Deals might be struck on trade, drug pricing, criminal justice reform and fixes to the tax law.
President Donald Trump disparages Democrats as the party of “obstruct and delay,” but he may be forced to work across the aisle next year if he wants to achieve any of his legislative goals — from winning approval for a renegotiated North American Free Trade Agreement to reining in drug prices.
“Can we get along? Maybe,” Trump said earlier this month in an interview on “Fox & Friends.” “We have a lot of things where there is commonality.”
Fresh off a rancorous Supreme Court fight and campaign season, 2019 may not look like a promising time for deals. But if Democrats win control of the House next month, the two sides actually have an incentive to work together on at least a few issues — even while congressional investigations and continued calls for impeachment create fireworks. That’s because two years of gridlock risks alienating the moderate voters both Democrats and Republicans want to woo ahead of the 2020 presidential election.
“If you actually go out there and talk to voters … they want the two parties to figure out how to somehow solve their problems and get things done,” said Chris Kofinis, a Democratic strategist and former Senate aide. “There’s a risk and a danger here that is not really clear when you’re in the fight.”
That said, Democrats want to avoid being seen as handing Trump any political or policy victories as soon as they (they hope) take over the House, no matter what the subject matter is, Kofinis said. They’re also grappling with how they can negotiate “with someone who is this erratic,” he added.
White House officials, meanwhile, are unsure how the new power dynamics might play out. “Are they going to spend all of their time just wanting to investigate and impeach and set the stage for 2020?” asked a senior administration official. “Or will there be a willingness to work together? I think that’s really the biggest ‘X‘ factor that we don’t know.”
No one in the administration has “a Pollyanna view of the world, that we’re all going to come together and do big things,“ the official added, “but you still have to keep the trains running on time, and there are still bills that get done on a bipartisan basis.”
Besides passage of a new NAFTA, one of the issues most likely to gain traction is drug prices — a topic of big concern to the bases of both parties, as well as to swing voters.
After discussing drug prices with Trump, Rep. Peter Welch (D-Vt.), co-head of the House Democrats’ task force on drug pricing, said he believes the president is more in sync with Democrats’ views than with those of his own party. “It was very clear he gets what’s going on — [that] Pharma’s ripping us off,” Welch said. “If we get legislation through the House … he can follow through on things he said in the campaign and as president, and put his signature where his mouth has been on lowering prescription prices.”
Moving forward on a trillion-dollar infrastructure deal, on the other hand, is almost surely a nonstarter, despite the enthusiasm professed by both sides. Coming together on a $1.5 trillion package that spends real money is virtually impossible unless Democrats and Trump can agree to raise new revenues, cut other programs or add to the debt — all heavy lifts when the federal deficit is surging toward $1 trillion.
At the top of the Trump administration’s legislative agenda for 2019 is passage of the renegotiated NAFTA, now called the U.S.-Mexico-Canada Agreement. And on that issue, perhaps more than any other, Democrats are likely to find a lot on which they can agree with the White House.
The updated agreement with Canada and Mexico, completed after more than a year of contentious talks, includes provisions that would raise wages in Mexico and boost manufacturing in the United States, among other changes that experts say should help Democrats champion the pact.
“There’s a fair bit for the party to like in this,” said Edward Alden, a senior fellow at the Council on Foreign Relations. “It might be one of the few areas that Democrats can actually cooperate with the White House.”
That isn’t entirely by accident: U.S. Trade Representative Robert Lighthizer has maintained a close relationship with labor groups throughout the negotiations and appears optimistic the final deal will win their support — and by extension, the support of their Democratic allies.
But it’s also likely Democrats won’t sign off on the agreement without insisting on changes in the implementing bill that might further tighten labor standards and increase the deal’s enforceability.
Moving the agreement along offers political benefits for everyone because it would remove the uncertainty that has existed since Trump began threatening to withdraw from NAFTA during his campaign. It would also allow the U.S. trade office to move on to other increasingly pressing issues, like the trade war with China and the effect of tariffs on American farmers and consumers.
“As we sit here today in early October, it might feel like a pipe dream,” said Kellie Meiman Hock, a former USTR official and partner at McLarty Associates, a trade consultancy firm. “But I certainly hope that there’s a deep enough understanding at this point that we truly need to preserve integrated North American markets, that there can at least be an opening for conversation.”
“If there is anything bipartisan, it’s lowering drug prices,” Trump said at a White House bill-signing ceremony earlier this month.
Certainly, voters of both parties tell pollsters they are fed up with rising drug costs. And that concern is only expected to intensify as new cancer treatments priced at $500,000 a pop come on the market and consumers face ever-higher deductibles before their insurance coverage kicks in.
“If you wanted to pick the No. 1 issue that united the Trump voters and Bernie [Sanders] voters,” drug pricing would be it, said Celinda Lake, a Democratic pollster.
Rep. Lloyd Doggett, a Texas Democrat who has garnered 100 co-sponsors on his drug price negotiations bill, said he is optimistic the president will work across the aisle on drug pricing legislation “because he was so strong in what he said.”
Still, no one thinks a big breakthrough is likely. Trump the candidate pushed the idea of allowing the government to negotiate Medicare drug prices — an idea long championed by Democrats. But the idea is anathema to Republicans and the powerful drug lobby, making it a near impossibility in a split Congress.
Far more likely to win bipartisan support are incremental reforms that would require drugmakers to disclose their list prices in advertisements, or force greater transparency around their relationships with pharmacy benefit managers to ensure the companies aren’t colluding to keep prices high, said Tara O’Neill Hayes, deputy director of health care policy at the center-right think tank American Action Forum.
“I think you can see a dynamic where you have a Republican president, a Democratic House and a very split Senate, with some Republicans wanting to show they are willing to take on PhRMA actually lead to some sort of progress in an area that is always extremely difficult to make progress,” said Chris Jennings, who advised Hillary Clinton on health policy.
Other proposals that could win cross-aisle support would increase Medicaid penalties on companies that raise their list prices above the inflation rate, and prevent brand drug companies from abusing Food and Drug Administration safety programs to block cheaper competition.
Criminal justice reform
Collaboration on criminal justice reform could also happen, given one of the rare bipartisan legislative feats this year: a federal prison overhaul, which cruised to House passage in May with 134 Democratic votes.
The measure, championed by presidential adviser and son-in-law Jared Kushner, offers new vocational training to prisoners that’s designed to reduce repeat offenses, among other changes — but it doesn’t tweak federal sentencing rules, which has stalled it in the Senate.
That’s because influential Senate Judiciary Chairman Chuck Grassley (R-Iowa) wants to see a compromise approach that pairs prison reform with some of the sentencing guidelines he and Democrats spent years negotiating.
If House Democrats take power next year, they likely would be inclined to support Grassley’s efforts, and the Iowan also has several key Senate GOP allies in his corner.
Trump himself might sign on to that deal, given the issue’s support from Kushner and the powerful Koch brothers network. The administration’s biggest public critic of adding some sentencing changes to a criminal justice bill, Attorney General Jeff Sessions, is widely viewed to be on his way out after the midterms.
It’s also possible, however, that the issue could be resolved as soon as next month, if advocacy groups and other supporters put enough pressure on Senate Majority Leader Mitch McConnell to hold a vote later this year.
Tweaks to retirement savings, tax law
Optimism over cooperation on tax policy and trade is due to the deal-making reputation of Rep. Richard Neal, who would take the gavel of the House Ways and Means Committee if Democrats take control of the House. The Massachusetts Democrat is known as a pragmatic operator willing to work across the aisle — a position that could also bode well for discussion of tax law changes, which would also fall under his purview.
“Moderate Republicans really like Mr. Neal,” said Evan Migdail, a tax lawyer at DLA Piper.
Ways and Means Committee cooperation might be possible on retirement savings issues and smaller-bore infrastructure measures related to tax breaks to spur private investment or the creation of a new bank that could seed investments.
“Mr. Neal has said from Day One that he’d be willing to work with the administration on those issues if the president comes to the table in good faith,” said a source close to Neal.
Of course, Democrats’ assertions they would use their newfound authority at Ways and Means to obtain Trump’s still-undisclosed tax returns and share them publicly is a big wild card that might result in an entirely different relationship. A nearly 100-year-old statute allows the chairmen of Congress’ tax committees to look at anyone’s returns, and Democrats say they intend to use that power to help answer a long list of questions about Trump’s finances.
Neal is said to be aware that overplaying that hand could poison the well for any deal-making, though his staff would most definitely probe the material if he’s running the committee, said another lobbyist on condition of anonymity.
Neal could also potentially play ball on tweaking parts of the 2017 tax cut law that aren’t working as intended or were wrongly drafted, Migdail said. He isn’t expected to push for a wholesale reversal of the law with Republicans likely still in charge of the Senate, though victories by far-left Democratic challengers would complicate matters.
Instead, he would likely focus largely on tax law changes that would affect only wealthy taxpayers, like raising the top rate to 39.6 percent — its level before the GOP tax cuts — as he proposed last month during a markup of other Republican tax legislation.