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"I'm the king of debt. I love debt," Trump said
GOP lawmakers are struggling to enact an agenda of spending and tax reform
As a New York businessman, Donald Trump proudly referred to himself as the “King of Debt” – he thrived on taking financial risks and routinely leveraged debt to grow his family empire.
“I’m the king of debt. I love debt,” Trump told CNN’s Wolf Blitzer in May 2016 at the height of the campaign – blunt and telling comments that revealed just how comfortable the real estate mogul was in using debt as a financial tool.
But now, the mindset behind that nickname is aggravating some of the President’s Republican colleagues in Washington.
Everything you want to know about Donald Trump’s bankruptcies
As GOP lawmakers are struggling to enact an agenda of spending and tax reform, they continue to face the painful reminder that Trump has no ideological drive to tame the deficit. The President has made clear that he doesn’t mind if deep tax cuts result in a ballooning of the national debt. He is not pre-occupied with offsetting new spending; and he is entirely comfortable with a clean raising of the debt ceiling.
Trump’s statements have also raised questions about his understanding of the national debt. In a recent interview with Fox News’ Sean Hannity, Trump suggested that gains in the stock market have led to a reduction in the national debt. “We picked up $5.2 trillion just in the stock market,” he said. “So you can say in one sense, we are really increasing values and may be in a sense, we are reducing debt.”
And the coming days are about to present the most extended test of Trump’s fiscal instincts. With the passage of the budget resolution Thursday night, Republicans will now squarely turn their attention to tax reform.
‘Getting stuff done’
Kathy Wylde, president and CEO of Partnership for New York City, a prominent business coalition, said Trump is simply not as ideological as some Republicans when it comes to spending.
“Business people, New Yorkers – that’s what they’re comfortable with. Getting stuff done as opposed to pursuing an abstract, ideological agenda,” Wylde said. Unlike some GOP lawmakers, she added, “they’re not there to uphold abstract principles.”
In fact, Trump has recounted his personal run-ins with debt in his various autobiographies. Owing money to powerful individuals and institutions marked some of the lowest – and most unpleasant – moments of Trump’s career.
In the book “Think Big and Kick Ass in Business and Life,” co-written with Bill Zanker, Trump described being in “deep, deep” financial trouble in the early 1990s.
“It was not exactly fun,” Trump wrote. “Believe me, it is not cool to be Donald Trump when you owe billions of dollars.”
He recalled a bankers’ convention at the Waldorf Astoria hotel in New York City and feeling little desire to attend. When he decided at the last minute to make an appearance, he encountered a banker in charge of collecting loans whom he described as being especially “mean and nasty.”
“I was miserable,” Trump said.
But as the night wore on and the two men chatted, Trump said the conversation became enjoyable. At the end of the evening, the banker said to Trump, “You know what, Donald, you’re not a bad guy!”
To his delight, the banker extended an invitation to visit his office to work something out, Trump wrote.
“Monday morning I went to his office, and in five minutes, we had worked out a great deal,” he said.
Long-held view
Donald Trump's rise
Trump’s long-held view that debt, above all else, is a useful tool to strike deals and turn profits has clearly shaped his policy positions as president.
The first clear sign of this came last month, when to the surprise of his Republican colleagues on Capitol Hill, Trump abruptly announced a deal with Democratic leaders in part to raise the debt ceiling for three months. There was no discussion about spending cuts to offset the hike.
The sudden agreement caught even some of Trump’s top aides by surprise. It was particularly awkward for Trump’s director of the Office of Management and Budget, Mick Mulvaney, the former GOP congressman who had famously railed against clean debt hikes.
Pressed by reporters at the time on whether he would have voted for the bill if he were still in the House, Mulvaney repeatedly demurred.
And now, as he desperately looks to score a legislative victory before the end of the year, Trump is pledging “the largest tax cut in the history of our country” – again, without batting an eye at the reality that such steep cuts would grow the national debt.
Trump’s seeming lack of interest in trying to keep the deficit in check has exasperated – and alarmed – some conservatives.
Kori Schake, a fellow at the Hoover Institution who has worked at the National Security Council and the Defense Department, said this week that “the most alarming thing to me about the Trump administration” is its argument that “debt shouldn’t matter at all and that economic growth is going to take care of this problem.”
Tennessee Republican Sen. Bob Corker has also made clear his displeasure.
“I’m very concerned, as everyone knows, and have been for ten years and nine months since I’ve been here about our deficits,” Corker, who recently announced he would retire at the end of his current term, told CNN this week. “I want to make sure that it’s not something that increases deficits.”
Still, the most outspoken fiscal hawks on Capitol Hill appear unlikely to get support from the President on ensuring that spending cuts are included in a tax reform plan.
Former Republican Oklahoma Gov. Frank Keating said GOP lawmakers might be better off simply accepting that the President is untethered to many traditionally conservative ideological bearings.
“He’s not a traditional politician and he’s not a Republican in any historic sense. So Republicans are going to have to realize that,” Keating said of Trump. “I think some of the purists on the Republican side don’t understand that yet.”