Trump could easily make the same early mistake Obama made, and that puts a big promise at risk

Hindsight is 20/20. And using that view, many analysts have said that President Obama used too much political capital passing Obamacare, sacrificing the rest of his legislative agenda.

A President Trump could easily do the same thing, sacrificing one of his key policy promises — a $550 billion infrastructure stimulus.

If Congressional Republicans and party loyalists get their way, the new administration's first priority will be repealing Obamacare, then passing tax reform.

Related: Trump's official Cabinet and Cabinet-level picks so far

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Trump's official picks for Cabinet and administration positions
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Trump's official picks for Cabinet and administration positions

Counselor to the President: Kellyanne Conway

REUTERS/Joshua Roberts

Veterans Affairs Secretary: David Shulkin

(Photo credit DOMINICK REUTER/AFP/Getty Images)

Transportation secretary: Elaine Chao

(Photo By Bill Clark/CQ Roll Call)

Energy secretary: Rick Perry

(Photo credit KENA BETANCUR/AFP/Getty Images)

Secretary of State: Rex Tillerson

 REUTERS/Daniel Kramer

Secretary of Defense: Retired Marine General James Mattis

(Photo by Samuel Corum/Anadolu Agency/Getty Images)

Chief of staff: Reince Priebus

(JIM WATSON/AFP/Getty Images)

Chief strategist: Steve Bannon

(EDUARDO MUNOZ ALVAREZ/AFP/Getty Images)

Attorney General: Senator Jeff Sessions

(Photo By Bill Clark/CQ Roll Call)

Director of the CIA: Kansas Rep. Mike Pompeo

(Photo By Bill Clark/CQ Roll Call)

Deputy national security adviser: K.T. McFarland

(Photo by Michael Schwartz/Getty Images)

White House counsel: Donald McGahn

(Photo by Drew Angerer/Getty Images)

Ambassador to the United Nations: South Carolina Gov. Nikki Haley

(Photo by Astrid Riecken For The Washington Post via Getty Images)

Education secretary: Betsy DeVos

(Photo By Tom Williams/CQ Roll Call)

Commerce secretary: Wilbur Ross

(Photo by Andrew Harrer/Bloomberg via Getty Images)

Homeland security secretary: General John Kelly

(Photo by Drew Angerer/Getty Images)

Housing and urban development secretary: Ben Carson

(Photo credit NICHOLAS KAMM/AFP/Getty Images)

Administrator of Environmental Protection Agency: Oklahoma Attorney General Scott Pruitt

(Photo by Spencer Platt/Getty Images)

Health and human services secretary: Tom Price

(Photo by Alex Wong/Getty Images)

Department of Homeland Security: Retired General John Kelly

(REUTERS/Joshua Roberts)

Secretary of agriculture: Sonny Perdue

(BRYAN R. SMITH/AFP/Getty Images)
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Tackling those issues leaves very little political room for infrastructure development, in part because of what he wants to do, and also in part because of how House Republicans want to do it.

Reconciliation

House Republicans have said that they plan on passing tax reform and other budget related policies (like repealing Obamacare) using a tool called "reconciliation." It allows them to avoid a filibuster, which is the Democrats' last line of defense against a Republican majority legislature in both houses of Congress.

The thing is, when budget policy is passed using that tool, it has to be revenue neutral. That is to say, it can't grow the deficit.

"[When discussing the votes needed to pass tax reform] (i)n the House we have a majority and we are a majoritarian body, so all I need is 218 votes and I can pass something, that doesn't work like that in the Senate," House Speaker Paul Ryan (R-WI) said on Fox News earlier this month.

"As you know the Senate has a filibuster except for budget reconciliation ... but here's the point, for you to be able to use reconciliation to not have a filibuster, it has to be deficit neutral and so we have to have deficit neutral tax reform."

That means Republicans will have to raise some revenue as they cut taxes, especially since the plan is to cut corporate taxes from 35% to 20%.

Expect this to be a dog fight. House Speaker Paul Ryan's plan balances tax cuts with closing big loopholes, like the net interest deduction, for example. That deduction can mean the difference between being cash rich, and cash broke for some companies. Lobbyists will be fighting tooth and nail to protect their clients' interest.

Now, remember that Trump's infrastructure plan is largely a series of tax cuts meant to incentivize companies to invest in infrastructure projects. If infrastructure development is folded into the larger tax plan, it will make overall tax reform harder to pass through reconciliation.

And that's even if Republicans use dynamic scoring, a practice which basically allows the government to estimate the future benefit of tax cuts to the economy after making a load of assumptions — including about what a future government might do in response to falling tax revenue.

Related: Paul Ryan through his career

31 PHOTOS
Paul Ryan through his career
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Paul Ryan through his career
Speaker of the House Denis Hastert (L) administers the oath of office to Rep. Paul Ryan (R) of Wisconsin as his family looks on January 6, 1999 at the start of the 106th Congress. The oath is a recreation as the formal oath is administered to the entire congress as a body on the floor of the House. (photo by Rex Banner)
UNITED STATES - DECEMBER 12: Rep. Paul Ryan, R-Wis., speaks at a news conference in which House Republican leaders called for Permanent Tax Relief. (Photo By Tom Williams/Roll Call/Getty Images)
KRT US NEWS STORY SLUGGED: SOCIALSECURITY-DISCUSSION KRT PHOTOGRAPH BY GEORGE BRIDGES/KRT (April 14) Conversation on Social Security between Rep. Paul Ryan (R-WI), shown, and William Novelli, head of AARP, April 5, 2005 (lde) 2005 (Photo by George Bridges/MCT/MCT via Getty Images)
UNITED STATES - JULY 22: MEDICARE BRIEFING--Rep. Paul Ryan, R-Wisc., speaks at a Cato Institute briefing on Medicare reform in the Rayburn House Office Building. Tom Miller, director of Health Policy Studies at Cato, looks on. (Photo by Scott J. Ferrell/Congressional Quarterly/Getty Images)
WASHINGTON - SEPTEMBER 24: Rep. Paul Ryan (R-WI) questions Peter Orszag, director of the Congressional Budget Office, during a hearing on Capitol Hill about the impact of recent market turmoil on the federal budget on September 24, 2008 in Washington, DC. Orszag reported that while the impact is currently unknown, it is likely to be substantially less than $700 billion. (Photo by Brendan Hoffman/Getty Images)
WASHINGTON - APRIL 27: House Budget Committee ranking member Rep. Paul Ryan (R-WI) (R) delivers an opening statement during a conference committee meeting with Senate Budget Committee Chairman Kent Conrad (D-ND) (L) and House Budget Committee Chairman John Spratt (D-SC) in the U.S. Capitol April 27, 2009 in Washington, DC. House and Senate lawmakers have already struck a tentative deal on the FY2010 budget resolution and they hope to file a conference report after today's meeting. (Photo by Chip Somodevilla/Getty Images)
WASHINGTON - MARCH 19: (L-R) U.S. House Minority Whip Rep. Eric Cantor (R-VA), Rep. Dave Camp (R-MI) and Rep. Paul Ryan (R-WI) listen during a news conference on the health care legislation March 19, 2010 on Capitol Hill in Washington, DC. The House will vote on the Health Care Reform Legislation on Sunday, March 21. (Photo by Alex Wong/Getty Images)
Representative Paul Ryan, a Republican from Wisconsin and chairman of the House Budget Committee, speaks during a news conference at the U.S. Capitol in Washington, D.C., U.S., on Tuesday, April 5, 2011. U.S. House Republicans today unveiled a plan to overhaul the federal budget and slash the deficit in coming years by about three-quarters, with a $6-trillion cut in spending and 25 percent cap on tax rates. Photographer: Joshua Roberts/Bloomberg via Getty Images
MEET THE PRESS -- Pictured: Rep. Paul Ryan (R-WI) left, and moderator David Gregory, right, appear on 'Meet the Press' in Washington, D.C., Sunday, April 10, 2011. (Photo by William B. Plowman/NBC/NBCU Photo Bank via Getty Images)
MILWAUKEE, WI - APRIL 01: Republican Presidential candidate, former Massachusetts Gov. Mitt Romney (R) jokes with U.S. Rep Paul Ryan (C) (R-WI) during a pancake brunch at Bluemound Gardens on April 1, 2012 in Milwaukee, Wisconsin. With less than a week before the Wisconsin primary, Mitt Romney continues to campaign through the state. (Photo by Justin Sullivan/Getty Images)
WASHINGTON, DC - APRIL 26: House Budget Chairman Rep. Paul Ryan (R-WI) is introduced before speaking about 'America's Enduring Promise,' and the federal budget, in a speech at Georgetown University April 26, 2012 in Washington, DC. During his speech, Ryan said that his proposed budget confronts the nation's growing $15 trillion debt before it impacts future generations of Americans. (Photo by Win McNamee/Getty Images)
NORFOLK, VA - AUGUST 11: Republican presidential candidate, former Massachusetts Gov. Mitt Romney (L) jokes with Rep. Paul Ryan (R-WI) (R) after announcing him as the 'next PRESIDENT of the United States' during an event announcing him as his running mate in front of the USS Wisconsin August 11, 2012 in Norfolk, Virginia. Ryan, a seven term congressman, is Chairman of the House Budget Committee and provides a strong contrast to the Obama administration on fiscal policy. (Photo by Win McNamee/Getty Images)
UNITED STATES - SEPTEMBER 14: Rep. Paul Ryan, R-Wis., Vice Presidential candidate, waves to the crowd after addressing the Values Voter Summit at the Omni Shoreham Hotel in Woodley Park. Photo By Tom Williams/CQ Roll Call)
NEWPORT NEWS, VA - SEPTEMBER 18: Republican vice presidential candidate, U.S. Rep. Paul Ryan (R-WI), pauses as he speaks during a campaign rally at Christopher Newport University September 18, 2012 in Newport News, Virginia. Ryan continued to campaign for the upcoming presidential election. (Photo by Alex Wong/Getty Images)
MIAMI, FL - SEPTEMBER 22: Republican vice presidential candidate, U.S. Rep. Paul Ryan (R-WI) hugs waitress, Lourdes Alcerro, during a campaign stop at Versailles restaurant in the Little Havana neighborhood on September 22, 2012 in Miami, Florida. Ryan continues to campaign for votes across the country. (Photo by Joe Raedle/Getty Images)
Republican presidential candidate Mitt Romney (R) and running-mate Paul Ryan share a laugh as they are introduced at a campaign rally September 25, 2012 at Dayton International Airport in Vandalia, Ohio. AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/GettyImages)
Representative Paul Ryan, a Republican from Wisconsin, arrives at a news conference on Capitol Hill in Washington, D.C., U.S., on Tuesday, Oct. 20, 2015. Ryan said he'd be willing to run for speaker of the U.S. House if Republicans unify behind him now, end leadership crises and let him continue spending time with his family. Photographer: Andrew Harrer/Bloomberg via Getty Images
Representative Paul Ryan, a Republican from Wisconsin and chairman of the House Ways and Means Committee, center right, walks down the steps of the U.S. Capitol building following a vote in Washington, D.C., U.S., on Friday, Oct. 9, 2015. Ryan is under heavy pressure from fellow Republicans to run for U.S. House speaker after a hard-line faction forced Speaker John Boehner to resign and his top lieutenant to drop out of the race. Photographer: Andrew Harrer/Bloomberg via Getty Images
Representative Paul Ryan, a Republican from Wisconsin, walks to a meeting in the basement of the U.S. Capitol in Washington, D.C., U.S., on Tuesday, Oct. 20, 2015. Ryan is set to meet with a group of House conservatives Tuesday as he weighs a potential run to replace Speaker John Boehner under pressure from fellow Republicans. Photographer: Andrew Harrer/Bloomberg via Getty Images
Representative Paul Ryan, a Republican from Wisconsin and chairman of the House Ways and Means Committee, center, talks to the media after walking out of the U.S. Capitol building following a vote in Washington, D.C., U.S., on Friday, Oct. 9, 2015. Ryan is under heavy pressure from fellow Republicans to run for U.S. House speaker after a hard-line faction forced Speaker John Boehner to resign and his top lieutenant to drop out of the race. Photographer: Andrew Harrer/Bloomberg via Getty Images
UNITED STATES - OCTOBER 20 - Rep. Paul Ryan, R-Wis., speaks at a news conference following a House Republican meeting, on Capitol Hill in Washington, Tuesday, Oct. 20, 2015. Ryan is stating that he will run for speaker only if he receives enough GOP support by the end of the week. (Photo By Al Drago/CQ Roll Call)
US Speaker of the House Paul Ryan, Republican of Wisconsin, awaits the arrival of Israeli President Reuven Rivlin for a meeting at the US Capitol in Washington, DC, December 10, 2015. AFP PHOTO / SAUL LOEB / AFP / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
WASHINGTON, DC - DECEMBER 10: House Speaker Paul Ryan (R-WI) holds his weekly press briefing on Capitol Hill on December 10, 2015 in Washington, D.C. Paul Ryan spoke on topics including Donald Trump and the spending bill. (Photo by Allison Shelley/Getty Images)
WASHINGTON, DC - DECEMBER 15: Speaker of the House Paul Ryan, (R-WI) speaks during a Politico interview at the Grand Hyatt on December 15, 2015 in Washington DC. Ryan was interviewed by Politico's Chief White House Correspondent Mike Allen during a Politico Playbook Breakfast. (Photo by Mark Wilson/Getty Images)
U.S. House Speaker Paul Ryan (R-WI) (L) holds ceremonial swearing-in for Representative-elect Ralph Norman (R-SC) on Capitol Hill in Washington, U.S., June 26, 2017. REUTERS/Yuri Gripas
Speaker of the House Paul Ryan (R-WI) speaks after Senate Republicans unveiled their version of legislation that would replace Obamacare on Capitol Hill in Washington, U.S., June 22, 2017. REUTERS/Joshua Roberts
Speaker of the House Paul Ryan introduces his new tax policy at the National Association of Manufacturers Summit in Washington, U.S., June 20, 2017. REUTERS/Aaron P. Bernstein
Speaker of the House Paul Ryan visits members of the Republican team prior to the Congressional Baseball Game at Nationals Park in Washington, U.S., June 15, 2017. REUTERS/Aaron P. Bernstein
U.S. Speaker of the House Paul Ryan speaks to the press about President Donald Trump, former FBI Director James Comey and Russia investigations as Republican Conference Chairman Rep. Cathy McMorris Rodgers (R) looks on after a closed meeting of the Republican leadership of the House of Representatives on Capitol Hill in Washington, U.S. May 17, 2017. REUTERS/Aaron P. Bernstein
Speaker of the House Paul Ryan (R-WI) listens as U.S. President Donald Trump speaks during a meeting with members of the Republican Congressional leadership at the White House in Washington, U.S., June 6, 2017. REUTERS/Joshua Roberts
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As analysts at Morgan Stanley put it in a recent note, "further offsets will be required, even in a dynamic framework."

That means the infrastructure plan will have to be handled separately, outside the rules of reconciliation. And likely without grudging (if any) support from deficit hawks in the GOP.

"Although Republicans are demonstrating unity at the moment, the tax debate makes plain a new division in the party, which is key to understanding how tax reform will come together," Morgan Stanley wrote. "The fiscal hawks in the House of Representatives have reiterated that all tax reform must be revenue neutral; the de facto 'Keynesian' in the Trump orbit are willing to prioritize growth plans over short-term deficit concerns, if need be."

Splintering

That means that if Trump wants to pass his infrastructure plan, he'll have to do it with the Democrats' help and likely after having already cut taxes twice — directly through tax code reform, and indirectly by repealing Obamacare — and gutting some major programs supported by Democrats.

There won't be a lot of good will to go around at that point. And while it could be easier to get Democrats on board with spending, it will be harder to get them on board with the huge part of Trump's infrastructure plan that involves tax cuts to incentivize wealthy developers to invest in projects.

What's more, infrastructure experts have largely panned Trump's plan because they simply don't think it works.

"No amount of tax break will encourage investment in an asset that doesn't produce revenue," wrote veteran infrastructure investor Joel Moser, CEO of Aquamarine Investment Partners. "No one will invest in the replacement of defective bridges that have no tolls, regardless of the tax abatement, unless a revenue stream is attached to those assets."

Now, analysts at Deutsche Bank see this shaking out differently. They think Republicans could split tax reform and pass personal reform first and then work on corporate tax reform (including tax breaks for infrastructure development). That, however, would make it harder for Republicans to bypass Democrats using the reconciliation process, which seems central to their plan.

Plus, if Trump's choice to head the budget office is any indication, he's going to be getting a lot of advice from deficit hawks. And those hawks, Ryan included, have never said anything in support of infrastructure spending. They basically don't talk about it, as if they hope the whole idea will go away.

What all of this means, ultimately, is that an infrastructure plan may end up lower on the political totem pole than Trump has made it sound throughout his campaign. He and Congressional Republicans are about to spend a lot of political capital before they can tackle an infrastructure plan that lacks bipartisan (or even some partisan) appeal.

Making sure tax reform is "revenue neutral" will be hard enough, following that up with another tax cut for big business will be even harder.

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