By Tory Newmyer
February 10, 2017

The mouth that delivered Donald Trump to the White House threatens to undo his early presidency. Trump saw the defining push of his opening days in office — the travel ban that’s touched off protests in major cities and challenges by an array of corporate interests — iced Thursday night by a three-judge panel on the Ninth Circuit Court of Appeals. Some strategic blunders by Trump’s team helped seal the defeat. But the court’s unanimous decision also relied in part on the argument by the Washington state attorney general that the ban violated the Constitution’s prohibition on religious discrimination. The judges cited “numerous statements by the President about his intent to implement a ‘Muslim ban’” as endangering the administration’s case. That is, despite the Trump White House’s insistence after the fact that the ban didn’t intend to contemplate the religion of those it would exclude, the president’s own prior public statements undermined the claim. It’s not clear yet what tack the administration will take next, but the case looks likely to land at the Supreme Court soon.

The damage wrought by the ongoing legal fight isn’t limited to Trump’s immigration policy. It spills over in ways both seen and unseen into the rest of his agenda, including the tax and regulatory overhauls pined for by Congressional Republicans and corporate interests alike. For one thing, there’s the way seemingly unrelated items on a president’s to-do list in fact form a daisy chain, with wins begetting wins, and losses begetting losses. Already, Trump’s opposition tastes blood. See, for example, the mess confronting Utah Rep. Jason Chaffetz Thursday night at a packed town hall event back in his district. The president has galvanized the left’s grassroots, and Republican lawmakers are feeling that heat where they live — a dynamic that will make dicey votes in Congress even more difficult as the year unfolds. (President Obama experienced his own version of this: Congressional Democrats started getting shouted down by rowdy town-hall crowds in early summer 2009 over their support for a cap-and-trade climate bill, and that popular anger then fueled the resistance to his healthcare reform push that ultimately helped Republicans recapture the House in the 2010 midterms.)

And then there’s the issue of bandwidth. With a still-skeletal staff in the administration, there’s only so much the actual humans populating Trump’s top ranks can focus on at any given time. The longer his team remains tangled in the legal and political fight over the executive order, the less energy they can devote to pursuing their common interests with the Hill GOP and the business community. Trump on Thursday promised to deliver a “phenomenal” tax reform plan within the next few weeks — an announcement that came with no details and appeared to surprise his own team. It’s possible that the economic brains he’s got on hand could begin that work (though he’s yet to name an assistant Treasury secretary for tax policy, among roughly two dozen other empty posts in that department). But the tax-writing committees in Congress will need to get through the work of repealing and replacing the Affordable Care Act before they can turn to the tax code, suggesting, under the rosiest scenario, a late-spring start.

Trump remains the president, but his credibility is perishable. The markets are already reflecting that nuance: Nordstrom stock barely flinched when he attacked the retailer Wednesday for dropping his daughter Ivanka’s clothing line. Yet on Thursday, the Bloomberg U.S. airline index jumped 2.5% after Trump pledged in a meeting with industry leaders to cut “burdensome regulations” and to invest in updating the nation’s air-traffic control system. The more he talks without delivering, the less key constituencies from the Hill to Wall Street to C-suites will listen.

Tory Newmyer
@torynewmyer
tory_newmyer@fortune.com

Must Reads

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Number of the day

$21.6 billion

The estimated cost of constructing President Trump’s Mexican border wall, according to an internal report by the Homeland Security Department obtained by Reuters. That puts the price tag for the project well above the $12 billion that Trump said it would cost on the campaign trail. The report estimates the wall — which in fact would be a series of walls and fences — would take more than three years to complete.


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