Mnuchin touts ‘meaningful impact’ of tax cuts on US economy

Despite renewed concerns about a sharply rising deficit in the U.S. after the Congressional Budget Office reported it could surpass $1 trillion by 2020, Treasury Secretary Steven Mnuchin remained adamant the 2017 Tax Cuts and Jobs Act would pay for itself over a 10-year period.

“When we say the tax cuts pay for themselves, that’s looking at what would the government revenue be before and after tax cuts?” Mnuchin told FOX Business’ Liz Claman during an interview on Thursday. “That has nothing to do with spending. We started with a deficit before we had the tax cuts, we’re now spending more money that will create a bigger deficit. That’s a spending issue, not a revenue issue.”

The CBO projected the federal deficit would hit $804 billion in fiscal 2018, a 21% increase from 2017. But to calculate that number, the CBO assumed GDP growth would be at 2%, Mnuchin said, while the Trump administration is anticipating a more-robust rate of growth at 3%.

That’s in large part to Republicans’ tax overhaul legislation, the biggest since the era of Ronald Reagan, which slashed the corporate tax rate to 21% from 35% in order to incentivize American companies to invest. And while Mnuchin said he anticipates revenue to drop in the short-term -- the tax cuts also temporarily lowered individual taxes until 2025 -- he viewed it as an “investment in the economy” that would be bolstered by corporate growth.

“We’d 100% stand by what we did,” Mnuchin said. “That’s what’s going to create the economic growth. This is the most important issue for creating economic growth in the united states. I think our debt to GDP is very sustainable.”