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What Happens When Trump’s Populism Collides with Ryan’s Austerity?

A battle over infrastructure could be the start of a big, bloody, intraparty war.

Zach Gibson/Getty Images

Stephen Bannon, the alt-right guru and racist provocateur who will serve as Donald Trump’s chief strategist in the White House, doesn’t talk like a normal Republican—even when he’s off Breitbart duty. When outlining his dreams for a Trump presidency, he sometimes sounds remarkably like a Bernie Sanders populist eager for a return to the big-government heyday of the 1930s. 

“The conservatives are going to go crazy,” Bannon told The Hollywood Reporter last week. “I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Shipyards, iron works, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution—conservatives, plus populists, in an economic nationalist movement.”

In his exuberance, Bannon gives away the problem that Trump will face with his economic nationalist agenda, which along with infrastructure includes a newly protectionist trade regime and an immigration crackdown. Note how, after Bannon says, accurately, that “the conservatives will go crazy,” he says within a few seconds that his coalition consists of “conservatives, plus populists.” 

Both statements are true—conservative Republicans are likely to bristle at the idea of a trillion-dollar infrastructure spending, not to mention any push for protectionism. And Chamber of Commerce-style conservatives won’t like losing cheap immigrant labor, either, no matter how much they theoretically support strict borders. Populists? They’ll be gung-ho for the right kind of job-creating plan. 

Welcome to the immediate future of the Republican Party: a tug-of-war between Bannon and Trump’s populism and conservative Republican austerity politics. The push-and-pull will undoubtedly put a strain on the volatile coalition that Trump assembled in November. He won by bringing together two factions: one, an expanded share of the white working class (attracted in part to the message of economic populism), many of whom had voted for Obama; two, a consolidation of the traditional Republican base—which skews higher on the economic ladder, and cares more about tax cuts than economic populism. You see the problem. 

The embodiment of the thorny obstacles Trump and Bannon are going to face is Speaker of the House Paul Ryan. If Bannon’s economic nationalism represents the populist wing of the GOP, then Ryan is the quintessential anti-populist. 

Ryan rejects Trump’s agenda on trade, on immigration, and, not least, on infrastructure. In September, a reporter asked Ryan about Trump’s proposal to spend $550 billion on infrastructure (a more modest version of Bannon’s trillion-dollar fantasy). In The Atlantic, Russell Berman writes that Ryan “laughed loudly and slapped his hand on the arm rest of his chair,” saying, “that’s not in the ‘Better Way’ agenda.” (The Better Way is Ryan’s famous six-point austerity and privatization plan for America’s future).

The battle over infrastructure could set the tone for the next four years of intraparty Republican warfare. It will likely come early in Trump’s term: He indicated in his victory speech on election night that his first big priority is infrastructure, saying: “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals.” Aside from the Senate picking bones with some of his cabinet appointments, this may be the first big clash pitting Trump and Bannon against Ryan and Senate Majority Leader McConnell. 

A showdown on infrastructure would also, of course, pit Republican populists against conservatives in Congress. And it would pit both sides of Trump’s 2016 coalition against one another. At the very least, this would give us an early foretaste of which force may prove stronger in the GOP—the new economic nationalism of Trump and Bannon, or Ryan’s austerity-for-all-but-the-wealthy brand of conservatism. And it’ll show how politically thorny it will be for the Trump forces to find politically acceptable compromises with the conservatives, to get even reduced versions of their grand dreams passed. 

Trump loves to play the role of horse-trader (as you may have heard), so the battle over infrastructure would seem to open up golden opportunities for some wheeling and dealing with the small-government crowd and the Democrats alike. Trump hinted that he’s game for it in this week’s New York Times interview: “Paul Ryan, right now, loves me,” Trump said. “I’ve liked Chuck Schumer for a long time.” 

Trump’s problem is that any sort of deal risks alienating one faction of his supporters—if not both. Consider what making a deal with Ryan might entail. Paul is committed to an anti-populist agenda focused on cuts to Medicaid and Food Stamps (for now!), along with privatizing Medicare and Social Security. His goal is not to “rebuild everything,” in Steve Bannon’s words; it’s to shrink everything, when it comes to government services, regulation, and taxes. And Ryan has already promised more military spending—as has Trump. 

That will leave very little in the barren coffers of the federal government for New Deal-style infrastructure spending and other high-dollar adventures. It’s true, of course, that deficit-spending is always more tolerable to Republicans when they control the presidency. But while the congressional wallet may loosen up a bit, Ryan still runs the place, and he has a considerably lower tolerance threshold for red ink than Donald Trump, the self-proclaimed “King of debt.” 

It’s possible to imagine Trump making a deal with Ryan for more infrastructure spending in exchange for the cuts Paul wants. Such a deal might make sense on paper, but could be politically toxic with some of Trump’s white working-class supporters. Meanwhile, fiscal conservatives will be less than thrilled in the first place over any infrastructure package. 

Trump’s other option would be to go the Chuck Schumer route and negotiate with the Democrats—many of whom are eager to pass something they can get behind. The problem with this option is that the actual infrastructure policy that Trump is advocating would be heavy privatized. As Brad Palmer notes in Vox, the for-profit approach is likely to be woefully inadequate: “If high user fees or tolls are needed to help private investors recoup their investments, then a lot of infrastructure in America may simply never get funded. Think of existing toll-free roads in poor shape, or urban bus systems, or aging water pipes in low-income cities like Flint where people can’t afford a big hike in their water bills. Many of these projects may be worthwhile, but they typically require public funding.” 

Trump’s scheme is geared toward winning over reluctant fiscal conservative—but that makes it unlikely to win over Democratic populists like Bernie Sanders, who tweeted yesterday, “Trump’s plan to repair our infrastructure is a scam that gives massive tax breaks to large companies & billionaires.”  

Indeed, from the point of view of economic nationalism—whether Bannon’s version or Sanders’s—the existing plan makes no sense. The tax credit that goes to big business is likely to help out projects that are already profitable in well-to-do regions of the country and do little for the rural poor, who came out for Trump in droves.

But if, for the sake of argument, Trump revised his infrastructure plan to make it the big-spending bonanza that Sanders and other Democrats might rally behind, he’d run into the formidable obstruction powers of Ryan and McConnell. President Trump would also rile up the other side of his own coalition, since a robust infrastructure plan—one that involved putting actual government dollars to work and raising a huge debt rather than massaging the incentive structure for big business—would alienate a lot of mainstream conservatives. 

Those Republican voters weren’t the newbies who supported Trump on the understanding that he was, despite his wild talk, fundamentally a traditional Republican, an orange Jeb Bush. These old-school conservatives might have held their noses while voting for Trump, but they did so with the assumption that he’d work with Ryan, make sure the tax cuts are in place and the fiscal house in order. These folks will feel betrayed—if not downright mystified—by a Republican president who embraces Bernie Sanders-style policies.

Trump and Bannon are hoping to triangulate their way into a new political world, but it’s worth recalling that the most recent ace practitioner of triangulation in the White House, Bill Clinton, adopted the policy after the opposing party took over Congress in 1994. How does triangulation work if the president’s own (putative) party controls the House and Senate? 

The Republican Party is united in name only. In truth, there’s now a Bannon party and a Ryan party. Infrastructure will be an early test of their relative strength—and, quite possibly, of just how complicated and ugly it’s going to get.