National Economic Director Gary Cohn speaks at a news conference in which he discussed the tax reform plan of US President Donald J. Trump, in...
MICHAEL REYNOLDS

White House: On key provision, GOP listened to lobbyists, not Trump

As a presidential candidate, Donald Trump assured voters he was eager to get rid of the carried-interest loophole, because, as he put it, the “hedge fund guys are getting away with murder.” Even after the election, the White House said more than once that the president was committed to closing the loophole.

We now know, of course, that the Republican tax plan did not close the loophole. Gary Cohn, the chief economic adviser in Trump’s White House, told Axios yesterday that it’s Congress’ fault.

Axios co-founder Mike Allen asked Cohn what was the one change he would make to the tax reform bill. “We would have cut carried interest,” Cohn said Wednesday. “We probably tried 25 times.”

He blamed resistance on Capitol Hill. “We hit opposition in that big white building with the dome at the other end of Pennsylvania Avenue every time we tried,” he said in the interview. “It is just the reality of the political system.” […]

Cohn told Axios that the hedge fund and private equity lobby was too strong to overcome. “The reality of this town is that constituency [hedge funds and private equity] has a very large presence in the House and the Senate. They have really strong relationships on both sides of the aisle,” he said. “We just didn’t have the support on carried interest.”

Cohn went on to describe a conversation with Trump from earlier this week in which the president asked for an explanation as to why the loophole wasn’t taken out of his party’s plan.

Just so we’re all clear, there are overwhelming reasons to be skeptical about Cohn’s version of events. I personally don’t believe for a moment that the White House “tried 25 times” to close the carried-interest loophole and that the president personally demanded an explanation for the policy’s survival. This sounds like desperate spin to explain the latest broken Trump promise.

But just for kicks, let’s say Cohn’s correct. Let’s assume his story is 100% accurate and the process unfolded exactly the way he claims it did.

If so, according to a top official in the Republican White House, congressional Republicans ignored the wishes of a Republican president in order to cater to the demands of finance industry lobbyists.

In fact, according to Cohn’s impression of the process, Trump simply wasn’t as powerful as those representing the interests of hedge funds and private equity firms.

This didn’t cause much of a stir, but that strikes me as a pretty extraordinary thing for a White House official to say out loud, on the record, in public. Do GOP leaders on Capitol Hill have a response to the allegation that their conferences ignored their own party’s president in response to demands from finance industry lobbyists?

Does Trump have an explanation as to why those lobbyists proved to be stronger than him?

Financial Industry, Tax Policy and Tax Reform

White House: On key provision, GOP listened to lobbyists, not Trump