Trump: Tax cuts working bigger, quicker than we expected
President tours Pennsylvania equipment plant before speech on taxes and the economy.
Despite recent gyrations that saw stock prices fall sharply earlier this month, only to bounce back somewhat, President Trump has presided over tremendous growth in our nation’s economy since he was inaugurated
However, polling shows Democrats enjoy an advantage over Republicans in the congressional midterm elections that will be held in November. Making matters worse, 34 Republican members of Congress have announced that they will not seek re-election this year, compared to just 17 Democrats.
The retirement of so many Republicans opens the door for Democratic challengers in races that might normally favor the incumbent Republican. And there may be more retirement announcements in coming months.
If Republicans and President Trump want to preserve GOP majorities in the House and Senate – and if the president wants to be re-elected in 2020 – they will need to convince the American people that their economic policies have been a great success.
A lot can change between now and November, but already, President Trump and congressional Republicans can point to these achievements:
Unemployment has fallen dramatically. According to the federal Bureau of Labor Statistics, from October 2016 (a month before President Trump was elected) to December last year, the national unemployment rate dropped by eight-tenths of a percentage point. During comparable periods, going all the way back to the 1960s, only Presidents Jimmy Carter and Bill Clinton had the same or better unemployment rate improvement after one year in office. Every other president experienced no improvement or increased unemployment.
Women have benefitted. Despite numerous Democrats and left-wing pundits accusing President Trump of being sexist and disinterested in improving the lives of women, U.S. women age 20 and older have experienced rapid economic growth since he was elected. The unemployment rate for women fell by six-tenths of a percentage point – the second-largest drop under any president since at least the 1960s.
Blue collar workers have benefitted. The unemployment rate for workers with less than a high school diploma was 5.4 percent in January – 1.9 percentage points lower than when President Trump was inaugurated and the lowest rate for that demographic in federal records, which go back to 1992. Similarly, the unemployment rate for workers who have a high school diploma but did not attend college dropped by seventh-tenths of a percentage point from January 2017 to January this year. That’s comparable to what occurred in President Clinton’s first year and more than three times better than the growth experienced during President George W. Bush’s inaugural year. In the wake of the 2008 economic crash, it took President Obama more than four years to deliver a comparable improvement for this demographic.
More than 2.8 million full-time jobs have been created since October 2016. That the highest number in comparable period of a president’s first term since President Jimmy Carter took office in 1977.
The gross domestic product has skyrocketed. According to the Bureau of Economic Analysis, the annual GDP growth in 2017 was 2.3 percent – eight-tenth of a percentage point better than the growth that occurred under President Obama in 2016. Since 1933, only two other presidents have experienced such a strong turnaround compared to their predecessor’s final year in office: Franklin Roosevelt and Ronald Reagan.
Taxes have been cut. President Trump and congressional Republicans cut taxes substantially, especially for businesses. This will enable businesses to grow and hire more employees. The current top corporate tax rate of 21 percent is 14 percentage points lower the previous top rate of 35 percent. Additionally, most small business owners will now be able to deduct 20 percent of their pass-through income. Together, these represent the largest business tax cut in more than three decades. Although it could take longer than a year for the full weight of the tax cut to be felt, more than 3 million workers have already received big bonuses because of the lower corporate rates.
There have been remarkable drops in enrollment in welfare programs. For instance, the monthly average Medicaid and Children’s Health Insurance Program enrollment prior to Medicaid expanding was 56.8 million people. By the time of the 2016 presidential election, enrollment had risen to 74.75 million people, a total increase of nearly 17.95 million. From January 2014 to the 2016 election, monthly Medicaid/CHIP enrollment expanded by an average greater than 373,000. From January 2017 to last November – the most recently available data – rolls dropped by more than 802,000.
A careful review of previous administrations reveals a president’s first-year economic growth is not necessarily indicative of future growth. President Carter enjoyed one of the best first-year economies of any president in modern history, but by the end of his first term the economy was in the midst of a serious decline. President Carter lost the 1980 election to Ronald Reagan as a result. However, there are good reasons to believe this won’t happen with President Trump.
Regulations that slow our economy and kill jobs have been killed. President Trump and Congress eliminated more than 1,500 regulations in fiscal year 2017 and created only three new regulations. To put this in perspective, the Obama administration added more than 20,000 regulations.
America’s energy industry has been strengthened. The Trump administration and Congress have worked to boost America’s energy industry by repealing costly and burdensome energy mandates. The most important actions were President Trump’s decisions to start reversing the Clean Power Plan and to pull the United States out of the Paris Climate Agreement – both of which would have cost America trillions of dollars in lost wealth.
Also, the Trump administration announced in January that it will open most of the United States’ shoreline to drilling for oil and natural gas. This could spark the creation of thousands of new jobs and countless billions of dollars in additional economic development and tax revenues.
If the Trump administration continues to implement free-market, pro-liberty policies, it’s likely that the historic economic growth experienced in President Trump’s first year in office will continue throughout the remainder of his first term. This would improve the quality of life for Americans of every region, socio-economic demographic, race, religion and gender. And it would boost the prospects of victory for Republican candidates in 2018 and 2020.
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