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Why Did Trump Fail To Pass His Health Reforms?

27/03/2017 08:42 BST | Updated 27/03/2017 08:42 BST
Bastiaan Slabbers via Getty Images

This week, Donald Trump's reputation as a dealmaker was in tatters as his signature healthcare reform to repeal and replace Obamacare went horribly wrong.

After threatening to put the proposal to a vote, Trump was forced, alongside his Speaker Paul Ryan, to pull the vote indefinitely as it became increasingly clear that the legislation would not pass the House. The beauty of checks and balances was in full display against the executive.

That's a big deal - given the Republican Party, which Trump and Ryan are leaders of, have a majority in the House of Congress. That should normally mean easy legislative passage compared to the later Obama era. Instead, it shined a bright spotlight on how rank and file republican lawmakers are not agreeing with the leadership and triggering the same legislative deadlock that Trump has been railing about in the campaign trail.

This problem risks creeping way beyond health care reform to the rest of his legislative agenda, such as tax reform and building that ridiculous wall.

President Trump is probably sitting in the Oval Office seething. What went wrong? Leaving aside the technical details, such as the loss of medical insurance coverage for 25 million people - scaring the moderates, or in the other extreme, not cutting costs enough for the diehards, this legislative exercise, like all major decisions, is about behaviour. President Trump is beginning to see that running a company is quite different to passing laws.

Why is that? Is it the structures, the timelines or having different people? Possibly, but the biggest driver is simple: motivation.

No matter how complicated a business, the bottom line - is the bottom line. You can pretty much persuade anybody, especially in the US, by lining up the appropriate incentives to the regulators, suppliers, and labour through the medium of money. Local councillors might get more tax and jobs, suppliers and investors get contracts and returns, easy.

Managers in Trump's companies have clear KPI's, i.e. make more profits to maximise shareholder value. Period. The American dream is based on this and they are very good at it. That gives the CEO a lot of power because everyone's goals are aligned and motivated.

Not so in the bear pit of Congress. For one, Trump isn't dealing with local policy makers, each Congressman has a much more complex constituency to play with. More importantly, Trump cannot directly hire or fire them, unlike his executives; so his lawmakers do not have the same incentives. It's not just about money anymore, so the bottom line is no longer the bottom line. Politicians have their own ambitions, positional manoeuvrings with re-election every two years, making policymaking complex. For example, moderates' main motivation might be to resist an unpopular President to get more votes from democrats, while hardliners might want to stop anything that looks soft so they can always blame somebody else during the electoral stump, ironically straight from the Trump playbook, presenting a much simpler and effective tactic than compromising in an era of partisan politics. That assumes every lawmaker is pragmatic, we haven't even discussed deep religious and ideological beliefs yet.

Trump has found himself in a position where he failed to form a big coalition in the House, something Obama can only relate too well. This highlights as much the broken US political system as Trump's policymaking. Obama will probably smile on this occasion, knowing the very system that slowed his progress is now protecting Obamacare.

Expect more deadlocks to come.