White House: Trump's economic agenda could spark 3% growth through next decade
Key elements to make that happen are the new tax cuts, reduced regulation and a sweeping infrastructure plan, it says, but most economists are skeptical.
By KEN THOMAS and CHRISTOPHER RUGABERAssociated Press
WASHINGTON — The White House's top economist said Wednesday that the U.S. could achieve annual growth rates of 3 percent through the next decade if President Trump's policies on regulations and infrastructure are enacted.
The Council of Economic Advisers released its annual economic report, which praises the effects of the tax cuts and tax overhaul signed into law by Trump in December. The report forecasts an overall average annual growth rate of 2.2 percent through 2028.
But with the "full implementation of the administration's agenda," including the tax law, additional cuts to regulation and a sweeping infrastructure plan, the projected growth rate reaches 3 percent through the next decade, the report said.
The economic projections are more subdued than the bold predictions made by the president in recent months. Trump suggested in December he saw "no reason why we don't go to 4 percent, 5 percent and even 6 percent."
Yet even 3 percent growth for the next decade is much more optimistic than most independent economists' forecasts. Wall Street economists generally expect the administration's tax cuts will accelerate growth this year and next to between 2.5 percent and 3 percent. But they expect the impact to fade by 2020.
"It seems unlikely and inconsistent with recent trends," said Carl Tannenbaum, chief economist at Northern Trust, referring to the administration's projection.
The report forecasts that productivity will grow at a 2.6 percent pace in the next decade, above its average rate of 2 percent in the past 50 years. That's also more than double the rate in the past decade. Few analysts expect such a surge.
The report repeats the administration's estimate that the tax bill is expected to raise the average American's household income by more than $4,000. An estimate by the nonpartisan Tax Policy Center estimated the average household income would rise more than $1,600 in 2018 because of the tax cuts.
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