Newspaper article Charleston Gazette Mail

Is Trumps 100-Day Mission Possible? ; President-Electseconomic Plan May

Newspaper article Charleston Gazette Mail

Is Trumps 100-Day Mission Possible? ; President-Electseconomic Plan May

Article excerpt

WASHINGTON Donald Trump, it seems, embraces the old dictum: Make no small plans. Already, hes published an agenda for his first 100 days in office, recalling Franklins Roosevelts launching of the New Deal. Not surprisingly, near the top of Trumps to-do list is a pledge to double economic growth from its recent desultory rate of 2 percent a year to 4 percent through massive tax cuts, the relaxation of government regulations and measures that curtail imports.

Who might frustrate Trump?

How about: Donald J. Trump.

A huge contradiction sits at the core of his economic agenda. He wants faster economic growth (who doesnt?), but his proposed policies would also elevate economic uncertainty and uncertainty hurts growth.

If the president proposes deep tax cuts, what will Congress enact? Who will benefit, who wont? The same uncertainty applies to regulatory cutbacks and anti-import policies. Until the outlook clarifies, businesses and households postpone some spending. Growth suffers.

Of course, theres always some uncertainty. What makes this different is the breadth of Trumps proposals. He advocates wholesale upheavals of existing policies.

For example, his proposed tax cut would radically transform the income tax. It would have only three rates (12, 25 and 33) as opposed to todays seven rates. Its cost over a decade, according to the nonpartisan Tax Foundation, would be between $4.4 trillion and $5.9 trillion, equal to about 11 percent to 15 percent of present tax revenues over 10 years.

Or consider his trade plans. Trump isnt pushing marginal changes. He wants to renegotiate the North American Free Trade Agreement, which could dramatically shift trade flows with Mexico and Canada. (In 2015, these two countries absorbed $605 billion of U.S. exports and supplied $642 billion of imports.)

Much is unknown. On regulations, Trump would cancel every unconstitutional executive action, memorandum and order issued by President Obama, a sweeping commitment whose actual effect is ambiguous.

These and other controversial proposals (on immigration and Obamacare, for instance) will inspire ferocious lobbying. As long as matters are unsettled, business managers and, probably, consumers may delay spending when they can. …

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