Updated March 19, 2017 1:51 p.m. ET
WASHINGTON—Since President Donald Trump’s election, equity and bond markets have been on the rise, business leaders are applauding his call for tax cuts, and consumer confidence in the U.S. economy is up.
But halfway through his crucial first 100 days in office, it has been tough going for the new president’s agenda that inspired much of that optimism.
Republican infighting is bogging down a health-care bill and the litany of legislative issues lined up behind it, including an overhaul of the tax code. A series of court rulings are stalling his immigration policy changes. And his own tweets and White House comments are broadening several probes into whether Russia tried to influence the outcome of last year’s presidential election on behalf of the
Political and financial analysts said there remains time to iron out differences over health insurance and pass an overhaul of the tax code, and the steadfast promises from Republican leaders to do just that is helping to keep markets propped up, they said.
Still, the candidate who consistently thrived on the kind of controversies that would have sunk almost any other campaign has become a president unable, so far, to escape them. Even his campaign-related comments about instituting a “Muslim ban” on travel are coming back to haunt him as judges cite them as reason to rule against a temporary stay on immigrants from six nations that never mentions the religion.
The fits and starts of the administration’s first two months are making it harder for the White House to build momentum toward action on its more ambitious agenda items and risks squandering any early political capital. That will be on display this week, when Mr. Trump’s Supreme Court nominee is likely to be advanced in the Senate just as a House intelligence committee holds a hearing that will highlight the president’s widely discredited accusation that President Barack Obama wiretapped his campaign offices last year.
The administration’s failure to keep a sharp focus on legislative issues, including its inability so far to produce a tax-overhaul package, has created a vacuum for other “extraneous issues,” said Roger Stone, a longtime Trump associate.
“As president you have the ability to dominate the dialogue, and the president needs to do that,” Mr. Stone said. “The way you do that is with initiatives. They began in a very strong way in this regard and, yes, I think they need to step it up.”
Mr. Stone said the president has done little to turn off his white, working-class base, including the decision to prioritize the travel ban over rewriting the tax code. And the administration has fulfilled some early campaign promises, including the president’s move to withdraw the nation from the Trans Pacific Partnership trade deal and his temporary ban on new regulations.
The White House said its priorities are on track.
“The agenda has hardly slowed,” press secretary Sean Spicer said in a statement. “We have moved [health law] repeal and replace legislation through three committees already and the full House will take it up this week. We are following the legislative schedule we laid out.”
But Mr. Trump’s agenda, which is stirring an intense backlash from liberal-allied groups, is running up against a legislative process and being backed by a team more accustomed to playing defense than offense. Roughly 70% of the GOP House caucus has never served under a Republican president.
“The machinery of governing isn’t prepared for quick action given the years of atrophy,” said Isaac Boltansky, an analyst at Compass Point Research & Trading, a boutique investment bank. “There’s a fair amount of rust on the machine.”
Mr. Trump’s first major priority—replacing the Affordable Care Act with a new health system—is on a bumpy path. His budget blueprint was declared dead on arrival by South Carolina Sen. Lindsey Graham and other fellow Republicans, in part because it would eliminate funding for after-school programs for children and reduce it for food-delivery services for senior citizens.
Progress on a major tax bill has also dragged, stuck in the legislative queue behind health care and weighed down by disputes among fellow Republicans. Treasury Secretary Steven Mnuchin has said the administration’s goal is to get a tax plan signed into law by the August congressional recess. Friday, Rep. Kevin Brady (R., Texas) said his goal is to get a tax overhaul out of his Ways and Means Committee before the summer. Even if it gets out of the House, Mr. Brady’s tax plan already faces significant opposition from GOP senators.
The tax plan, and a promise for a corporate tax cut in particular, is the most important legislative influence on markets, said Alec Phillips, a Goldman Sachs political economist.
“The gyrations of the health-care debate may not be that important in terms of the eventual outcome of tax reform,” Mr. Phillips said. “With that said, in my view it is a reminder of how hard it will be to get a deal on really ambitious changes.”
On financial regulation, Mr. Trump has taken mostly symbolic actions so far, promising to review many rules. But that move alone has won him praise from some in the business community. On March 9, he scored with small-town bankers when he hosted a group of them at the White House.
“He was able to speak the language of business with CEOs at the table,” Camden Fine, president of the Independent Community Bankers of America trade group, said after the meeting. “It was really the most refreshing White House meeting I’ve ever been in.”
Meanwhile Mr. Trump’s Treasury Department, which had operated for weeks with a skeleton staff, has started to take shape.
He nominated a half-dozen officials for top jobs there on Tuesday, though the nominees can’t start work until confirmed by the Senate, and he hasn’t picked a top tax-policy adviser. Mr. Mnuchin also named four senior counselors on March 10 to work on budget, tax, regulatory and other economic issues.
Mr. Trump has also made strides toward rounding out his financial regulatory team. He nominated a top commodities regulator Tuesday, and this week the Senate Banking Committee will hold a hearing on his choice to lead the Securities and Exchange Commission. But the key job of vice chair of bank oversight at the Federal Reserve remains unfilled, and one leading candidate dropped out on March 8.
Nearly 90% of the 553 positions in the Trump administration requiring Senate confirmation haven’t been appointed, according to a count from the Partnership for Public Service and the Washington Post.
Monday, the Senate’s judiciary committee will start hearings for Mr. Trump’s Supreme Court nominee, Judge Neil Gorsuch, and a quick confirmation of the pick could build some needed momentum for the Trump administration on the Hill. But that same day, the House intelligence committee opens hearings on Russia’s involvement in the presidential election, where Federal Bureau of Investigation Director James Comey will speak publicly for the first time about Mr. Trump’s allegations that he was wiretapped by the previous administration.
Rep. Mike Simpson (R., Idaho) said Mr. Trump’s willingness to repeat unsubstantiated assertions is diminishing his credibility with Americans. In the event of a global crisis, he questioned whether he would have the trust of country and its allies abroad.
“What I’m worried about, at some point in time of every administration, the president has to rally the troops—meaning the American people—and sometimes our allies,” Mr. Simpson said. “If…they’re all saying, ‘Eh, do you really trust what he’s saying?’ that’s a challenge.”
—Ryan Tracy and Richard Rubin contributed to this article.
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