Tags: Trump Administration | mnuchin | deficit | government | spending

Mnuchin: US Govt Must Cut Spending, Shrink Deficits

Mnuchin: US Govt Must Cut Spending, Shrink Deficits
(FABRICE COFFRINI/AFP via Getty

Thursday, 23 January 2020 10:16 AM

Treasury Secretary Steven Mnuchin said on Thursday the U.S. government cannot sustain federal deficits growing at current levels and will have to slow the rate of spending.

As he acknowledged the administration of Republican President Donald Trump was considering additional tax cuts to stimulate the economy, Mnuchin blamed government spending - and Democrats in Congress - for the federal deficit.

In an interview with CNBC, Mnuchin said increased military and non-military spending was the cause of the deficits, not the tax cuts pushed through Congress by Trump in late 2017.

He said he remained convinced that those cuts would pay for themselves over a 10-year period. Yet economic growth rates have slowed this year as the benefits of the tax cuts fade and tariffs imposed on Chinese imports hurt American farmers and manufacturers.

Trump felt it was important to rebuild the U.S. military, but to get that done the administration had to agree with Democrats to increase non-military spending, Mnuchin said from the World Economic Forum in Davos, Switzerland.

"If you look at the increase in the deficit, a significant component of that is additional government spending," he said.

"There's no question we need to slow down the rate of growth of government spending because we can't sustain these deficits growing at these levels."

In a wide-ranging interview:

  • Mnuchin also said he does not believe there should be carbon taxes. He thinks companies can deal with climate issues on their own.
  • Mnuchin says climate is not a “doom and gloom” issue that will impact people in the next 10 years
  • Mnuchin says American business executives should still do business with Saudi Arabia, after a report on the kingdom's possible involvement in the hacking of Amazon CEO and Washington Post owner Jeff Bezos' phone.
  • Asked if U.S. chief executives should still be inclined to do business with the Middle Eastern nation, Mnuchin told CNBC: "Absolutely. We do a lot of business with Saudi Arabia." He declined to comment on reported allegations of the kingdom's role in the hack.
  • Mnuchin indicated that he still has hopes to eventually issue 50- or 100-year bonds even after the department announced last week plans to add 20-year debt. “There’s no question we want to look at expanding our borrowing capabilities,” he said.

© 2020 Thomson/Reuters. All rights reserved.

   
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Treasury Secretary Steven Mnuchin said on Thursday the U.S. government cannot sustain federal deficits growing at current levels and will have to slow the rate of spending.
mnuchin, deficit, government, spending
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2020-16-23
Thursday, 23 January 2020 10:16 AM
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