 2017 playbook of doing a huge deficit-increasing tax cut, both the merits and the politics are much dicier.

Republicans don’t know what they want to do

Back in 2021, the House and Senate passed reconciliation instructions on February 5, and the American Rescue Plan was introduced on the House floor on February 8. That set up the March 11 passage of a $1.9 trillion bill.

In 2025, as of February 10, Mychael Schnell of The Hill was reporting that Mike Johnson said there were three outstanding issues left in the House’s discussion of a budget resolution, one of which, to quote Johnson, is “exactly how we cover the cost of expanding the tax cuts and achieving the other priorities.”

That’s a big blank spot.

Politico reports that Republicans are talking about how to achieve $2.5 trillion in spending cuts without touching Social Security, Medicare, or defense (the three largest programs), but also that they might not bother with this at all. The $2.5 trillion is a promise to right-wing members of the caucus to get them to vote for a debt ceiling increase. One possibility is that they drop the debt ceiling increase, structure the tax package with no offsetting spending cuts at all, and just end up massively increasing debt. Then, they’re left asking Democrats to vote for a debt ceiling increase that right-wing House members won’t vote for, which gets back to the question of Democrats’ leverage over Trump.

But separate from the mechanics of the debt ceiling, there’s the question of reality — the $2.5 trillion in cuts that they might or might not do isn’t nearly enough to cover any version of Trump’s tax promises, much less the expansive ones that include “no tax on tips” and “no tax on Social Security.”

Meanwhile, Senate Republicans are ahead of their House colleagues in the sense that Budget Committee Chair Lindsey Graham has written the text of reconciliation instructions. Except Graham’s text doesn’t address any of these tax issues at all!

Instead, he’s pursuing a “two bills” strategy in which the first reconciliation bill will be dedicated primarily to increasing spending on the military and border security and offsetting it by repealing some of the clean energy spending from the Inflation Reduction Act. Graham’s conceit is that just as the $1.9 trillion American Rescue Plan was followed up by a second reconciliation bill that began life as Build Back Better and became the IRA, his modest $85.5 billion bill can pass relatively quickly and buy Republicans time for an extended process around the multi-trillion dollar tax bill.

House leadership seems to have made the opposite calculation, that the easiest way to get the giant tax bill done is to increase the pressure to do something by loading the entire GOP agenda into one mega-bill.

Beyond the tactical dispute is, I think, a question of substance. Graham is a defense hawk who wants to see a GOP trifecta significantly increase military spending. He’s aware that many of his House colleagues don’t fully share his enthusiasm on this point, and also that they are struggling enormously to make their tax cut math add up. Under the circumstances, the odds are pretty high that as the House’s one big bill comes together, the idea of raising defense spending falls out just to make the numbers easier.

All of which is to say that Republicans have made basically no progress whatsoever on tax legislation. What they have at this point is just an agreement that Republicans prefer lower taxes, which is the baseline politics of the past two generations.

Trump is facing real challenges

My assumption is that Republicans will, in fact, pass a big tax cut at some point. To venture a forecast, I think this legislation will:

• Extend TCJA but make very little of it permanent

• Raise the SALT cap, but again only temporarily

• Drop “no tax on tips” and “no tax on Social Security”

• Feature cuts to Medicaid, SNAP, and clean energy spending that are big enough to pretend it’s deficit neutral, but not nearly large enough to finance making the tax cuts permanent

This will be a kind of deadly triple play that puts upward pressure on inflation and interest rates because it relies on budget gimmicks and features unpopular spending cuts that unify Democrats in opposition and largely fails to enact the kind of permanent policy changes that are worth spending political capital on. Any change on any one of those dimensions worsens the other two. If you cut spending less, the program is more inflationary. If you press for more permanence, you worsen the tradeoff between inflationary pressure and the need for unpopular spending cuts.

I think there’s a sense in some quarters that Trump has accomplished more in three weeks than Biden did in three years, but this is just not true. I do think it’s true that Biden achieved less durable policy change than you’d expect relative to the sums of money appropriated due to Democrats’ over-reliance on temporary programs. But they still made substantive changes in absolute terms on the areas they prioritized, including prescription drug affordability for senior citizens and clean energy deployment. Much of that seems likely to be kept in place by the new GOP trifecta.

Republicans, meanwhile, are making very little forward progress on their legislative agenda.

This is not to minimize the reality that Trump is doing harmful things. Disinvesting in global public health is jeopardizing tens of millions of lives. He is normalizing corruption in a way that will have major negative consequences if it’s seen as politically successful. He’s wrecking America’s reliability as a diplomatic partner, he’s eroding the rule of law, and he’s endangering the welfare of low-income Americans.

It’s also true, I think, that Trump has been able to consolidate mainstream Republican support for his unlawful behavior in part because Republicans do not have a viable legislative agenda, despite their trifecta. George W. Bush tried to significantly reduce Social Security spending. Mitt Romney ran on significantly reducing Medicare spending. Trump, in his first term, tried to completely eliminate ACA subsidies, completely eliminate Medicaid expansion, and then cut Medicaid even more to below the pre-ACA level. None of this succeeded.

The DOGE hyper-focus on things like foreign aid and the Department of Education is kind of clever politics, but the cleverness lies precisely in its ability to provide cover for diminished aspirations in the face of these failures. Trump is many things, but he is most of all a showman, who’s doing a good job of performing mastery rather than letting attention fall on the razor-thin GOP majority and their somewhat incoherent policy agenda.

The fact is, Republicans don’t have a politically or economically viable path to creating the level of taxation that they want. Rather than try to reconcile themselves to that reality and come up with a more realistic fiscal agenda, they are lashing out at the pillars of the political system itself.

1. One of the great ironies of recent American political history is that a lot of stuff that Obama did would have been better-suited to the problems Biden faced and vice versa.