The next Republican fights could be even worse than healthcare

After the unraveling of Republicans' plan to revamp the American healthcare system, GOP leaders have turned their attention to other legislative matters.

But the healthcare failure has laid bare the still-warring factions within the Republican Party and signaled that fights to come may turn out similar to the one over American Health Care Act.

During the debate on the AHCA, conservative Republican members of the House Freedom Caucus were able to hold out and block the bill because it did not meet their ideological muster in repealing Obamacare. At the same time, attempts by the Trump administration to appease these conservatives caused more moderate members of the GOP, such as the Tuesday Group caucus, to withdraw their support of the bill.

Trump has selected tax reform as his next target after the healthcare defeat, and battles loom over government funding and raising the nation's debt ceiling. These issues will reveal the extent of the divides in the GOP - and how well Trump can lead a political party.

The debt ceiling and shutdown fight

Trump and his top advisers have hinted that his next agenda item will be tax reform. But another fight on the horizon will hold immediate and deeper implications.

First, government funding runs out late next month, setting up a potential government shutdown on April 29, the 100th day of Trump's presidency. Then, sometime over the summer - most likely in July, according to estimates - Congress will have to raise the nation's borrowing limit or face a possible default on some of the federal debt.

A default would be disastrous for the US and global economy. But far-right members of the GOP pushed the country to that brink in 2011 and 2013, when the federal government shut down for more than two weeks and Congress hurled toward the edge of the debt ceiling.

Greg Valliere, a political analyst at Horizon Investments, said the possibility of another shutdown and a default will mirror the fight over Obamacare.

"Despite all the glib predictions that tax reform can now move quickly, that overlooks the near-certainty of an epic spring battle over spending," Valliere wrote in a note to clients on Monday. "Talk about deja-vu: once again the fight will be among Republicans, with the Freedom Caucus seeking deep spending cuts while moderate Republicans fight to soften Trump's spending reductions."

These divides resemble the fight over healthcare. The moderate parts of the GOP want to avoid a shutdown, while more conservative members including the Freedom Caucus will not want to raise the ceiling or pass a spending deadline without cuts.

This could leave Trump with no option but to have to get Democrats on board, meaning they could push for their own provisions to legislation that keeps the government funded or that raises the debt ceiling.

Of course, there is always the option to mint a trillion dollar coin to pay down some of the debt, an outside-the-box option that evidently was seriously considered by the Obama administration during previous debt-ceiling fights fight.

Tax reform

Tax reform in the vein of what Trump and Republican leaders have suggested will also be difficult to achieve.

Trump has said that he wants to slash the federal corporate tax to 15% to 20% from its current 35% rate, and also lower personal taxes. On February 9, Trump said that he would unveil "something phenomenal in terms of tax" over the next two or three weeks.

Despite the early timeline, Vallier said neither congressional GOP leaders or the Trump team have a full plan ready to go.

"By summer, tax reform finally may be moving with a bill making it to the House floor, but don't expect much action any time soon (the Ways and Means Committee will convene a meeting tomorrow but the panel's bill isn't ready)," Valliere said. "The Trump Administration doesn't have its tax plan finished, either; Treasury Secretary Steven Mnuchin and most congressional Republicans are not fully up to speed on the enormously complicated tax issues that have to be resolved."

As Business Insider's Pedro da Costa wrote, Trump and his team like to talk about the fact that there hasn't been tax reform since 1986 when it done by President Ronald Reagan. There's a reason for this: Taxes are complicated, congressional Republicans have to serve a variety of interests and different businesses in their home districts, and there will be sharp rebukes from Democrats.

Gluskin Sheff's David Rosenberg harped on a similar theme in a note to clients on Monday. Rosenberg noted that it took Reagan five years to get his tax reform crafted and through Congress - and right now, there is "no one firm GOP plan for the initiative." This is compounded by the fallout from the healthcare fight.

"In any event, a leader with a sub-40% approval rating and who spent political capital on his failed 'repeal and replace' Obamacare bill, is not likely to have an easy time getting a tax bill through the Republican Party, where the schisms are wide as ever," Rosenberg said.