The strongest quarter of growth the U.S. economy has seen in nearly four years was no mirage, the White House’s budget director said Friday.
Reacting to the 4.1 percent gain in gross domestic product, Mick Mulvaney, director of the Office of Management and Budget, said the Trump administration’s growth formula of tax cuts, deregulation and increased spending is working.
“We still think you’re seeing the residual benefits of what the president did when he first got here, most specifically the deregulatory agenda that we put in place,” Mulvaney told CNBC’s “Power Lunch.” “We think that as much as anything has driven up growth to this point, which is where we’re very confident that this is a sustainable thing. This was not a sugar high by any measure.”
He spoke hours after President Donald Trump and other White House officials also said the current growth level is likely to persist. The second-quarter expansion was the best since the third quarter of 2014.
As a candidate, Trump pledged growth of at least 3 percent and as much as 6 percent. His first year in office saw GDP rise 2.2 percent, the same level as the first quarter of 2018.
While Mulvaney said he thinks the lowering of regulatory barriers has had the biggest impact so far, he said it is the tax cuts that will help continue the momentum. In a sweeping bill passed in December, Congress slashed corporate taxes and reduced individual tax rates, albeit temporarily.
“For a variety of reasons, we don’t think you’re going to have a dramatic drop-off,” Mulvaney said. He added that had the number been, as some suggested, above 5 percent, “I’d have to come out here and say I don’t think we can do that again, but something like this, in the 3s and the 4s, is manageable again.”
“People are better off now than they were two years ago, because Donald Trump is president,” Mulvaney added.
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