President Donald Trump and Republicans should be leading reform efforts with tax cuts before the "swamp of healthcare," and to "get away from worshipping the Congressional Budget Office" and its concerns about the matter, according to Forbes Media CEO and former presidential candidate Steve Forbes.
"They should go with a big tax cut, as [Ronald] Reagan did in the early 80s, and then go on to healthcare," Forbes told CNN's "New Day" Thursday. "People have to feel the economy is getting better ... Republicans will be in big trouble next year. Go for a big tax cut now. The heck with the CBO ... the daily horoscope gives you a better outlook than the CBO does. You have to deliver."
Forbes termed this week's election in Kansas as a "warning shot across the bow" for Republicans, who pulled out a slim win with Rob Estes, who was chosen to replace now-CIA Director Mike Pompeo in the House by just a seven percent margin.
When Pompeo was seeking the fourth district seat in November, before Trump appointed him as CIA director, he held a 31-point margin. Estes also narrowly lost the district's most populous county near Wichita to Democratic opponent James Thompson, a political newcomer, even though Trump won in that county by 18 points.
Meanwhile, Trump has said that now he respects Federal Reserve Chairwoman Janet Yellen, but Forbes said that doesn't guarantee she'll remain in her job.
"That depends on the end of the year," said Forbes. "If the economy is doing well, he might be in the mood to keep her. One thing the Federal Reserve has done and gotten little recognition is what it has done with the interest rate policy, hurting lending to small businesses. The so-called raising of interest rates is not a tightening. It is allowing the credit markets to come back to life for those who were not getting credit."
Letting the credit markets come back to life is a "good thing," Forbes continued.
"It's not how you get there, it is how you deliver the results of the strong economy," Forbes said.
Forbes also responded to Trump's comments to The Wall Street Journal about China not being a currency manipulator, and about the dollar now being "too strong."
"I think our dollar is getting too strong, and partially that's my fault because people have confidence in me," Trump said. "But that's hurting, that will hurt ultimately. It's very, very hard to compete when you have a strong dollar and other countries are devaluing their currency."
The comment underscores that the dollar either being too weak or too strong is not good, said Forbes.
"We have to stabilize the thing," said Forbes. "It hurts investment."
Meanwhile the border adjustment tax "the crazy House Republicans are pushing" depends on a strong dollar "to undo the damage of that. Wacky economics. What the president is saying is he is not going to buy into the border tax because of the supposition it will make the dollar stronger. That's good news."
But whenever a president says something, it has an impact, said Forbes.
"I hate to say this as a Republican, but one of the huge mistakes from the Bush administration was weakening the dollar in the early 2000s."
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