U.S. Treasury Secretary-nominee Steven Mnuchin outlined an economic agenda aimed at almost doubling the growth rate of the current expansion, saying he will boost jobs by making tax reform his overriding priority.
Mnuchin, speaking Wednesday on CNBC alongside Wilbur Ross, the billionaire investor who is President-elect Donald Trump’s pick to be Commerce secretary, said tax cuts for businesses and the middle class, fewer regulations, infrastructure investment and bilateral trade deals can help the world’s largest economy achieve 3 percent to 4 percent growth.
The U.S. expansion has averaged 2.1 percent at an annual rate since the end of the 2007-2009 recession.
“We’re going to cut corporate taxes which will bring huge amounts of jobs back to the United States,” he said. “There will be a big tax cut for the middle class. But any tax cuts we have for the upper class will be offset by less deductions that will pay for it.”
Mnuchin said his plan involves reducing the corporate tax rate to 15 percent—from the current 35 percent—echoing an idea Trump pledged to deliver during the campaign. Mnuchin said he wanted to bring “a lot of cash back to the U.S.,” proposing a one-time 10 percent repatriation tax to return corporate tax revenue held abroad, another key promise by Trump.
Mnuchin also said the Trump administration will work “reasonably fast” to overhaul housing finance. In an interview with Fox Business Network, he said Fannie Mae and Freddie Mac need to be restructured and moved “out of government control,” comments that sent shares of the mortgage-finance giants soaring Wednesday. Some Republicans have said they should be wound down or eliminated.
At the Treasury, Mnuchin will be in charge of financing the nation’s debt. In the CNBC interview, he said he’ll explore issuing debt maturing in more than 30 years to cushion the effect of rising interest rates. Asked if he would consider maturities as long as 50 years or 100 years, he said “we’ll take a look at everything.”
While Trump campaigned with tough rhetoric on China, saying he would instruct his Treasury secretary to designate the nation a currency manipulator, Mnuchin’s tone was softer without ruling out such a move. Mnuchin said he will work closely with Ross on the enforcement aspects of trade agreements. Both nominations are subject to Senate confirmation.
“If we determine that we need to label them a currency manipulator, that’s something the Treasury would do,” Mnuchin said.
Asked about the U.S.’s strong dollar policy, Mnuchin declined an opportunity to endorse it. “I think that the United States is the greatest country in the world to invest in. We see that money is pouring into the United States for those reasons,” he said. “We’re really going to be focused on economic growth and creating jobs and that’s really going to be a priority.”
Mnuchin, a 53-year-old former Goldman Sachs Group Inc. partner and movie financier, who says he’s known Trump for 15 years, repeated the president-elect’s goals to upgrade infrastructure in the U.S. and said he will consider public-private partnerships, along with other options that he didn’t specify.
The frosty response from Democrats in the Senate on Mnuchin’s nomination indicate that he may face a contentious confirmation battle ahead. His approval will first go through the Senate Finance Committee and then require a majority in a floor vote. The part of his background that’s likely to get the most scrutiny is his decision to buy IndyMac, a failed mortgage lender, in 2009 and turn a profit after renaming and recapitalizing it, effectively profiting from the subprime mortgage crisis.
A San Francisco-based not-for-profit later accused the bank, which was renamed OneWest, of shoddy foreclosure practices and avoiding business in minority neighborhoods. The bank has denied these claims. Mnuchin on Wednesday said he was proud of his work with IndyMac, saying that 30 percent of IndyMac loans were delinquent and one of the worst mortgage portfolios he’s seen.
Given Mnuchin’s “history of profiting off the victims of predatory lending, I look forward to asking him how his Treasury department would work for Americans who are still waiting for the economic recovery to show up in their communities,” Senator Ron Wyden of Oregon, the Senate Finance Committee’s top Democrat, said in a written statement.
Mnuchin said the wait for faster growth and the creation of better-paying jobs will be over under a Trump presidency.
“The problem has been for the last eight years, there’s been no economic growth. What we saw from traveling with the President-elect at all these rallies is for the average American worker, they’ve gone no where,” said Mnuchin, who served as Trump’s national finance chairman. “Our job is to make sure that the average American worker has wage increases and have good jobs. That’s the priority of this administration.”