Trump concedes there will be no new tax cut ahead of midterms
President Donald Trump repeated Monday that he plans to offer a new tax cut plan before the midterms, even though no one seems to know what it will look like or how it might get through a Congress that only barely managed to pass his signature plan last year.
“We’re putting in a resolution sometime in the next week-and-a-half or two weeks,” Trump told reporters on his way to a campaign rally in Houston for Texas Republican Sen. Ted Cruz, his latest stop in a nationwide barnstorming tour to keep both chambers of Congress in Republican control.
The GOP has tried to make tax cuts and the booming economy a key selling point to voters. The President said the new plan would focus on middle-class Americans, as opposed to businesses, which were one of the main beneficiaries of his first tax cut.
“This is not for business. This is for middle. That’s on top of the tax decrease that we’ve already given,” he added.
Yet he acknowledged there would not be time for Congress to vote through new tax cuts before the November 6 vote.
“I’m going through Congress. We won’t have time to do the vote. We’ll do the vote later. We’ll do the vote after the election,” he said.
That’s after he told reporters on Saturday that Republicans would unveil a new package “sometime just prior, I would say, to November.“
The president, who didn’t offer any specific details on his proposal over the weekend, left many in Washington befuddled over the surprise remark.
“Trump may be getting ahead of himself on this one,” said Kyle Pomerleau, an economist at the Tax Foundation, a non-profit think tank in Washington.
Representatives from the Treasury Department and the White House Council of Economic Advisers did not respond to repeated requests for comment by CNN. A spokeswoman for House Speaker Paul Ryan referred questions to the White House.
Rob Damschen, a spokesman for Rep. Kevin Brady, chair of the House Ways and Means Committee – the lead taxwriting body in Congress — referred questions to the White House on details of the president’s remarks.
“I can tell you there is continued interest in building on the success of the Tax Cuts and Jobs Act and constantly improving the tax code for hardworking families and America’s small businesses,” Damschen said in a statement.
A senior GOP congressional source told CNN that “there’s no serious plan at the moment” with Congress out of session, but added maybe there is a “little discussion.”
Lindsay Walters, a White House spokeswoman, said the President would like to see yet another tax cut for the middle class as part of the Trump administration’s so-called “tax reform 2.0” plan. The first piece of the second wave of tax change was passed in September by the House, which included making individual tax cuts currently set to expire in 2025 permanent. The Senate has yet to take up the legislative proposal.
“As part of Tax Reform 2.0, the first elements of which were passed the House in September, the President would like to see an additional tax cut of 10% for middle-income families,” Walters said in a statement.
The President’s sudden mention of a tax plan echoed Trump’s push in April 2017 to generate a tax cut proposal ahead of his 100th day in office, resulting in the release of a much-criticized one-page outline — though that summary was later written into the tax bill passed in December.
Treasury Secretary Steven Mnuchin said in an interview with The New York Times on Sunday that he had been actively working on a plan with Brady, that would be unveiled “shortly.”
“This is specifically focused on the middle class and not beyond that,” Mnuchin said in the interview.
He did not offer any further details of what such a tax plan would entail or how it would be paid for.
Mnuchin noted that any plan in the works would be “different” than a bill that passed the House in September to make individual tax cuts permanent.
A big unknown is how the Trump administration plans to pay for yet another tax cut. Last year’s $1.5 trillion tax cut is anticipated to add $1 trillion to the nation’s deficit. The administration insists that the tax cuts will pay for themselves.
Last week, the Treasury Department released figures showing the federal budget deficit grew by 17% in the 2018 fiscal year, to $779 billion.
Jason Furman, an economist and professor at Harvard University’s Kennedy School of Government, offered a ballpark estimate following the President’s remarks, suggested a 10% income tax cut might cost nearly $2 trillion over the next decade.
The former top economic adviser under President Barack Obama noted, however, the exact details will depend on the details.