Trump vs. Congress: Now What?

© Christopher Anderson/Magnum, for The New York Times Donald Trump in the Oval Office on March 21.

On Monday, Jan. 9, less than two weeks before President Trump’s inauguration, the House speaker, Paul Ryan, hosted a dinner at his office in the Capitol with members of Trump’s inner circle. The guests included the president-elect’s chief White House strategist, Stephen K. Bannon; his son-in-law and family consigliere, Jared Kushner; his chief of staff, Reince Priebus; his economic adviser, Gary Cohn; his nominee for Treasury secretary, Steven Mnuchin; his incoming deputy chief of staff, Rick Dearborn; and his legislative-affairs director, Marc Short. The ostensible purpose of the dinner was to discuss the details of Trump’s legislative agenda — in particular, the prospects for a sweeping tax-reform measure that Republicans, and especially Ryan, have been coveting for the past decade.

It was hoped that the dinner could also establish some sort of common ground between Ryan and Bannon, the two figures who would arguably wield the greatest influence over how Trump’s campaign promises became law — or didn’t. Ryan was a fixture among establishment Republicans even before joining Mitt Romney’s presidential ticket in 2012, his previous labors on the House Budget Committee cementing his reputation as the charts-and-graphs wizard of fiscal conservatism. Bannon, by contrast, was a renegade autodidact who read Plato and had seemingly materialized from nowhere to become the intellectual architect of Trump’s campaign and, later, administration.

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Up to this point, Ryan had epitomized to Bannon everything that was wrong with the Republican Party. Discussing the two parties’ shortcomings, Bannon later told me, “What’s that Dostoyevsky line: Happy families are all the same, but unhappy families are unhappy in their own unique ways?” (He meant Tolstoy.) “I think the Democrats are fundamentally afflicted with the inability to discuss and have an adult conversation about economics and jobs, because they’re too consumed by identity politics. And then the Republicans, it’s all this theoretical Cato Institute, Austrian economics, limited government — which just doesn’t have any depth to it. They’re not living in the real world.”

Breitbart News, the far-right media outlet Bannon ran before becoming the chief executive of the Trump campaign in August, had described Ryan, referring to his position on immigration, as “arguably the most pro-amnesty G.O.P. lawmaker in Congress” — an apostasy of nearly impeachable proportions from Bannon’s perspective. Worst of all, Ryan all but abandoned Trump during the 2016 campaign. After the leak in October of the damaging “Access Hollywood” tape, Ryan told fellow Republican House members on a conference call, “I am not going to defend Donald Trump — not now, not in the future.” A Republican lawmaker on the call told Trump what Ryan had said, yet another reason for Bannon to regard himself as Ryan’s worst enemy.

But as the dinner progressed, it became clear that Bannon and Ryan actually had some ideas in common. Over memorably bad chicken Parmesan, Ryan described his vision for a “border-adjustment tax,” which would levy taxes on imports while offering exemptions for exports. His tax package would include “immediate expensing,” he explained, in which capital expenditures would be written off against profits in the first year rather than over time. It also would abolish the alternative minimum tax and the estate tax.

These were ideas Ryan had been pushing since 2008. Now they had Bannon’s attention. Taken together with a drastic reduction in corporate taxes, Bannon believed, Ryan’s scheme would spur a renaissance of a manufacturing-based export economy, producing high-income labor in keeping with Trump’s populism. “I would actually say,” Bannon remembers observing admiringly, “that this tax reform comes as close to a first step of economic nationalism as there is.”

“I would call it ‘responsible nationalism,’ ” Ryan said, according to Bannon.

Bannon laughed. “You’re going to have a lot of folks in the Senate say this is breathtakingly radical.”