Next week is tax-reform week. If you’re not familiar with the White
House’s branded weeks, previous Trump policies that received their own
weeks have included infrastructure, workforce development, and energy.
The branded weeks have become a popular joke on social media because
they inevitably get overwhelmed by news events, such as developments in
the Russia investigation, or, more often, by President Donald Trump himself, who is famously unable to maintain a focus on a single issue,
especially one as unexciting to him and his hardcore supporters as tax
policy.

At his speech earlier this week in Phoenix, Arizona—the one that led James Clapper, the former director of National Intelligence, to question
Trump’s fitness for office and worry about his control of America’s nuclear arsenal—Trump talked about pardoning Joe Arpaio, the former
sheriff of Maricopa County, who was recently convicted of criminal
contempt for defying an order to stop racially profiling Latinos;
mentioned his desire to end the Senate filibuster; and belittled
Arizona’s two Republican senators before he ever mentioned tax reform,
which ostensibly is the Republican Party’s most cherished legislative
goal for the remainder of the year.

Instead, Trump highlighted another legislative goal he had for the fall:
the construction of a wall on the southern border. “Believe me, if we
have to close down our government, we’re building that wall,” he said.

In previous years, there have often been voices in the Republican
Party, especially in the House Freedom Caucus, that would cheer a
Republican willing to threaten a government shutdown over a
conservative-policy concession. But, in Congress, there is nearly
universal agreement among Republicans that they need to avoid a
government shutdown at all costs. “I don’t think a government shutdown
is necessary, and I don’t think most people want to see a government
shutdown, ourselves included,” Paul Ryan, the Speaker of the House, said, earlier this week, in Oregon.

“Nobody wants a shutdown,” Charlie Dent, the leader of the Republican
moderates in the House, said. “The President made that comment, and to
me it makes absolutely no sense. A shutdown would be in no one’s
interest. And I think it would just be an act of self-destruction and
political malpractice.

Republicans like Ryan and Dent have never been interested in playing
chicken with government-funding deadlines, so their comments aren’t too
surprising. But even the Freedom Caucus was taken aback by Trump’s
threat. A Freedom Caucus source, half-joking about how the President had
staked out a position more extreme than the famously disruptive group of
some forty Republicans, said, “He stepped out ahead of us on that one.
We aren’t quite there.”

But Jim Jordan, a founding member of the group, noted that if a shutdown
occurred it would be the fault of Democrats who refused to support
funding for the wall. “The border-security wall was a central theme that
everyone knew was a central theme and was presented to the American
people, and they voted accordingly. So it has to get done, and, as
members of the Freedom Caucus, we’re committed to it,” he told me.
Though, when I pressed him on the prospect of backing up Trump’s shutdown
threat, he said, “I am willing to go to the mat to get done what the
American people elected us to do.”

Trump’s promises and threats are often hollow. He may never bring up the
threat of a shutdown again. But it is the second time he has made the
specific threat of shutting the government down this fall unless
Congress funds a border wall. (Never mind that he has repeatedly
promised that Mexico would pay for the wall.) In April, during the last
round of government-funding negotiations, Trump fumed when Congress
ignored his request for wall money. “Our country needs a good ‘shutdown’
in September to fix mess!” he tweeted.
He actually seems committed to this threat. If he remains committed to
it, he may be setting up the fall legislative battles as a choice
between funding the border wall or passing tax reform.

Republican leaders see the annual appropriations process, and the
related need to raise the debt ceiling, as giant boulders in the path of
tax reform. Their plan is to navigate around them as quickly and
painlessly as possible while keeping the compass pointed toward tax cuts
on the other side. Trump has announced that he’d like to smash through
the boulders with as much drama as possible.

“Illegal immigration is significantly down,” a source close to Mitch
McConnell told me. “The President should pocket that, sell that as an
accomplishment that he’s responsible for as a result of his rhetoric and
his campaign pledges, and then move on to tax reform.” The source added, “He
seems to have a knack for focussing on the wrong thing at the wrong time.
And the highest priorities right now are the debt limit and funding the
government, which have to be done by September 30th, and then, more
long-term, tax reform. But, you know, making border-wall funding the
hill that you fight and die on is just not productive. It’s sort of
mystifying.”

Trump has never really been excited about the traditional Republican
agenda on tax reform. Anthony Scaramucci, the former White House
communications director, in an interview with me earlier this year—no,
not that one—noted that the Trump campaign had only a half-hearted commitment to tax
reform. “We were in a fourteen-alarm fire, so we weren’t even really
talking about taxes that much, you know what I mean?” Scaramucci said.
“We just had a simplistic tax policy. We were more worried about the
‘Access Hollywood’ tape than we were with what people were going to
think of our tax policy.”

A zero-sum fight in Congress between Trump’s border wall and Republican
tax cuts would nicely encapsulate the current divide in the Republican
Party, between the neo-populists, who want immigration restrictions,
protections for the parts of the welfare state that benefit Trump’s core
voters, and are at least open to higher taxes on the wealthy; and the
neo-libertarians, who are guided by the business community’s interests
and want to cut government and taxes in all forms.

If Trump digs in on this demand, there are a few possible outcomes.
Congress could come up with a grand compromise that includes the money
and avoids a shutdown. In both the House and the Senate, Democratic
votes will be needed to pass a funding bill and a debt-ceiling increase.
Senate Democrats have already said that they will not accept a deal that
includes funding for a wall. “The wall is a nonstarter,” a senior
Democratic Senate aide said. So any compromise would have to acquiesce
to some major Democratic priorities for them to move off that position.

The second possibility, and the one that was most cited by everyone I
talked to this week, is that the House includes money for Trump’s wall,
the Senate then strips it out, and Trump, as he did in April, reluctantly
signs the legislation, and Republicans move onto to tax reform.

But, if Trump follows through on his threat, vetoes the bill, and
precipitates a shutdown, the fallout could easily destroy any chances at
passing tax reform, which is already an extremely complicated endeavor.
Speaking to reporters Friday at the White House, Treasury Secretary
Steve Mnuchin said, “I can assure you that the President’s No. 1
objective is now to get tax reform done.” Next week, we’ll find out how
true that is.