Donald Trump was elected on a promise of sweeping change. To enact it he will have to balance his populist pledges with the small government instincts of his party. To make progress he will have to draw on all his deal-making skills.
The size of government
Mr Trump’s aides are working on a plan that could cut $10.5 trillion in federal spending over the next decade.
The blueprint comes from the Heritage Foundation, a think tank; similar plans have been supported by Republicans in Congress. Mr Trump’s White House is expected to release a draft budget as soon as in 45 days.
It may appease Republican fiscal hawks who have been alarmed by Mr Trump’s promises to boost infrastructure spending and rebuild the military, all the while slashing taxes. His tax plan has gone through several incarnations. Analysts have agreed that all of them would have added to the national debt. The projected deficits have ranged from $2.6 trillion to more than $10 trillion over ten years.
The military
The Pentagon wants Mr Trump to launch the biggest warship building programme since the end of the Cold War. On the campaign trail he pledged to raise the number of active army troops from 475,000 to 540,000, increase the number of marine battalions from 24 to 36 and to put more fighter planes into service. To pay for the expansion, Mr Trump would ask Congress to lift the so-called “sequester” spending caps. Fiscal hawks on Capitol Hill may hesitate: the move would add an estimated $450 billion to the federal deficit over the next decade.
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The wall
In his first 100 days Mr Trump has promised to finalise a design for a 1,000-mile wall along the Mexican border. The proposal was central to his candidacy, but building it will be tricky. He has said that Mexico will pay for the project; most experts believe that this is implausible.
The latest thinking is that Mr Trump could turn to the Secure Fence Act of 2006, which was signed into law by George W Bush. The act allowed the Department of Homeland Security to "take all actions” necessary to “achieve and maintain operational control” over the entire US border. The act may give Mr Trump permission to build the wall, but he will still need funds.
A UK trade deal
Whether it will be a priority remains to be seen, but the Heritage Foundation called on Mr Trump this week to instruct his trade representative and the White House National Trade Council to fast-track the pursuit of a US-UK trade pact.
Obamacare
Mr Trump campaigned on a popular promise to overturn President Obama’s Affordable Care Act, otherwise known as Obamacare. Costs are rising and critics say that the system is poised to collapse as insurers flee the market. This week Mr Trump said that his replacement would provide “insurance for everybody”, and for less money. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it,” he added. “That’s not going to happen with us.” Those promises took Republican leaders by surprise. They have stressed the importance of lowering costs, not of providing blanket care.
Last week the House of Representatives voted to begin the repeal process. The Senate also approved the resolution, which means that Republicans do not have to worry about being thwarted by a filibuster from Democrats.
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However, after nearly seven years of vowing to repeal Obamacare, Republicans are split on how to go about it. Some want to slow down the repeal effort until a replacement plan is unveiled, afraid that they could be blamed for stripping healthcare from 18 million people. Mr Trump seems keen to act immediately but is yet to supply a detailed plan.
Infrastructure
Wilbur Ross, the billionaire tipped to be commerce secretary, has outlined a plan to stimulate $1 trillion in infrastructure spending, something that Mr Trump says can create a jobs boom.
The scheme calls for the government to award $137 billion tax credits to private businesses over a decade to entice them to inject money into infrastructure projects. Mr Ross has argued that the tax credits would cost the government nothing, due to increased tax revenue from new economic activity.
Critics say that the plan is flawed. The tax breaks will go to projects that would have gone ahead already, they argue. And it would only work for projects that generate revenue, which would rule out maintenance of existing infrastructure.
Border tariffs
This week Mr Trump criticised a key part of the corporate tax plan put forward by Republicans in the House of Representatives — an alternative to his pledge to slap large punitive tariffs on goods made overseas by US companies and then imported into America.
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The measure, known as border adjustment, would mean that companies would not have to include the revenue from exports when calculating their income. They also would not be able to deduct the cost of goods they import. It would be part of a broader plan to spur job creation in the US. Mr Trump told the Wall Street Journal it was “too complicated . . . I don’t love it”.
Islamic State
Mr Trump has declined to share detailed plans to obliterate Isis, saying he wanted to keep the jihadist group guessing. He has said he will ask his generals to present, within 30 days of taking office, a plan to defeat Isis.
China
Mr Trump rattled Washington’s foreign policy set shortly after his election win by becoming the first president or president-elect since 1979 to take a call from the president of Taiwan. The Chinese regard Taiwan as sovereign territory and a “core interest”, one they are willing to go to war over. Mr Trump has also chosen a fierce critic of China, the economist Peter Navarro, to head a White House body that will formulate trade policy — another move that hints at a newly antagonistic superpower rivalry between Washington and Beijing.
Russia and Nato
This week Mr Trump told The Times that he would propose offering to end sanctions imposed on Russia over its annexation of Crimea in return for a nuclear arms reduction deal.
The suggestion came amid concerns that Mr Trump was too keen to improve relations with Moscow. In the same interview, he provoked concerns when he said Nato had threatened to make itself “obsolete”. His cabinet takes a different view. James Mattis, the retired general in line to lead the Pentagon, has said that Nato is vital and that Russia must not be allowed to break the alliance.
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North Korea
Of all the problems in Mr Trump’s inbox North Korea is perhaps the most frightening. Kim Jong Un said this month that his hermit kingdom was in the “final stage” of preparations to test-fire a missile capable of carrying a nuclear warhead to the US.
Mr Trump responded on Twitter, saying that the test “won’t happen”. He blamed China for not controlling Pyongyang. Can he rebuke Beijing on trade while also demanding its help to control Mr Kim?
