For all the initiatives and proposals in the relentless opening weeks of the second Trump administration, there has been little in the way of a legislative agenda. Across his expansive address to a joint session of Congress, President Trump boasted about an array of executive branch initiatives and proposals — but very little about legislation.
The limitations of this approach are becoming more visible. Mr. Trump’s seeming indifference toward Congress proved costly in his first term — and threatens to constrain his agenda once again. Without a compelling legislative agenda, the Trump administration risks an early slide into lame duck status.
The 2017 Tax Cuts and Jobs Act expires this year, and renewal will take up most of the bandwidth Congress has for at least the next several months. That leaves little time to pass other significant legislation before the 2026 midterm election campaigns begin. Democrats need to flip only a few seats to retake the House.
Although the tax bill can be passed along narrow partisan lines via reconciliation, the administration should also begin exploring proposals with some bipartisan appeal. Such legislation could expand upon, and put more resources behind, Mr. Trump’s executive orders — and it could expand his political coalition.
For instance, the administration’s immigration policies appear to have been effective at reducing illegal border crossings, and his “gold card” visa proposal suggests a desire to encourage highly skilled immigrants to come to the United States. But executive orders can easily be reversed by a future president, and they can go only so far.
While Republicans still hold both houses of Congress, the administration should push party leadership to finally match their campaign rhetoric with action on immigration. In addition to appropriating funds for border enforcement, reforms to immigration law could include clarifying the asylum process, requiring E-Verify for employers or redesigning the flawed H-1B system for skilled immigrants. If successful, such legislation would make the administration’s executive orders more effective and durable.
Another issue that offers low-hanging fruit is environmental permitting reform. A proposal with bipartisan support, the Manchin-Barrasso Energy Permitting Reform Act of 2024, passed the Senate Energy Committee during the Biden administration. A serious Republican permitting bill could attract significant Democratic votes and would be in line with administration priorities around “energy dominance” and reindustrialization.
The latter is the policy opportunity that is arguably most in need of ambitious legislation, and it offers significant opportunities for bipartisan collaboration. Strengthening the U.S. industrial base has both national security and macroeconomic implications, and the president has already issued multiple executive orders aimed at this goal.
In his speech to Congress, he announced a new White House office to support shipbuilding. He might have also mentioned the bipartisan SHIPS for America Act of 2024, a bill before Congress that could augment these efforts.
Another Trump executive order called for the creation of a U.S. sovereign wealth fund, an idea explored by the Biden administration. While it may be possible to create a fund without Congress, new legislative authorities would allow for greater resources and effectiveness. In fact, Vice President JD Vance, while a senator, had reportedly been working on a bipartisan proposal for a new federal investment vehicle to develop strategic industries.
Such a proposal — together with others focused on strengthening American industry — could form the basis of major bipartisan legislation under Mr. Trump and become a cornerstone of the administration’s economic agenda. Mr. Trump specifically criticized the CHIPS Act in his address as a failed government giveaway, suggesting that tariffs would be more effective. But imposing broad tariffs has already proven to be complicated, and on-again-off-again trade threats may not be enough to reorient entrenched supply chains and long-term investment patterns.
Improving upon the Biden era industrial policy bills may not require similarly large appropriations, but it will require better funding and procurement mechanisms — thus, new legislation. Tariffs are also more likely to be effective as part of a broader, long-term industrial strategy rather than merely as bargaining chips in constantly evolving negotiations.
On the tax bill, for now congressional Republicans seem to be zeroing in on major cuts to Medicaid to offset a portion of the cost of tax cuts, which has already rankled some populist and moderate Republicans and will provide campaign fodder for Democrats. Polling indicates that cutting taxes is not a high priority for voters, suggesting that the associated spending cuts — which were hardly a feature of the Trump campaign — will be unpopular.
The 2017 tax cuts were disappointing in their effects on business investment and overall growth; a renewal that mostly extends the status quo is even less likely to drive significant growth in the economy.
Assuming the White House is concerned about overall deficit levels — and it should be — then the administration needs to be willing to consider more revenue increases to offset its tax cuts. The White House has already proposed closing the carried-interest loophole, which allows Wall Street fund managers to pay lower tax rates.
Other options, aside from raising marginal rates, might involve shutting down offshore tax avoidance schemes that allow the largest multinational companies to shift taxable income to havens such as Ireland. Secretary of Commerce Howard Lutnick has put this proposal on the table, and ensuring that profits earned in the United States are taxed in the United States is certainly consistent with Mr. Trump’s America First message. In addition to the budgetary impact, requiring the “winners” of the U.S. economy to shoulder some of the deficit-reduction burden might make spending cuts slightly more palatable to voters.
The furious pace of executive orders and announcements seems to have served Mr. Trump well so far, but the strategy is beginning to show diminishing returns. The president now has an opportunity to refocus the discussion on longer-term policy projects.
Mr. Trump and his appointees tend to see the unelected bureaucrats of the “deep state” as their foremost opponents. But Congress — and its difficult-to-navigate mix of ideologues and interest groups — may be the most formidable obstacle to achieving any lasting realignments in both policy and politics.
Left to its own devices, the legislative branch is likely to be governed by inertia, and could send the second Trump administration down a similar trajectory as the first.
