White House optimistic on economy
Economist says 3% growth in sight if agenda implemented
WASHINGTON — The White House’s top economist said Wednesday the U.S. could achieve annual growth rates of 3 percent through the next decade if President Donald 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 implementation of 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 effect to fade by 2020.
“It seems unlikely and inconsistent with recent trends,” Carl Tannenbaum, chief economist at Northern Trust, said, referring to the administration’s projection.
Federal Reserve officials have a similar view. Robert Kaplan, president of the Federal Reserve Bank of Dallas, said Wednesday that the economy will likely expand just
1.75 percent to 2 percent in 2020.
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.
The report says Trump’s “progrowth policy agenda,” including the tax cuts and efforts to cut regulations, “have inspired enormous confidence in the economy and optimism that it will continue thriving.”