Larry Kudlow, the former economic adviser to President Ronald Reagan, said the Trump administration needs to sharpen its focus and message on a tax plan that will win quick approval in Congress and help to boost the economy.
“You can't do everything all the time all at once. You have to lay out some priorities,” Kudlow said on CNBC in a discussion of how political pressures are shaping President Donald Trump’s policies. “You're not going to get it on tax reform that includes everything. Go for what you can get.”
Trump’s first 11 weeks in office have included executive orders to remove some of President Barack Obama’s restrictions on the energy industry and government contractors, while pushing for cost savings in the executive branch. But a Republican plan to change the Affordable Car Act, also known as “Obamacare,” was withdrawn amid strife within the party.
Kudlow said the White House is going through the growing pains that accompany new administrations, and that Trump needs to hone his message on tax cuts that will pay for themselves as the U.S. economy grows.
“They’re all new to the game. Mistakes are made. I get this. We did this in the Reagan years. Nothing is perfect,” Kudlow, who also was an economic adviser to the Trump campaign, said. “They have to consolidate a Trump position, and got to go in and negotiate.”
In going through budget reconciliation talks, Congress doesn’t have to accept the Congressional Budget Office’s forecast that shows a tax cut will trigger deeper deficits and meager economic expansion, Kudlow said. The U.S. economy has grown by 3.2 percent a year on average since 1947, but never exceeded 3 percent during the Obama administration.
“CBO says 1.8 percent growth for the next 10 years. In other words: lower tax rates have no impact. Nonsense,” Kudlow said. “If I take that up to 3 percent, which is below our historic average, you know how much money I make? $4.5 trillion. That is the mother of all pay-fors.”
Created by the Congressional Budget Act of 1974, reconciliation allows for speedier consideration of certain tax, spending and debt-limit legislation, according to the Center on Budget and Policy Priorities. Reconciliation bills aren’t subject to filibuster in the Senate, and the scope of amendments is limited.
Kudlow’s forecast uses a “dynamic” model that predicts tax cuts will help the economy grow as the private sector finds better uses for its money than the government can.
“The main guy here is Senator Mike Enzi, chairman of the Senate Budget Committee,” Kudlow said. “All he has to do is stick dynamic estimates into the reconciliation package, and you're done. I want the White House to raise that point publicly so this can get done.”
© 2025 Newsmax Finance. All rights reserved.