FOX Business host Larry Kudlow discusses Republican unity on the cusp of 2025 on ‘Kudlow’.
Trump needs a big, beautiful coalition to pass his big, beautiful reconciliation bill, and that’s a bone of contention.
There are a number of important reasons why President Trump is holding fast to a big, beautiful bill in his meeting with Republican senators tonight, but one almost overlooked reason is the diversity of Republicans in the House of Representatives, where really any significant bill requires a coalition. Here’s speaker Mike Johnson talking about it today:
MIKE JOHNSON: “I think it makes the most sense in terms of what we need to accomplish. The House is a very diverse conference. The House Republican Conference is broad and has over 200 people with a lot of different opinions and dynamics in their home districts and so, you’re going to take that into and we will, so if you put all the measures in one package, it will greatly increase the likelihood that we will achieve all of our goals focused on a single account strategy.”
TENS OF THOUSANDS OF AMAZON WORKERS RETURN TO PERSONAL WORK IN WASHINGTON
Sen. Mike Crapo, R-Idaho, unpacks the tax bill and tariff proposal under President-elect Donald Trump on ‘Kudlow.’
I can think of at least four key groups whose votes will be needed to pass President Trump’s agenda. There is one group that advocates growth and reductions in taxes on the supply side. Others are those who want enough funds to close the border. The third are those who will insist on budget-cutting compensations for PAYGO to balance everything spending increases, and the fourth are heavy-duty defensive hawks.
I’m personally in favor of all four, but not all of them are at the House GOP conference. What Chairman Mike Johnson is saying is that a single bill strategy is the only way to bring all these different interests together. It’s important to note that PAYGO budget cutters will play a key role in any discussion – whether it’s this one bill or the next 10, and they’re right. There was only flagrant disregard for budget overspending — in both political parties. This one-party deficit and the wealth of debt must cease.
Still, delaying the tax cuts will delay the workers’ boom. Delaying tax cuts will disappoint President Trump’s new working-class Republican coalition. Delaying the tax cuts will delay the next real boom in the middle class – which will hurt Republicans in the 2026 midterm elections. Most of the tax cut business is just an extension of Mr. Trump’s first term tax cuts. There is nothing terribly complicated about it.
Trump’s plan for a 15 percent corporate tax rate, along with tax-free cash tips and overtime pay, are important measures of economic growth, but there’s nothing wrong with them either. Plus, this Trump mix of supply-side policies — tax cuts, deregulation, and more energy production — will finally end Bidenflation. Meanwhile, the House has already passed HR1 on energy reform and HR2 on border closures.
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As for various trinkets, if some of our Republican friends want to double the SALT deduction, well — that’s small beer. Just give it to them.
Finally, contrary to some false media reports, Mr. Trump is eyeing a broad universal tariff, which could pay for a lot of tax cuts — and then some. The US imports about $5 trillion a year, and 10% of that is $500 billion. This buys many tax cuts — as well as other priorities. In addition to the need for coalition thinking, people should think about the tariff potential to fund these tax cuts. Believe me, that is never on President Trump’s mind. It’s a riff.
This article is adapted from Larry Kudlow’s introductory commentary on the January 8, 2025 edition of “Kudlow”.
