US economists fret over Trump policy agenda
WASHINGTON: US business economists worry about the prospects for President Donald Trump’s policy agenda, and the potential damage to the economy from his trade and immigration policies, according to a survey released yesterday.
The survey findings add to Trump’s accelerating alienation with the business community. CEOs fled his advisory councils last week to distance themselves from his both-sides-are-to-blame response to a white supremacist rally in Virginia in which, one woman among a group of counter-protesters was killed.
Although the survey was completed more than a week prior to the those events, they reflect growing concerns among businesses that had been cheered since the election about the possibility of seeing tax reform and infrastructure spending that could boost the economy.
“I do think that is some of the concern, that everything that has transpired recently, especially over last week, may impair the administration’s ability to get its legislative agenda passed,” said Frank Nothaft, a policy analyst with the National Association for Business Economics (NABE).
Stressing that he was not speaking for the NABE panelists in the semi-annual policy survey, Nothaft told AFP that the administration has a number of very important legislative proposals that could stimulate growth and boost spending.
However, “with everything that’s transpired it puts that legislative agenda at jeopardy. Will anything get passed?”
While the survey showed most economists judge fiscal policy to be “about right” currently, they’re “quite pessimistic about prospects for ‘meaningful, revenue-neutral tax reform’ in the near term”, the survey showed.
Conducted 18 July to Aug 2 with 184 members, the survey showed only a 10% probability of such legislation this year and a 15% (median) probability of passage in 2018.
Over half the respondents said tax reform could add less than one percentage point to real GDP growth over the next 10 years, while a third put the impact on growth at between one and two percentage points.
On monetary policy, Nothaft said the survey shows economists now have a “much stronger belief” compared to six months ago that the Federal Reserve will raise the benchmark interest rate one more time this year.