Washington, D. C. – Earlier today, House Ways and Means Chairman Kevin Brady (R-TX) joined CNBC’s “Squawk Box” to discuss the Q3 GDP report, tax reform, and further middle-class tax cuts.
On today’s Q3 GDP report and tax reform:
“Numbers today are very encouraging. It really means better than expected. It looks like the growth this year will be 3.3% or higher. That’s a far cry from the 2% prediction before tax reform, so we know that law is working. I think the best is yet to come because so many decisions are being made to locate new facilities, new research, new manufacturing, new headquarters here in the United States. That takes a while to manifest itself in the economy so I think there’ll be even stronger growth over the long term because of the new tax law.”
On the President’s call for a 10% middle-class tax cut:
“What President Trump is looking at is a 10% cut focused on middle-class workers and families for this reason. He still believes middle-class families are the ones always in the squeeze. They make too much to get government help as many do; they don’t make enough to be able to grow the way they want. He just believes we ought to continue to do more for the middle class – and what a contrast from the new report we saw this week – that repealing the tax cuts could cost $27,000 in higher taxes and lost pay to a middle-class family versus a president who wants to, like President Reagan, have a series of cuts, focused on growth, and focused on the middle class.”
“… I wish the media would call once in a while to ask about these things. So yes, the President has been having these discussions, really focused on the middle class. We’ve been working with the White House and the Treasury on some ideas about how best to do it, and there’s some very good ones. So we expect to advance this in the new session of Congress if Republicans maintain control of the House and Senate.”
On the impact of tax reform on wages and growth, and the need for workers:
“As you know, those wage increases don’t snap your fingers and happen overnight. It is because under the new tax law businesses are investing more, that’s going to drive productivity, that’s where the wage growth – that’s the core, sort of strengthening the core of our economy that this new tax law is designed to do. It does take some time to see that occur, but we’re on the right trajectory to see that happen.”
“I think the ‘sugar high’ came from the stimulus, more government spending, quantitative easing. This is really on the supply side — more investment, more productivity, more locating of businesses, investment, and research back in the United States. So I think this is the right approach. The other thing, I think every challenge we’re facing right now is because of growth. The Fed is normalizing its rates, as they should, because our economy is stronger. We have a big problem finding the workers we need all across the country because of the new growth and the opportunities we’re seeing. I would rather have an economy facing challenges because of growth than one facing challenges because of contraction, or anti-growth policies. I think we do have – every economy has some challenges, but for the right reasons.”
“I think it’s important the Fed normalizes rates over time. I don’t want them to prematurely hit the brakes on this economic growth, but over time it is important for us to have inflation in check, a sound dollar going forward. The Fed has been trying to do too much for too long and it really is time I think, gradually, over time, to move back to those normal rates. In our economy, by the way, we are seeing some of the impacts of those raises — right now, in housing, and other sectors. But I think over time we’re stronger.”