Fear: Trump in the White House

by Bob Woodward

  * * *

  The corporate tax rate was still a key question. Trump was stuck on 15 percent. Cohn and Mnuchin finally got him to agree to 18 percent. Then Speaker Ryan, the tax expert, called and urged Trump to move to 20 percent. Orrin Hatch’s group of senators and Cohn came up with a rate of 21 percent.

  Cohn called Trump. He gave the president a complicated technical description of the advantages of this corporate tax rate. A tax lawyer might understand the nuances of the various percentages or of certain loopholes Trump could not possibly understand or care about.

  “Go for it,” Trump said.

  Cohn saw that he could do anything on the tax reform bill as long as Trump could call it a win.

  * * *

  Trump had a marketing idea: “Call it the ‘Cut, Cut, Cut Bill.’ ” He loved the idea, and had a long phone call with Ryan and Brady to sell this name. After the phone call, Trump was under the impression that it would be called the “Cut, Cut, Cut Bill” in the House.

  The House called it “The Tax Cut and Jobs Act.” But because of ancient Senate rules, that title was too short, and rather unbelievably it was finalized as “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018.”

  Cohn found out that getting votes in the Senate was all about giving individual senators their favorite loopholes or tax breaks. “It’s a candy store,” he said. Senators Chuck Grassley, John Thune and Dean Heller were among those who wanted credits for alternative fuel, including windmills. Susan Collins insisted on a deduction for schoolteachers who bought supplies for their classrooms. She would not vote for the bill if the deduction was not included. Ron Johnson of Wisconsin was concerned about pass-through businesses. McConnell made other promises including one to Jeff Flake on immigration.

  The final bill was a dizzying labyrinth of numbers, rules and categories. There was no doubt that it was a Republican tax bill, benefiting corporations and the wealthy most. The bill, however, would reduce taxes for all income groups in 2018, and according to the Tax Policy Center, after-tax income would go up an average of 2.2 percent.

  Most in the middle class—Americans earning taxable income ranging from $19,000 to $77,000—would go from the 15 percent tax bracket to the new lower 12 percent tax bracket, saving the average person hundreds of dollars. These individual tax cuts, however, would decrease each year and end altogether in 2025.

  The business benefits included the reduction in the corporate tax rate from 35 to 21 percent. Another was that so-called pass-through enterprises such as partnerships and small businesses like the Trump Organization could get an effective 20 percent tax deduction.

  Around 1 a.m. on December 20, 2017, Vice President Pence was in the chair if they needed his vote to break a tie in the Senate.

  It passed, 51 to 48.

  A senior Democratic senator with whom Cohn was good friends came up to him. He seemed to be the most agitated person walking off the Senate floor.

  “This will do damage for the next decade,” the senator said. “We’ll be undoing this for the next decade.”

  Cohn urged him to relax. “We had to get competitive in the corporate world,” he said. “We just had to. And when you see that chart of our competitors—look, we’re in a competitive world.”

  The individual income tax rates were pegged at 10, 12, 22, 24, 32, 35 and the top rate, 37 percent. The drop from 39.6 percent was standard Republican tax cutting.

  In the end, the law would add an estimated $1.5 trillion to the annual deficit over 10 years.

  Republican leaders and Trump celebrated with self-congratulatory speeches on the South Portico of the White House. Trump said, “Ultimately what does it mean? It means jobs, jobs, jobs.”

  Tax reform was the only major legislation passed his first year.

  CHAPTER

  36

  Early in 2018, the president unleashed a full take-down of Bannon, who had clearly spoken to journalist Michael Wolff as a main source for his unflattering book Fire and Fury.

  In a long statement, rather than a tweet, Trump said, “Steve Bannon has nothing to do with me or my Presidency. When he was fired, he not only lost his job, he lost his mind. . . . Now that he is on his own, Steve is learning that winning isn’t as easy as I make it look.”

  From his point of view, Bannon believed Trump had largely failed as a change agent. The old order in national security certainly won in Trump’s first year, Bannon believed. Perhaps the only exception was a toughening stance on China and an awareness that China was the true rival in international affairs.

  Bannon was appalled by the National Security Strategy, a 55-page document published in December 2017. The Middle East section said the policy was designed to “preserve a favorable regional balance of power.”

  What the fuck is that? Bannon asked. It was a retread of the old-world, Kissingeresque order, seeking political stability. The whole purpose of Trump’s 2017 Riyadh summit had been to form an alliance to shut down Iranian expansion and hegemony. “Balance of power” in Bannon’s view meant the U.S. was comfortable with the status quo and Iran’s “short-of-war” strategy that took confrontation to the brink but left Iran owning the gray zone.

  Bannon believed that Trump wanted to roll Iran back—get Iran out of Iraq, out of Syria, out of Lebanon and out of the peninsula in Yemen. The alliance to do that was the U.S., Saudi Arabia, the Gulf states and Israel.

  China was the real enemy. Russia was not the problem. The Russian economy was the size of New York State’s economy—about $1.5 trillion—and the Chinese economy would soon be bigger than that of the United States, perhaps within a decade.

  Bannon still believed the forces of the populist-nationalist movement were powerful. But the old order was able to blunt all that in the first year of the Trump presidency. The old order was not going to roll over.

  The populist movement had shown that it didn’t have the force to break through the permanent political class. Trump had been the armor-piercing shell that could pierce the Clinton part, but not the rest.

  The Republican establishment had brought Trump to heel, he believed. The tax cut was a 100 percent corporate interest tax cut. The budget, adding $1.5 trillion to the deficit, was the worst part of the permanent political-class, boomtown mentality where every lobbyist got their deal for their clients. There was no wall. The swamp had won.

  The Deep State was not the problem. It was the up-in-your-face state.

  Most compromising for Trump, in Bannon’s view, was the January 26, 2018, speech that Trump gave at the World Economic Forum in Davos, Switzerland. The New York Times headline had been, “Trump Arrived in Davos as a Party Wrecker. He Leaves Praised as a Pragmatist.”

  It had been a Chamber of Commerce speech, Bannon believed. Trump had looked at the establishment and essentially embraced it.

  Trump’s critique of Attorney General Jeff Sessions was particularly galling to Bannon. He was sure Trump would never get a better guy confirmed by the Senate.

  Grievance was a big part of Trump’s core, very much like a 14-year-old boy who felt he was being picked on unfairly. You couldn’t talk to him in adult logic. Teenage logic was necessary.

  During Trump’s first six months in the White House, few understood how much media he consumed. It was scary. Trump didn’t show up for work until 11:00 in the morning. Many times he watched six to eight hours of television in a day. Think what your brain would be like if you did that? Bannon asked.

  Bannon claimed he used to say to Trump, “Cut the fucking thing off.”

  At Mar-a-Lago, Trump would come back from playing golf. It’d be a Saturday afternoon in February or March. Absolutely stunningly beautiful. One of the most beautiful things in the world. Melania would be in the room right next door. He would watch CNN’s D-team of panelists, whom Bannon considered super-haters, and get worked up. Bannon would say, “What are you doing? Why do you do this? Cut this off. It’s not meaningful. Just e
njoy yourself.”

  Trump’s response would often go like this: “You see that? That’s a fucking lie. Who the fuck’s . . .”

  Bannon would say, “Go play some slap and tickle with Melania.” Trump also did not spend much time with his son Barron, then age 11.

  Bannon felt he was not friends with Trump. Trump didn’t have genuine friends. He was a throwback to a different time—1950s America. He was a man’s man and a guy’s guy.

  The #TimesUp and #MeToo movements of women and feminists would create an alternative to end the male-dominated patriarchy, Bannon believed.

  “Trump is the perfect foil,” he summarized. “He’s the bad father, the terrible first husband, the boyfriend that fucked you over and wasted all those years, and [you] gave up your youth for, and then dumped you. And the terrible boss that grabbed you by the pussy all the time and demeaned you.”

  * * *

  President Trump’s tweets may have come close to starting a war with North Korea in early 2018. The public never learned the full story of the risks that Trump and North Korean leader Kim Jong Un took as they engaged in a public battle of words.

  It began on New Year’s Day in an address by Kim, reminding the world, and the American president, of his nuclear weapons.

  “It’s not a mere threat but a reality that I have a nuclear button on the desk in my office,” Kim declared. “All of the mainland United States is within the range of our nuclear strike.” It was an ugly and provocative threat.

  Lingering after receiving his President’s Daily Brief on January 2, President Trump said, “In this job I’m playing five hands of poker simultaneously, and right now we’re winning most of the hands. Iran is busting up and the regime is under intense pressure. Pakistan is terrified of losing all of our security aid and reimbursements. And South Korea is going to capitulate to us on trade and talks with North Korea.” He seemed on top of the world but he didn’t mention the fifth poker hand.

  Real power is fear.

  The answer on North Korea was to scare Kim Jung Un. “He’s a bully,” Trump told Porter. “He’s a tough guy. The way to deal with those people is by being tough. And I’m going to intimidate him and I’m going to outfox him.”

  That evening, Trump sent a taunting, mine-is-bigger-than-yours tweet that shook the White House and the diplomatic community: “North Korean Leader Kim Jong Un just stated that the Nuclear Button is on his desk at all times,” Trump wrote on Twitter at 7:49 p.m. “Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!”

  It played on Kim’s insecurities. In the last six years, 18 of Kim’s 86 missile tests had failed, according to the Center for Nonproliferation Studies.

  The president of the United States was practicing a scene out of Dr. Strangelove. The Internet lost its collective mind.

  The Washington Post’s Twitter account rushed to clarify: “There is no button.”

  Colin Kahl, Obama’s former deputy assistant secretary of defense, tweeted, “Folks aren’t freaking out about a literal button. They are freaking out about the mental instability of a man who can kill millions without permission from anybody.”

  Many on Twitter wondered if Trump had violated the platform’s terms of service by threatening nuclear war. Others recalled Hillary Clinton’s line from her July 2016 convention speech: “A man you can bait with a tweet is not a man we can trust with nuclear weapons.”

  Trump’s tweet was not without supporters. A writer for the conservative Washington Examiner concluded: “One of former President Barack Obama’s central challenges was the foreign perception—by friends and foes alike—that he was reluctant to employ the full range of U.S. power. . . . I believe Trump is right to roll the dice and take the opposite approach.”

  Trump was not done. Nor was he satisfied that it sufficed for the United States, the top nuclear power in the world, to issue an unprecedented threat.

  Within the White House but not publicly, Trump proposed sending a tweet declaring that he was ordering all U.S. military dependents—thousands of the family members of 28,500 troops—out of South Korea.

  The act of removing the dependents would almost certainly be read in North Korea as a signal that the United States was seriously preparing for war.

  On December 4, McMaster had received a warning at the White House. Ri Su-yong, the vice chairman of the Politburo, had told intermediaries “that the North would take the evacuation of U.S. civilians as a sign of imminent attack.”

  Withdrawing dependents was one of the last cards to play. The possible tweets scared the daylights out of the Pentagon leadership—Mattis and Dunford. A declaration of intent to do so from the U.S. commander in chief on Twitter was almost unthinkable.

  A tweet about ordering all military dependents out of South Korea could provoke Kim. The leader of a country like North Korea that only recently had acquired nuclear weapons and had many fewer nukes than a potential adversary could be trigger-happy. A use-it-or-lose-it mind-set could take hold.

  The tweet did not go out. But Trump wouldn’t drop the matter, and raised the issue of withdrawing U.S. military dependents with Senator Graham.

  On December 3, before Trump and Kim’s war of words, and after a North Korean ICBM test, Graham had advocated removing military families from South Korea. “It’s crazy to send spouses and children to South Korea,” he said on CBS’s Face the Nation. He suggested making South Korea an unaccompanied tour for service members and said, “I think it’s now time to start moving American dependents out of South Korea.”

  Now, a month later, when Trump called, Graham seemed to have had a change of heart.

  “You need to think long and hard before you make that decision,” Graham said. “Because when you make that decision, it is hard to go back. The day you do that is the day you rock the South Korean stock market and the Japanese economy. That is a big frigging deal.”

  “You think I should wait?” Trump asked.

  “Mr. President,” Graham said, “I don’t think you should ever start this process unless you’re ready to go to war.”

  Trump had stayed his Twitter finger for the moment, but the issue of U.S. military dependents in South Korea did not go away. The U.S. military, however, continued to send dependents to South Korea.

  CHAPTER

  37

  General Kelly informed the president that his two top foreign policy advisers, McMaster and Tillerson, were in a ferocious fight over who would negotiate with Saudi Arabia to get $4 billion. The money was in part to fund operations in Syria, including a top secret CIA project for the Syrian rebels code-named TEAK.

  Getting foreign governments to fund U.S. military and CIA operations in foreign countries remained one of Trump’s biggest goals. Damn H.R., Trump said. This pointy-head academic has no sense of business or how to negotiate.

  Kelly agreed, McMaster was not the guy for the job and so far had not been very successful with the Saudis. They were often willing to write big checks for a variety of projects in Syria. According to Tillerson, McMaster had stepped in and said, “I’m reaching out to my counterparts in Saudi. I’m going to negotiate directly with them.”

  The president was furious. Even with a multitude of problems with Tillerson, at least he had experience cutting deals with the Saudi royal family for years as the Exxon CEO. Tillerson also knew the Saudis could not be trusted and for Trump, not trusting the people on the other side of the table was a first principle of haggling, of beating them down to get a better bargain. You had to be tough and say no to get to yes. Why the hell would McMaster take this away from Tillerson? It doesn’t make any sense, he said.

  But there was a more pressing matter that day, January 19, 2018, one day short of Trump’s first full year.

  In several secure phone conversations with President Moon Jae-in of South Korea, Trump had intensified his criticism of the KORUS trade agreement between th
e two countries. He would not let go of the $18 billion trade deficit and the $3.5 billion expense of stationing 28,500 U.S. troops. The refrain was jeopardizing relations with Moon, whom he disliked. Trump’s obsessive and unfiltered venting had brought him to the edge once again.

  Trump told Moon he wanted to send a 180-day termination letter and destroy the trade relationship.

  You guys are ripping us off, he said. He wanted the trade and security issues separated. I’m done just giving you guys free money!

  Moon replied that trade and security were intertwined. We want to work with you, the South Korean president said. He was conciliatory. You’re one of our allies, one of our partners. There may be some misunderstanding about the economic relationship. We want to come to an understanding.

  Trump was amped up. You’ve got to pay for the THAAD anti-ballistic missile system. Why do we need to have any of our anti-ballistic system there?

  He belittled the KORUS trade agreement, South Korea and its new leader. This barely concealed rage at an ally was magnificently undiplomatic, the way the president often liked it. He was on the verge of blowing up the relationship.

  Kelly, McMaster, Tillerson and Mattis joked darkly that it was inexplicable that the president was voicing more ire at South Korea than our adversaries—China, Russia, Iran, Syria and North Korea.

  The senior White House staff and national security team were appalled. They didn’t know what the president might say or do. This was an important relationship, especially at that moment. They had to shut this down. There was a consensus that something needed to be done before Moon decided he’d had enough.

  McMaster set up a National Security Council meeting in the Situation Room for January 19, 2018. The meeting was billed as a discussion of issues related to South Korea among the president and the principals—Tillerson, Mattis, Kelly, McMaster, Dunford, Cohn.