Trump’s tax cut growth is over. The Trump Administration pushed a $1.5 trillion tax cut through Congress in 2017 on the promise that it would spark sustained economic growth. While the tax cuts have goosed the economy in the short term, officials now concede they will not be enough to deliver the 3 percent annual growth the president promised over the long term. To produce that average growth rate for the next decade, White House forecasters say, the American economy would need additional rollbacks in labor regulations, a $1 trillion infrastructure plan and another round of tax cuts.
Trump’s tax cut growth is over. Getting those policies implemented would be highly unlikely, given a divided Congress and a ballooning federal deficit, which could limit lawmakers appetite to spend money on a new tax cut or infrastructure plan. But without those additional steps, the president’s economic team predicts in a report released that growth would slow to about 2 percent a year in 2026. That is the year when many of the individual tax cuts in the 2017 law are set to expire, essentially producing a tax increase for millions of Americans.
Most forecasters project economic growth of about 2 percent in the medium and long run for the United States, but that rate would fall far short of the heady promises that President Trump has made about his ability to fuel the American economy. Mr. Trump has predicted growth of as much as 5 percent, while has advisors have routinely promoted 3 percent as the new normal. Growth averaged just over 2 percent from 2010, the first full year after the Great Recession ended, through 2016, when Mr. Trump was elected.
Even if all the new measures were adopted, growth would slow over time but it would still stand at 2,8 percent at the end of the decade, the White House forecasters say. Mr. Trup’s Council of Economic Advisors outlined those projections in the annual report to the President.