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Trumponomics Daily—Wednesday, March 1

Over the course of an hour on Tuesday night, before a packed House chamber and a televised audience of millions, Donald Trump executed a performance worthy of his new office. Depending on where you sit, that’s either saying a lot or not nearly enough. The president is earning glowing reviews for his disciplined delivery of a speech that offered uplift instead of gloom — and his address to a joint session of Congress indeed could yield a polling bump that buys him some breathing room and soothes jangled nerves among Congressional Republicans. Yet his audience in the room also showed up eager to hear some specifics about where the administration stands on internal fights hobbling the GOP’s push to replace Obamacare and overhaul the tax code, among others. On that score, Trump gave few new clues about how he’d like his party to proceed.

Most pressingly, Republicans remain at odds with each other over how to go about repealing Obama’s health law and what should take its place. Conservative hardliners are threatening to bring down the House GOP leadership’s preferred approach, which includes tax credits for Americans to buy health coverage on the private market. The rump group pans that proposal as a new unfunded entitlement, and though Trump appeared to endorse the leadership’s solution in his speech, conservatives are already saying they heard no such thing.

The party needs to resolve its healthcare debate before turning to a tax code rewrite, and there, too, major intraparty rifts await. Trump in his speech seemed to suggest he’d back a House Republican plan to impose a tax on imported goods. That measure, the so-called border adjustment tax, is a lynchpin of Speaker Paul Ryan’s approach, raising an estimated $1 trillion in new revenue to fund rate reductions, but Senate Republicans object. The president invoked Harley Davidson executives who’d complained to him about the foreign levies they face on their exports — precisely the example Ryan used in his reelection bid last year to make the case for a field-leveling import tax. The motorcycle maker hasn’t pressed for a policy fix, Trump said, “but I am.” House Republicans erupted in applause, yet Trump never explicitly mentioned a border tax, an issue on which he’s taken a revolving set of positions. Instead, he immediately shifted the subject to trade (“I believe strongly in free trade but it also has to be fair trade,”) leaving plenty of room for interpretation that he’d address exporters’ concerns through tariffs.

There was more confusion than clarity following his speech on other key issues, as well. Trump floated to network anchors gathered at the White House earlier Tuesday that he’d like to forge an immigration compromise to bring millions of people in the country illegally out of the shadows. No such call made it into the address, which instead repeated his intent to build a border wall, boasted of stepped-up deportations, and announced the creation of a Homeland Security office to document crimes committed by illegal immigrants. On repairing the nation’s crumbling infrastructure, a key campaign pledge, Trump said he’ll be asking Congress to approve a bill “that produces a $1 trillion investment… financed through both public and private capital.” Trump on the trail called for $550 billion in direct federal spending on public works. On Tuesday, however, he appeared to be channeling his new Commerce Secretary, Wilbur Ross, and his trade czar, Peter Navarro, who cowrote a plan for dedicating roughly a third of that sum to tax credits for companies that invest in infrastructure projects.

It may be the White House believed the president’s most urgent priority in his first primetime address was to regain his footing after a rocky rollout. They may be right. But Trump’s Congressional regulars still need marching orders.

Tory Newmyer
@torynewmyer
tory_newmyer@fortune.com

Must Reads

The Next Dilemma of the Republican Tax Overhaul [WSJ]

House Republicans are struggling with how their tax reform proposal should deal with businesses that file on the individual side of the code.

President Trump Said 94 Million Americans Are ‘Out of the Labor Force.’ That’s Misleading [Fortune]

The president suggested roughly 30% of Americans are out of work. But only a fraction of them are actually looking for work, the population that the Bureau of Labor Statistics uses to calculate the unemployment rate.

President Trump Again Called for $1 Trillion on Infrastructure — Without Many Details [Fortune]

The president pledged to create $1 trillion in infrastructure investment financed through “both public and private capital,” an apparent nod to his new Commerce Secretary Wilbur Ross’s proposal to try to leverage tax credits to compel private businesses to tackle public works projects.

Trump Lays Out His Stance on Obamacare in His First Address to Congress [Fortune]

Without getting into details, Trump appeared to endorse the an Obamacare replacement proposal by House Republican leaders that’s touched off a rebellion among conservative hardliners in recent days.

Number of the day

$60 million

The bidding for a pair of memoirs from Barack and Michelle Obama reportedly crossed this threshold, a record for presidential books. The former president and first lady are writing separate books but sold the rights to them jointly to Penguin Random House, and the final terms of their agreement haven’t been disclosed yet. By comparison, George W. Bush made an estimated $10 million for his memoirs, and Bill Clinton earned $15 million for his.

Loose change

J.P. Morgan Chase’s Jamie Dimon Says Corporate Tax Reform Will Benefit Workers the Most [Fortune]

Icahn’s $126 Million Gain on Biofuel Deal Prompts Criticism [Bloomberg]

Commentary: The U.S. Isn’t the Superpower Trump Thinks it Is [Fortune]

Intel Says It Has Achieved 100% Equal Pay for All Women and Underrepresented Minorities [Fortune]

How the Secret Service Protects the President Against New Cyber Threats [Fortune]