Veteran financial guru and former Ronald Reagan adviser Larry Kudlow told Newsmax TV that President Donald Trump must quickly push tax-reform legislation through Congress in order to avoid disappointing voters and to bolster his own standing in the eyes of the American public.
“From the Trump standpoint, he needs wins. He's got to have first-year victories and the two biggest issues are healthcare and tax reform,” the radio talk-show host and CNBC senior contributor told "The Steve Malzberg Show."
Republican officials have said they don’t expect major tax reform until after the August Congressional recess. “That means it's going to take quite some time to realize any of these tax reforms, any of them, and I think that's going to damage the outlook for 2017, I think it's going to damage the stock market, I just think it's foolish to wait. So, my view is let's get it done fast. That's what we should focus on,” the Newsmax Finance Insider said.
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“You just have to understand how high the stakes are in economic and political terms. Trump needs Ws (wins) and the Congress should do everything it can to get him those Ws," said Kudlow — host of "The Larry Kudlow Show" and author of "JFK and the Reagan Revolution: A Secret History of American Prosperity," written with Brian Domitrovic and published by Portfolio.
“So, he must win. If he does, he's going to be in great shape politically, his own capital goes up. He'll be a stronger president for all the other things he's looking at such as infrastructure and border security," said Kudlow, who served as the Trump campaign's senior economic adviser.
Trump campaigned on a platform to reignite the stagnant U.S. economy with more jobs, tax cuts, less regulation and massive spending on roads, bridges and airports.
"First year, you got to win. Reagan, the whole first year was devoted to tax cuts and they got them done and they signed the bill in August. I fear that's not going to happen this year with Mr. Trump and the Congress,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
“If it's going to take longer to do healthcare, let it take longer, get a good product out. I think this is a pretty good bill by the way. It can be amended but the good should never be the enemy of the perfect," said Kudlow, who during the first term of the Reagan administration (1981–1985) was associate director for economics and planning in the Office of Management and Budget (OMB).
"But if it's going to take longer, then you've got to start thinking about your tax cut strategy and they may want to rethink their whole legislative strategy here of healthcare first, tax cuts second. That's what I would do,” he said.
Whether tax reform can be passed by the August recess on Capitol Hill is another issue.
Senate majority leader Mitch McConnell, in a recent nterview with Politico, would not commit to a timetable, saying lawmakers are faced with "some constraints." One is that health care legislation must pass or fail before a tax plan can be considered, he explained.
“But as the year goes on, the Trump confidence factor – which is also I think helping jobs – the Trump confidence factor will wane if we don't get the tax cut until late in the year or even 2018,” he said.
“What you want to do here is break through on business investment, which has been the worst performer, very little advancement frankly for 15, 16 years. But certainly during this recovery, business investment has suffered. People don't want to make long-term, five, seven, 10-year commitments," he explained.
“Our tax rates are too high, there are penalties for operating at home versus offshore, expensing for business investments should be made immediately. Those are the things. Why don't we just get that done?" he asked.
Meanwhile, U.S. employers added a robust 235,000 jobs in February and raised pay at a healthy pace, evidence that the economy remains on solid footing nearly eight years after the Great Recession ended, according to the Associated Press.
The unemployment rate dipped to a low 4.7 percent from 4.8 percent, the Labor Department reported Friday. More people began looking for jobs, increasing the proportion of Americans working or looking for work to the highest level in nearly a year.
February's job gains were boosted by 58,000 additional construction positions, the most in nearly a decade. That figure was likely enhanced by unseasonably warm weather in much of the nation.
In addition to beating consensus estimates of 190,000, the job creation came in some unusual places, with construction and manufacturing leading the way.
“I just call it a ‘good’ report. It's not spectacular, but it's good. The economy is not in recession and it's not in danger of recession,” he said.
Larry Kudlow is a senior contributor at CNBC. His new book is “JFK and the Reagan Revolution: A Secret History of American Prosperity,” written with Brian Domitrovic.
To find out more about Larry Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com
(Newsmax wire services contributed to this report).
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