President Donald Trump's escalating feud with retiring Senator Bob Corker could bring tax reform efforts to a screeching halt.
The Tennessee Republican who announced in September he won't seek reelection over the weekend engaged in a war of words with Trump after he attacked him early Sunday morning on Twitter. The spat could imperil already-precarious efforts in Congress to pass a 2018 budget, a necessary precursor for moving the ball forward on a tax bill.
"Tax euphoria could break this week," warned Cowen analyst Chris Krueger in a Monday note, citing the Corker-Trump "Twitter-tantrums in breach."
"Without budget, tax is dead," Krueger wrote. "Full stop."
The House of Representatives passed its 2018 budget plan last week. The Senate could pass its budget next week (this week it's out for Columbus Day recess). But the plans will be different -- the House budget calls for deficit-neutral tax reform and $203 billion in mandatory savings, and the Senate budget calls for a $1.5 trillion net tax cut -- meaning legislators will have to hammer out an agreement between the two and pass a consensus budget again.
That's assuming the Senate budget passes, which is not guaranteed -- especially with the Corker-Trump feud.
The president on Sunday morning attacked Corker in a series of tweets. He claimed Corker "begged" him for his endorsement and decided against running for reelected after he declined. Trump also said Corker, who is chairman of the Senate Foreign Relations Committee, is responsible for the "horrendous" Iran deal.
Corker subsequently responded on Twitter. "It's a shame that White House has become an adult day care center," he wrote. "Someone obviously missed their shift this morning."
In a candid interview with the The New York Times published later in the day, Corker charged that the president was treating his office "like a reality show" and warned he could set the nation "on the path to World War III."
"I know for a fact that every single day at the White House, it's a situation of trying to contain him," he said.
Krueger called the back-and-forth "one of the more surreal public correspondence exchanges" in recent history.
"Either Trump realizes that Corker can sink the remainder of the Trump/GOP legislative effort and is upset by that reality, or he didn't/doesn't know and just made it a reality," he wrote. "Either way, we see ZERO upside for the budget process/tax reform in this Twitter-tantrum with the policy downside limit-down."
There are 52 Republicans in the Senate, and passing a budget requires 50 votes. No Democrats are expected to vote in favor of the budget, and Senator Rand Paul (R-KY) is expected to vote no because the proposal doesn't cut spending enough. Senator John McCain (R-AZ), who was one of three GOP Senators to torpedo healthcare legislation efforts, seems like he will vote no as well. And that leaves room for only one more defection.
Corker told NBC's Chuck Todd earlier this month he wouldn't agree to add "one penny" to the deficit, throwing a wrench in the Senate's plan that adds $1.5 trillion over a decade. And that was before his war of words with Trump.
"...[T]he margin for error in the Senate is already perilously slim for tax reform and the president's comments undoubtedly hurt that push," Compass Point analyst Isaac Boltansky wrote in a Monday note.
More of What's Trending on TheStreet: