Mnuchin: Goal is to pass tax reform by August

Associated Press

WASHINGTON

Treasury Secretary Steven Mnuchin said Thursday the administration is committed to getting major tax reform legislation through Congress by August. He predicted that President Donald Trump’s economic proposals will be able to boost growth significantly to annual rates above 3 percent.

Mnuchin said that tax reform is the administration’s top economic priority and the goal is to have a measure approved by the time Congress takes its August recess.

“We are committed to pass tax reform,” Mnuchin said in an interview on CNBC. “It’s going to be focused on middle income tax cuts, simplification and making [the U.S.] business tax competitive with the rest of the world, which has been a big problem.”

He said implementation of Trump’s economic program including tax cuts and deregulation would make growth in a range of 3 percent to 3.5 percent “very achievable.”

During the campaign, candidate Trump had set a goal of achieving growth, as measured by the gross domestic product, of 4 percent or better. The country has struggled through the weakest recovery in the post-World War II period in terms of growth, with GDP averaging annual gains of just above 2 percent in the seven years since the recession ended in mid-2009.

“We have underperformed where we need to be,” Mnuchin said. “We believe we can be competitive and get back to sustainable growth of 3 percent or more.”

The GDP grew by just 1.6 percent last year, and many forecasters are predicting growth this year at an only slightly better pace of 2 percent to 2.5 percent. Mnuchin said it would take time for Trump’s economic program to translate to faster growth. But he said positive effects would be realized by next year.

Mnuchin’s prediction of an August passage of a tax plan could prove optimistic given that House and Senate Republicans seem sharply divided over key elements of the program. GOP lawmakers in the Senate have expressed opposition to a House proposal to replace the current 35 percent tax on corporate profits with a border adjustment tax.