Trump tries to move forward after major setback in Congress

ABC News' Jon Karl and political analyst Matthew Dowd analyze what went wrong for the Trump administration and House Republicans in losing on health care and the impact the loss may have on Trump's presidency.
2:41 | 03/27/17

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Transcript for Trump tries to move forward after major setback in Congress
to you. Your teammate Jonathan Karl here. We've got political analyst Matthew dowd with us here this morning. Jon, first the big picture. You remember a week before election day then candidate Donald Trump saying reming and replacing Obamacare one of the single most important issues why we must win and great health care at a tiny fraction of the cost. So easy. How big of a defeat is this? A devastating blow not only because he fails to keep a key campaign promise but puts in question the rest of the trump agenda. Can he get anything passed if he couldn't do this? Can he even keep the government running which runs out of funding on April 28th. This gives trump a chance to become the transformational president that he wanted to be, because the only way out of this is to find a way to work with Democrats. There is no longer a Republican working governing majority. He could reach out to Democrats on drug price, on infrastructure, even on closing special interest tax loopholes. You believe the defeat gives them that excuse. It gives him a chance to do it. Democrats smell blood and trump has gone in the opposite direction so far. Quick question on the millions who depend on Obamacare. They heard it survived and Bried a sigh of relief and hear president trump say we'll let it explode. So, Obamacare is the law of the land. That means the people depending on the subsidies will continue. Medicaid expansion continues but all the problems with Obamacare won't get addressed either. Let's bring in Matt. As you know the big pivot, the president will push for tax reform. Won't this make it even harder now? Absolutely, David. I mean the health care reform was a building block that he needed for all his other parts of his plan, tax reform, infrastructure, his budget was that was a key building block. That's been removed and falls down I think Democrats will have a hard time not only because of their base but because they feel like they got a victory to go along with tax cuts that are primarily aimed at the rich. I think it's going to be really hard for Donald Trump to make that bridge on that particular piece of legislation. Matt, just a few seconds left. You heard Jon go out an a limb saying it could be a transformational president. How willing will the Democrats be willing to help on any legislative victory. I think it's hard and their base is very much against Donald Trump and I think Donald Trump would fundamentally have to change as a person to be able to do that. I would think -- he needs to channel Michael Jackson which is I'm starting with the man in the mirror, needs to tick Tay hook at himself and make a change. That's what he needs to do. He needs to start the process by changing who he is. The first time anyone has put it that way. Matt dowd, Jon Karl, here with us, thanks. Russia, mass demonstrations

This transcript has been automatically generated and may not be 100% accurate.

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