This week the Senate confirmed Steve Mnuchin to serve as the next Treasury Secretary, and the message to struggling American families couldn’t be any clearer — help is on the way.
Contrary to Slate economics correspondent Jordan Weissmann’s assertion that President Trump “inherited a reasonably strong economy” and “has started off his term in office on the economic equivalent of the bunny slope,” to Americans outside of the liberal blogosphere, it’s obvious that President Trump inherited an economy that is perilously slow.
Of course, when Slate produces economic analysis, they’re not sending us their best, they’re sending us analysis with a lot of problems.
According to the most recent estimate, 2016 U.S. annual GDP growth was a mere 1.6 percent — making last year the worst year for economic growth in 5 years.
To put the sluggish state of our economy into perspective, the post-World War 2 average annual growth rate is around 3 percent, roughly double the pace our economy expanded last year. And again, 3 percent was only the average growth rate, which President Obama was never able to achieve during the duration of his presidency. The U.S. is now in the midst of a record-setting 10 years of below-average growth.
Enter Secretary Mnuchin. In an interview with CNBC, Mnuchin stated, “Our most important priority is sustained economic growth, and I think we can absolutely get to sustained 3 to 4 percent GDP, and that is absolutely critical for the country” (emphasis added).
Not only does Mnuchin have his finger on the pulse of the U.S. economy, he also has a plan to resuscitate it. Mnuchin said that to restore 3 percent-4 percent growth, “our number one priority is tax reform. This will be the largest tax change since [President Ronald] Reagan.” The economic impact of Reaganesque tax reform is especially apparent considering last year it took Americans 114 days to pay off our total $4.99 trillion tax bill, and Americans spent more money on taxes than they did on food, housing and clothing combined.
Mnuchin clearly views tax reform as vital to restoring skyrocketing economic growth — which means his confirmation couldn’t be timelier. President Trump has promised to introduce ‘Big-League’ tax reform in the coming weeks, meanwhile the House GOP border-adjustability provisions have served as a distraction from our urgent need to reform the tax code. The skepticism over the proposed border-adjustability provision is also said to be shared by some in the Trump administration. As Treasury Secretary, Steve Mnuchin will play a pivotal role in navigating these waters, and designing a tax plan that delivers on the promise of greater economic growth.
While there are differences to iron out, there are far stronger signals that the administration and Congress are prepared to deliver on transformational tax reform. Ways and Means Chair Kevin Brady pledged “a daily, coordinated, intensive effort to move tax reform” in response to Mnuchin’s confirmation. Congressman Brady’s commitment to work with the administration, and Secretary Mnuchin’s extremely vocal support for tax cuts, are promising signs that America’s growth slump could soon be winding down.
As Donald Trump stated in The Art of the Deal, “The worst of times often create the best opportunities to make good deals.” After a decade of below-average economic growth, it’s time to make the good deal on tax reform.
Jonathan Decker is the Chief Economic Correspondent for TheNationalPulse.com.
