Many voters supported Donald Trump not as a disrupter of norms and institutions, but for policy reasons. They hired him to accomplish specific tasks, such as reducing prices, cutting taxes and halting illegal immigration. The incoming administration’s success will depend on Mr. Trump’s ability to accomplish these tasks. It won’t be easy—in part because some of his policies contradict each other and could undercut these goals.
Take Social Security as an example. Mr. Trump posted on Truth Social this July: “SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!” This statement, which he repeated on the campaign trail, was popular because it seemed intuitive. Workers are taxed on their earnings throughout their working lives to pay for future Social Security benefits. Why should they be taxed again when they receive these benefits?
But it isn’t that simple. By law, tax revenue from Social Security benefits gets plowed back into the Social Security Trust Fund. Taxes from higher-income earners also go into the Medicare Health Insurance Trust Fund. Ending taxation on Social Security benefits would reduce revenue to these programs over the next decade by between $1.6 trillion and $1.8 trillion, according to the Committee for a Responsible Federal Budget. Social Security would become insolvent in 2032, a year earlier than if the tax remained, while Medicare would become insolvent in 2030, six years earlier than if the tax remained. Mr. Trump’s promises to end taxes on tips and overtime pay would dig the fiscal hole even deeper.
Another bold promise—to cut electricity and other energy costs in half within 18 months of taking office—is at the core of Mr. Trump’s strategy for lowering prices across the board. This pledge helped move millions of working-class voters into his column. But many fossil-fuel industry leaders don’t favor his strategy of significantly boosting domestic production, and many energy experts doubt it will work.
The Trump administration may urge the oil industry to “drill, baby, drill,” but that doesn’t guarantee it will do so. The industry seeks to be profitable and won’t want to drill if it has to sell its product below the cost of production. Frackers are also under pressure to return value to investors by cutting spending on new production.
Rather than increasing supply, the oil industry would prefer a strategy of boosting demand—for starters, by eliminating the Biden administration’s regulations and subsidies designed to accelerate a transition to electric vehicles. But this prospect horrifies the auto industry, which has already spent some $146 billion preparing for an EV-dominated future. Automakers will suffer a financial blow if they don’t get a return on this investment. Thus they’re urging regulatory stability, but Mr. Trump may be in no mood to provide it.
If Mr. Trump gave priority to reducing consumers’ costs for big-ticket items, he would eliminate restrictions on the import of electric vehicles. China sells many such vehicles at substantially less than the average price of Tesla ’s U.S.-produced vehicles. But lowering import barriers would sound a death knell for the domestic auto industry.
This example illustrates a larger truth: Reducing prices often contradicts the goal of stabilizing and increasing domestic production. Protecting American industry can come at a substantial cost to the consumer. While Mr. Trump has said that “tariff” is the most beautiful word in the dictionary, many Americans consider “inflation” to be among the ugliest, and they voted for him believing he would rein it in. It’ll be interesting to see how the new administration responds when the tension between two of its core promises—protecting American industries and lowering prices—becomes too great to ignore.
Many other tensions exist within Mr. Trump’s agenda. During his campaign, he promised the largest deportation of illegal immigrants in U.S. history. Doing so, he argued, would result in lower housing prices due to fewer immigrants competing with Americans for scarce housing.
But the result would likely be the opposite: a labor shortage resulting in fewer homes built and thus higher home prices. The U.S. construction industry employs an estimated 1.5 million illegal immigrants. Industry leaders believe that if these workers are deported, there won’t be enough legal ones willing and able to take their places. Farmers have similar concerns about a labor shortage in agriculture. Some of the president-elect’s advisers may insist on mass deportation, but that would have unintended consequences.
Mr. Trump is a mold-breaking leader, but voters will judge him on a traditional measure—his ability to deliver on the promises that propelled him to a second term. Tensions among these promises will complicate his task.
