(Bloomberg) -- Treasury Secretary Steven Mnuchin said an overhaul of the tax system, regulatory reform and better trade deals will help produce 3 percent U.S. economic growth within two years.
Returning health in the U.S. job market, a 12 percent rise in stock prices since Trump’s election and consumer sentiment at the highest in 16 years are painting an optimistic picture of the economy. Even so, the economy expanded at its slowest pace in three years at 0.7 percent in the first quarter-- underlining the challenges of an administration aiming for 3 percent or higher annual growth.
It’ll probably take two years to reach 3 percent growth “and then we can have a sustained level,” Mnuchin said in a conversation with Fox Business Network editor Maria Bartiromo at the Milken Institute Global Conference on Monday in Los Angeles.
The Trump administration has placed an overhaul of the tax system -- describing it as the biggest reform in history -- at the top of its legislative agenda. A blueprint released last week includes proposals to slash taxes for business and individuals, simplify the system for filers and close loopholes for the rich, relying on faster economic growth to offset the losses from tax cuts. The goal is for a tax-reform package to be signed into law this year.
The tax plan is “our version” of a job creation bill, Mnuchin said.
The difference between 2 percent and 3 percent annual growth can generate $2 trillion in revenue over about 10 years, he said. Plans for regulatory “relief” and re-examining trade deals that aren’t fair to the U.S. will also stoke growth, Mnuchin added.
The International Monetary Fund forecasts the U.S. economy will expand at 2.3 percent this year and 2.5 percent in 2018.