The White House took a victory lap Wednesday on the first anniversary of the GOP’s tax cut law, saying it’s responsible for the booming economy and predicting it’s more than just a short-term “sugar high.”
Kevin Hassett, chairman of the president’s Council of Economic Advisers, said strong capital spending and economic growth are proof that the good times can be sustained.
“We got exactly the growth affect we predicted last year,” he said.
He acknowledged that the deficit has increased this past year, but said it was expected since capital spending has been expensed.
“So we got a capital-spending boom underway, and everybody is expensing it,” he said. “But those machines are going to produce revenue and output in the future.”
And he said the “odds are close to zero” that a slump is in the cards for the future.
The $1.5 trillion tax cut package Republicans powered through Congress and President Trump signed last year slashed income tax rates on corporations and reduced them for most households.
In the wake of the changes, economic growth soared this year and jobless claims dropped to lows not seen in decades. Republicans say there are now more job openings listed than there are people seeking work.
Some analysts, though, have been warning of a downturn looming, saying this year’s strong economy was a result of businesses rushing to capitalize, but the effects are wearing off, and the gains didn’t boost the long-term bottom line for most Americans.
Mr. Hassett countered that while employers did focus on bonuses and benefits after the tax bill passed, wage increases have “picked up quite a bit.”
He said Mr. Trump is in favor of another round of tax cuts in 2019.
“I would hope that the sort of clear economic success of the tax bill would make it a non-partisan issue to extend things and maybe even try it again because it works so well,” he said.