Reuters
Treasury Secretary Steven Mnuchin testifies before a Senate Finance Committee
- Treasury Secretary Steven Mnuchin said Wednesday that a $1.5 trillion Republican-led tax cut package would still pay for itself through higher economic growth.
- The comments came even as a coronavirus outbreak raised concerns about a potential downturn in the US and elsewhere.
- Republicans have argued tax cuts would bolster enough growth to make up for steep losses in government revenue.
- Nearly every major independent forecaster has disputed that claim.
- Visit the Business Insider homepage for more stories.
Treasury Secretary Steven Mnuchin said Wednesday that a $1.5 trillion Republican-led tax cut package would still pay for itself through higher economic growth, even as a coronavirus outbreak raised concerns about a potential downturn in the US and elsewhere.
At a hearing before a House subcommittee, Mnuchin was pressed on the longstanding claim that the 2017 Tax Cuts and Jobs Act would bolster enough gross domestic product growth to make up for steep losses in government revenue. Nearly every major independent forecaster has disputed that claim.
"Here's the good news, this is just math," Mnuchin said, adding that the Treasury Department had "internal projections" that showed the economy was on track to grow at the pace necessary for tax cuts to break even.
The comments came even as the respiratory illness COVID-19 sparked concerns about the global economy. Economists have dimmed growth forecasts for the US even as central banks and governments scramble to soften the blow of travel restrictions and shuttered factories.
Mnuchin acknowledged that the disruptions would affect the US economy but added that he expected a recovery in the short term. But even before the outbreak, annual GDP had consistently fallen short of the 3% target set by the White House.
"This is an issue that's going to affect the next year," Mnuchin told a House subcommittee on Wednesday, referring to COVID-19. "It's not a longer-term impact."