A Risky Delay on Taxes
Bad news: Congress is putting tax cuts on the back burner for now — a big risk. House Speaker Paul Ryan says lawmakers will focus first on replacing ... er, “repairing” ObamaCare and on President Trump’s infrastructure plans, and only take up tax bills sometime in the spring.
That means Trump won’t be able to sign anything until before the fall — at the earliest, no other delays pop up.
Yes, the president’s early moves on deregulation and energy should boost growth, and a few industries are salivating at the thought of big infrastructure spending.
But Trump also clearly means his promises on trade and immigration, too — which has other industries nervous.
The absence of any big supply-siders in the president’s economic team is further cause for concern, as is the way the White House has taken to talking about “tax relief ” rather than “tax reform.” The hunger for some details — will the cuts be retroactive to Jan. 1? — adds to the uncertainty, which is always bad for business.
Yes, the Dow is up, thanks to optimism over the Trump program. But major tax cuts were a big part of that program — and if they don’t land in good time, or turn out not to be major, pessimism can quickly return.
If Hillary Clinton had won, the US economy would probably be facing recession soon: The Obama recovery, weak though it is, has been going on that long. It’s going to take serious change to produce a boom.
Recall the early 1980s: President Ronald Reagan got his tax cuts passed, but allowed years for them to phase in. The economy didn’t take off until 1983 — and hit recession first. In ’82, Republicans lost 26 House seats.
Similar results in 2018 could make Nancy Pelosi the speaker — and block any further reform, while empowering Democrats to launch endless investigations to gum up the Executive Branch and feed the press a heavy diet of administration “scandal.”
Above all else, Trump promised “jobs, jobs, jobs,” and the American people expect him to deliver. If he doesn’t, they’ll start looking elsewhere for answers.