Following health care defeat, Trump pivots to tax reform

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• HARI SREENIVASAN, PBS NEWSHOUR WEEKEND ANCHOR:

  Yesterday afternoon, soon after the Republican healthcare bill was pulled before any vote took place, President Trump indicated that the focus will now shift to reforming the tax code. Treasury Secretary Steven Mnuchin echoed that sentiment at an event earlier in the day, saying he would push for comprehensive tax reform for individuals and corporations before the congressional recess in August. Mnuchin said that the president wants a tax cut for the middle class, not the top 1 percent.

  Just how that process will begin and how complicated it will become are open questions.

  Joining us from Washington, D.C., to discuss what lies ahead for tax reform is Nick Timiraos of "The Wall Street Journal."

  So, Secretary Mnuchin says, it is easier than reforming health care to reform the tax code?

• NICK TIMIRAOS, THE WALL STREET JOURNAL:

  Yes, that's — that's what he said. And, you know, there's an argument that he made which was along the lines of, look, taxes are something the Republicans are on the same page on. Everybody is going to want lower taxes. It's a visceral thing for Republicans.

  I think the challenge here is that the health care debacle has reminded everybody that the details do matter, right, because Republicans for years took vote after vote on repealing Obamacare. It was something everybody said they wanted to do, just the same as all Republicans say we want to lower taxes, we want to lower the corporate tax rate, to make investment and U.S. businesses more competitive.

  The problem is going to be the same. The details matter. And we don't have a lot of details yet from the administration.

  So, you know, the ball is kind of on the tee for them here to swing away and propose something, but we don't yet really know exactly what they want. And once you put those details out there, you give people, you know, a target to start shooting at.

• SREENIVASAN:

  One of the proposals we've heard repeatedly from Republicans is to lower the corporate tax rate from, say, 35 percent to 20 percent. But that comes with its own consequences.

• TIMIRAOS:

  Right. You lose a lot of revenue. And Republicans are talking about doing this using the same kind of procedural vehicle legislatively that would allow them to bypass the 60-vote threshold in the Senate so that they can do this on a party line vote. But that procedural hurdle carries its own kind of complicated set of rules, including you can't add to deficits beyond 10 years.

• SREENIVASAN:

  Does it get harder to do this after health care?

• TIMIRAOS:

  Well, Speaker Ryan said that on Friday. He said that this does get harder because there were certain taxes in Obamacare that they were going to repeal. They're not going to repeal those now.

  I think it adds to the urgency here. There will be a greater impetus because Republicans are going to want to show they can get something done. And President Trump is going to want to have a bill to sign.

  I think the other question is — you know, you were talking about tax reform. There is a difference between tax reform and tax cuts. And you hear the president a lot talk about how he just wants to cut heck out of taxes. He wants a big tax cut. That is different.

  And so, you know, it could be that the administration decides, look, we're just going to try to cut taxes here. We'll deal with the deficits later. You know, we'll propose maybe growth estimates that show that the deficits won't matter as much because we're going to grow the economy more.

  But that's another area where you're not quite sure yet if Republicans are all on the same page.

• SREENIVASAN:

  All right. Nick Timiraos of the "Wall Street Journal" joining us from D.C. — thanks so much.

• TIMIRAOS:

  Thanks for having me.