While Congress spent the morning passing the final tax bill, the centerpiece of President Trump's economic agenda, his top advisers huddled in the White House focusing on which policy to push forward next.
Three priorities dominated the discussion this morning, Hassett said: infrastructure, welfare reform and the opioid crisis. The White House sees an economic case for each of these initiatives. There's bipartisan agreement that America's roads, bridges, airports and other assets need a major face lift. Gary Cohn, one of Trump's top advisers who was a key White House leader on the tax bill, has been drawing up plans on infrastructure.
"If three years from now economic growth is what we think, then we're going to need more roads to move all of that stuff around and better rail," Hassett said.
But Republican leaders in Congress have sounded more interested in pivoting next to making major changes to America's safety net. House Speaker Paul D. Ryan (R-Wis.) brought it up again Tuesday during the tax debate.
“We are going to focus next year on people, on getting people from welfare to work," Ryan said.
Andrew Bremberg, head of Trump's domestic policy team, is already at work on plans to tweak welfare. From an economic perspective, the White House team believes too many Americans are sitting on the sidelines and not working. Despite an unemployment rate of just 4.1 percent — the lowest level since 2000 — the White House doesn't think the job market is as healthy as that figure implies.
Hassett said they are watching the employment-to-population ratio, a statistic that measures how many Americans are actually working. At the moment, that figure is 60.1 percent, about three points lower than where it was before the Great Recession, implying about 7.5 million American adults have dropped out of the labor force in the past decade. The White House thinks some will want to go back to work now that jobs are more plentiful.
"One of the good things a hot economy historically has done is it helps people acquire the courage to apply [for jobs] again," Hassett said. "When you apply and get rejected it’s really hard, harder than not applying for the job at all."
Trump's goal is to get the employment-to-population ratio much higher. Many economists, Hassett included, note that America's population is aging. As baby boomers retire en masse, the employment-to-population ratio would naturally go down somewhat, especially from the peak of 64.7 percent that was reached in 2000. The ratio has already climbed back from a low of 58.2 percent during the recession, but Trump wants it up more.
The White House believes the tax bill will usher in much stronger economic growth, which should provide a chance for more Americans to get jobs. It sees 2018 as a prime time to pull back welfare benefits and make people more self-sufficient, especially if growth, which has been above 3 percent the past two quarters, remains that high going forward, as Hassett expects. (Growth for 2017 is on track to finish the year at 2.5 percent, according to the Federal Reserve.)
"Before President Trump came in, he said we could get back to 3 percent growth and everybody said that's crazy, but I think it's happened," Hassett said. "Now the question is can we sustain it? I think the tax code is a great first step for that."
Solving the opioid crisis is also a part of the White House thinking on how to ultimately getting more people back to work. Americans, especially men in their 20s, 30s and 40s, have become so discouraged about job prospects in some parts of the country that they have turned to drugs, according to research by economists such as Alan Krueger of Princeton University. Trump adviser Kellyanne Conway is heading the initiative to combat the opioid epidemic. More than 33,000 people died of opioid-related overdoses in 2015, and the figures are expected to get worse.
"A strong economy makes it a lot easier to address problems," Hassett said.
The one thing the White House has not talked a lot about is bitcoin. The cryptocurrency that has surged from $1,000 in January to $16,300 now is capturing a lot of attention in the media, but Hassett said he had "not participated in any policy discussion about bitcoin."