Thursday, November 23, 2017
Politics

Budget director says details of Trump tax plan won't be ready until June

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WASHINGTON — The White House will offer "specific governing principles" for its tax plan this week along with indications of what new rates would be, but a complete proposal probably won't be ready until June, President Donald Trump's budget director said.

Trump said in a Twitter post Saturday that tax reform and reduction would be announced this week.

"What you're going to see on Wednesday is for the first time is, here's what our principles are, here are some of the ideas that we like, some of the ideas we don't like, and we can talk about that more if you want to. Here are some of the rates we're talking about," Mick Mulvaney, director of the Office of Management and Budget, said on Fox News Sunday.

Asked about his previous comments that the full plan with bill language probably won't be released until June, Mulvaney said "that's still probably fair." The administration has started working with House and Senate committees "as we try and build some momentum for this tax plan."

Mulvaney said the administration hasn't decided whether its plan will be revenue-neutral, which would be needed to meet the criteria set by lawmakers to make tax changes permanent, or will add to the national debt.

"You can either have a small tax cut that's permanent or a large tax cut that is short-term," Mulvaney said. "I don't think we decided that. But you'll know more on Wednesday."

Other senior White House officials have signaled that the administration is more concerned about growth and job creation than revenue neutrality.

Trump has said an overhaul of the tax code is one of his biggest priorities, but top advisers have refused to provide details so far of how he will usher in the biggest tax cut in U.S. history — which he has promised — without piling on trillions of dollars in new federal debt.

Trump has said cutting taxes will grow the economy, lead to more hiring, and bring trillions of dollars back into the United States that companies are now holding overseas to avoid taxation. Among the administration's stated aims are to simplify the tax code for individuals and families, lower corporate tax rates, and provide a major tax cut for the middle class.

Budget experts have forecast that Trump's proposal could boost the economy but also dramatically expand the deficit because trillions of dollars in revenue would be lost over 10 years.

Treasury Secretary Steven Mnuchin, asked about the deficit impact of the tax plan, said Saturday that when they account for the economic growth that would occur because of the tax changes, the tax overhaul "will pay" for itself.

Mnuchin, at an International Monetary Fund event in Washington, also said that if these macroeconomic changes aren't factored in, the tax plan would grow the deficit. An analysis that doesn't factor in economic growth forecasts is called a "static" assessment.

"Under static scoring, there will be some short-term issues," said Mnuchin, one of the plan's key architects.

Factoring in the macroeconomic impact of tax cuts is controversial because it's very difficult to do. A number of conservative budget experts — including key congressional aides who write tax law — have said the White House has an overly rosy view on what the economic impact of their tax cuts would be.

The deficit impact of tax cuts is vitally important because any plan that grows the deficit over the long term is much more difficult to pass through Congress. It would take a number of Democrats to support any tax plan that grows the deficit in the long run because Republicans only have 52 seats in the Senate. They would need at least 60 votes to get such a tax measure through. A tax plan that increases the deficit only in the short term only needs a majority Senate vote.

Information from Bloomberg News and the Washington Post was used in this report.

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