Mohamed El-Erian, Allianz SE’s chief economic advisor, said President Donald Trump’s push to reform health care before addressing tax policies could mean he loses some negotiating power down the road.
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“By going on health care first, he may reduce the probability of getting tax reform in the summer,” El-Erian said Friday in a Bloomberg Television interview. “You use up a lot of political capital going with health care first, so that’s the thing the market should look at closely — the sequencing of policies.”
(Related on ThinkAdvisor: Republicans Unveil Bill to Repeal and Replace Obamacare)
Republicans unveiled a new health care bill Tuesday, called the American Health Care Act, that would include a refundable, age-based tax credit and ends the Affordable Care Act’s requirement to have coverage.
(Related on ThinkAdvisor: Businesses Salivate Over Trump’s Tax Ideas, but Will They Happen?)
Markets have rallied since Trump’s victory in November on speculation his promises to boost infrastructure spending, cut regulation and reform the tax code will spur economic growth. Some Republican senators have been signaling that overhauling the tax code could take longer than expected.