Treasury Secretary Steven Mnuchin did his best Friday morning to remind America of how well the economy is doing, touting “higher growth, moderate inflation, lower unemployment.”
Mnuchin walked into the Ritz-Carlton Hotel on a red carpet to speak to a packed room of economists and business leaders at the Economic Club of Washington. This was supposed to be a triumphant moment for Mnuchin, fresh off a major victory on the largest rewrite of the tax code in 31 years and presiding over a hot economy, yet Trump's latest comments and tweets dominated chatter in the room. Mnuchin ignored the controversy.
“I think we couldn’t be more pleased,” Mnuchin said of the president's first year and the passage of the GOP tax bill.
He went on to say Trump “loves being president” and even the president's liberal critics in Hollywood have to acknowledge how well the economy is doing under Trump.
“A lot of people who were skeptical [of Trump] have come around after seeing the economic plan and seeing what this has done to the economy and markets,” a relaxed Mnuchin said.
Treasury is using a 2.9 percent estimate for economic growth in its models. Mnuchin predicted “we can get much higher” in the coming years as the tax bill, which dramatically reduced corporate taxes, makes the United States more competitive. (The Federal Reserve is forecasting 2.5 percent growth this year and 2.1 percent in 2019).
Mnuchin did not take any questions from the audience or reporters during the 45-minute talk. David Rubenstein, a private equity titan and friend of Mnuchin's, engaged the Treasury Secretary in a friendly back and forth that never touched on immigration at all, let alone Trump's comments that have drawn global condemnation and rebukes from some in his own party.
Mnuchin has been a loyal aide to the president since the earliest days of his campaign. He hosted Trump for dinner at his Los Angeles home shortly before the president decided to jump into the Republican primary and went on to become Trump's campaign finance chair, traveling with him frequently on the campaign trail. Despite many of Mnuchin's friends, including Rubenstein, telling him Trump would never win, Mnuchin says he was "100 percent convinced” Trump would triumph in the election.
While some White House sources have told reporters Trump is unable to focus, Mnuchin portrayed the president as highly engaged and active, especially on the economy.
“The president was unbelievably involved [in tax reform]," Mnuchin said Friday. “For the last year, he called either Gary [Cohn] or I or both of us every single day.”
“It's the economy, stupid” has been the top wisdom in Washington political circles for years. The belief is that if politicians focus on getting more jobs for people and fatter profits for corporations, then he or she will be beloved. Trump is bucking that trend. Despite presiding over the best U.S. economy since the dot-com era, his approval rating is below 40 percent.
The White House has touted the president's economic success repeatedly in recent days. Press secretary Sarah Huckabee Sanders has tried to turn her daily press briefings back to economic news, talking about how Walmart would raise its starting hourly wage to $11 (up from $10 now after a worker gets trained). Walmart was the first major retailer to announce an actual wage increase after the tax bill, although some have pointed out Walmart simultaneously announced it would close 63 stores and rival chain Target is already paying its workers at least $11 an hour.
It is a key conundrum facing the Trump Administration: Americans clearly feel better about the economy than they did a year ago, but Trump's approval rating remains low, and he is not even getting full credit on the economy. A Quinnipiac poll out this week found 66 percent of Americans now say the economy is “excellent” or “good,” the most positive reading since the poll began asking that question in 2001, yet nearly half of America (49 percent) credits former president Barack Obama for the uptick. Only 40 percent credit Trump.
Americans appear to be judging this president far beyond pocketbook issues. In the same Quinnipiac poll, which Trump tweeted out, 56 percent of voters gave the president a “D” or “F” grade for his first year in office, with many calling the first year a “disaster.”
Even on tax bill, which Mnuchin heralded as a big win, there are concerns about mass confusion over the new laws. Treasury released new withholding tables this week that are supposed to help businesses figure out how much taxes to take from worker paychecks. Businesses have until February to adjust withholding, but the new law makes so many changes that many workers will need to double-check on their own that they are not over or under paying by a lot.
Mnuchin said implementing the tax bill is his No. 1 priority, and he even called for Congress to give the Internal Revenue Service (IRS) more money to help improve computer systems and hire more workers.
“We are speaking with Congress about getting additional funding for the implementation. We expect we would hire a significant number of people to help with the implementation,” he said.
Democrats say the Trump Administration has rushed this through without careful thought and many Americans will end up owing more taxes, a nasty surprise in April 2019 when this year's taxes are due. Mnuchin dismissed that as partisan criticism.
Despite the economic rebound, Democrats are feeling increasingly confident heading into the 2018 election that this is going to be “their year.” They think voters are fed up with the chaos in the White House and Trump's behavior, and that will matter more when voters enter the polls than the level of the stock market or how many jobs there are.
“President Trump’s comments are racist and a disgrace. They do not reflect our nation's values,” House Democratic Whip Steny H. Hoyer (D-Md.) said.