The day President Donald Trump signed the bill into law, Rep. Kevin Yoder told a group of northeast Johnson County business people and elected officials that he believes the Tax Cuts and Jobs Act will spark so much growth in the national economy that the $1.5 trillion in added deficit analysts expect it to bring about will never materialize.
“We think that growth will exceed the static score, which is the 2 percent growth,” Yoder said at the NEJC Chamber’s Legislative Preview breakfast Friday. “We think we can move the economy to 3 to 4 percent growth, which will make up for a lot of that.”
The 4 percent growth target has been among President Trump’s talking points since before his election in November 2016, but has been widely critiqued by economists, who say such growth would be nearly impossible given the already low unemployment rate.
Yoder, who was first elected to Congress during the Tea Party wave of 2010, has been a deficit hawk since early in his Congressional career, and continues to be an outspoken critic of the deficits associated with the stimulus measures signed by President Barack Obama at the height of the financial crisis. He said that during his first term, Congress was faced with government spending that would have amounted to $1.5 trillion in new debt every year. Through a variety of measures enacted after the stimulus, including spending cuts and increases to payroll taxes, the debt has slowed to a level such that the projected deficit will be around $8 trillion over a decade, instead of the $15 trillion that would have added up otherwise.
“Because of the Obama era policies, that administration’s tax and spending policies, we’re estimating about an $8 trillion deficit over 10 years,” Yoder said. “[The new tax bill] now bumps that, with a static score — meaning we don’t account for any growth — from $8 trillion to $9.5 trillion.”
But, Yoder said, he and fellow Republicans believe that the tax cuts will be so successful that the economy will nearly double the growth rate projected by Congressional estimators, cutting into much of the projected debt associated with the tax cuts. Those predictions don’t square up with the analysis of the the Joint Committee on Taxation, which says the GOP tax bill is only likely to generate about $450 billion in revenue from economic growth, meaning it will add about $1.1 trillion to the deficit over 10 years.
Yoder’s remarks to the chamber group begin at 1:02:00 in the video below. His response to our question about what makes him comfortable with the projected debt from the tax bill begins at 1:18:00: