In 1985, Donald Trump bought West Side Yards*, a huge real-estate parcel on the West Side of Manhattan. (Actually, it was his second try at the property, which he’d failed to develop in the 1970s.) Trump paid $115 million to buy the parcel, with huge plans to create a sparkling center on one of the few remaining undeveloped parts of the island.
It didn’t work. Trump quarreled with Mayor Ed Koch, failed to start the work, and steadily lost tens of millions of dollars. In 1989, he declined an offer to sell the land for a more than $400 million profit. Five years later, he finally threw in the towel, selling it for just $82 million—and on condition that the buyer take on a quarter of a billion in debt. But Trump was right about the commercial potential of West Side Yards. The developers who bought the land from him sold it for $1.8 billion in 2005, the largest residential real-estate deal in New York history. A sparkling new neighborhood is finally rising on the site.
The point of this story is not that Trump blew the deal of a lifetime, though he did. The point is that from Trump’s perspective, who cares? Yes, he could have been richer; but he’s still extremely rich, his reputation as a business mogul remained unscathed outside of actual business circles; and, as he put it to Time this week, “I’m president, and you’re not.” Trump’s bounce back from the West Side Yards fiasco seems to be a useful key for understanding Trump’s approach to negotiations over repealing and replacing Obamacare.
The president’s approach has even experienced Trump watchers nursing a case of whiplash. One week ago Friday, the president was meeting with conservative skeptics of the Republican leadership health-care plan and declaring, “I am 100 percent behind this.” Speaker Paul Ryan’s communications director was lauding Trump as “the ultimate closer.”
Then things fell apart. With resistance to the bill coming from both the moderate and conservative wings of the House Republican caucus, GOP leadership canceled a vote scheduled for Thursday afternoon. Trump was at an event when it happened; he told a reporter he had to go lobby for votes, only to be told that the vote had been canceled, with plans to hold it on Friday instead. The president issued an ultimatum: Negotiations were over, and it was time to get in line behind the bill.
The leaks started to come quickly. The New York Times’ dynamic duo of Glenn Thrush and Maggie Haberman reported that Trump was privately regretful of the decision to move forward on Obamacare repeal first, and did not like the deal that was emerging. His ultimatum was designed to bring the matter to a quick conclusion—favorable or not. New York reported that though Bannon was publicly supportive, he was eager to kill the bill behind the scenes. Breitbart, the palace organ of the Trump administration, promptly aggregated the New York story.
By Friday morning, it was clear that the White House—or at least some influential members of the White House—wanted the bill to go down:
senior WH aide, asked if decisive health care defeat today is best for Team Trump: "100%"— John Harwood (@JohnJHarwood) March 24, 2017
Bloomberg reported on the increasingly apparent strategy: Let the bill fail, then blame Speaker Paul Ryan for the scheduling and design. (Trump even magnanimously declared that Ryan should remain speaker if the bill failed—thus opening up for discussion the question of whether Ryan should remain. Bannon and an aide, Julia Hahn, reportedly detest Ryan.) How else to explain Trump threatening the House Freedom Caucus, nexus of the conservative votes he desperately needed, in a Friday morning tweet?
The irony is that the Freedom Caucus, which is very pro-life and against Planned Parenthood, allows P.P. to continue if they stop this plan!— Donald J. Trump (@realDonaldTrump) March 24, 2017
This also explained why the White House was demanding that a vote be held on Friday, whether or not Ryan and his team had the votes to pass it out.
Trump seems to regard a defeat in health-care fight the way he did the West Side Yards fiasco: An unfortunate occurrence on a potential crown jewel, but also a loss to be shrugged off and forgotten in the pursuit of bigger and better things. But this approach would only seem promising to someone who spent his career in the business world and didn’t really have a strong understanding of Republican Party politics around health care.
One problem with letting the bill die—especially if Republicans then simply move on to other matters, rather than trying a new approach—is that it would represent a brazen betrayal of the Republican Party’s biggest single promise to its voters over the last seven years. Republicans took first the House, in 2010, and steadily the Senate and now the White House while telling voters they would repeal Obamacare.
Trump was especially well-suited to make this promise on the campaign trail for a few reasons. First, he had no real ideological attachments to any health policy, so he could rail against the bill without any bounds of nuance or realism. He could blithely promise voters he’d repeal the hated ACA while also keeping everything they liked about it and even expanding coverage. The GOP House voted for repeal dozens of times, secure in the knowledge that the plans they were voting on, which would have been politically toxic, would never pass.
Even if the bill fails on Friday, Trump and Ryan could try a second time. But the White House is indicating the president has no interest in that, and with each day that goes by it’s harder to repeal—both because of timelines specific to the budget, but also because of other looming urgent issues like passing a spending bill. That doesn’t even get to the problem of trying to push whatever the House would pass through the Senate.
Perhaps Trump can survive a defeat of the repeal package politically—after all, he’s not on the ballot again until 2020—but giving up will be catastrophic for some Republicans, who have staked their careers on repeal. This is one reason the House Freedom Caucus has been so adamantly opposed to the current package: They don’t see it as true repeal. So by admitting defeat, Trump is endangering his party’s edge on the Hill.
A second problem is that a defeat now will make it much harder for Trump to pass the rest of his agenda. He wants to move on quickly to other priorities like tax reform, but that could go even worse. Republicans were at least all in agreement about whether or not to repeal Obamacare. Tax reform is perhaps even more complicated. And Trump would head into that debate much weaker. He will no longer have the goodwill and political capital a president receives to begin his term. Ryan would be weakened within Congress by the health-care defeat, especially if Trump moves to pin the whole collapse on him. Ryan’s relationship with the White House will be more strained. And each week seems to produce a worse approval rating and deeper scandals for Trump.
Meanwhile, the House Freedom Caucus, having seen its clout on health care in action, would be emboldened to fight against any proposal it doesn’t find entirely ideal. Other Republicans, having seen the HFC’s success, and the lack of repercussions for other members who bucked Ryan, would see little reason to stay in line. Trump’s aides are speaking darkly about keeping a list of defectors to punish them, but his leverage on them is steadily diminishing.
The least tangible, but perhaps most stinging, damage would be to Trump’s reputation as a dealmaker. No matter how he was regarded in the business world, many Americans viewed his name as synonymous with the word “deal.” But on Obamacare repeal, Trump has tried every tactic: Persuasion, arm-twisting, threats. None of them has gotten the GOP caucus to yes.
With his final moves on Friday, Trump attempted to use one last dealmaker’s tool: walking away. That can work in the business world, where both sides have incentives to reach an agreement, and the only thing to be lost is money. But politics, and especially this bill, are different. There’s little incentive for conservatives to back a bill that doesn’t meet their principles, and little incentive for moderates to back a paring back of benefits their constituents will hate.
And if the repeal plan does fail, Trump is likely to discover that recovering his reputation as the “ultimate closer” is even tougher. It could make recovering from West Side Yards look like a cakewalk.
* This article originally referred to West Side Yards as Hudson Yards. We regret the error.