Politico

Trump said to pick Hassett to lead Council of Economic Advisers

Written by Lisa

President Donald Trump is close to nominating conservative economist Kevin Hassett to be chairman of the White House Council of Economic Advisers, people familiar with the matter said.

The selection of Hassett, a scholar at the American Enterprise Institute and strong advocate for a corporate tax cut, would come after a long wait for the president to pick someone to lead an office that will play a key role in crafting economic projections for the administration’s tax and budget plans.

Hassett, if nominated and confirmed, would work closely with National Economic Council Director Gary Cohn as the administration rolls out its corporate tax reform proposal in the coming weeks and prepares a budget. Unlike in the Obama administration, the CEA chair will not be a member of the president’s Cabinet, which some view as reflecting Trump’s distaste for academic economists.

Hassett declined to comment. The White House also did not respond to requests for comment.

Hassett’s name has been high on the list for weeks. The administration could still decide to change course and pick someone else, and the exact timing of an announcement remains unknown. Others, including commentator Larry Kudlow, have been said to be close to getting the CEA job only to see their names fall off the list.

But one source close to the matter said the pick would be announced soon. A separate source said Hassett has already been interviewing potential CEA staff members. A third source said Hassett “is the guy” and that no one else is currently on the list.

Despite its reduced status, CEA will still serve as the in-house economic analysis operation for the White House. It will help produce the annual Economic Report of the President and serve as the main liaison between the West Wing and the economic data offices at the Labor and Commerce departments and other federal agencies.

The CEA has already generated controversy under Trump after reports its staff was directed to prepare economic forecasts using growth rates of over 3 percent when estimating future deficits. That is far higher than the 2 percent growth of the past decade and more than most outside analysts expect.

A person close to the matter, however, told POLITICO that the administration is not currently using anything over 3 percent as a forecast for future growth and that CEA analyses will be appropriately conservative.

Conservative economists, including Hassett, generally assume that stimulative tax cut policies like those favored by the White House and congressional Republicans will create faster growth and offset some of the revenue lost by slashing rates.

Hassett would join a roiling debate among Republicans about how to structure corporate tax reform. House Republicans led by Speaker Paul Ryan and Ways and Means Chair Kevin Brady favor a “border-adjustable” system that would tax imports but not most exports.

The tax could generate more than $1 trillion in revenue over 10 years and reduce the price tag from slashing the top rate to 20 percent or lower. But Senate Republicans and many industries reliant on imports do not like the plan. Trump himself has at times both seemed to support and oppose it.

The White House is expected to come out with its own goals for corporate tax reform in the coming weeks, setting the stage for a major fight in Congress. The administration has pledged to get a tax reform package done by August, an ambitious timetable.

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