Mick Mulvaney: 3 percent growth a ‘conservatively defensible number’

Trumponomics is anything that can get the U.S. economy soaring to 3 percent growth, the administration’s top economic advisers told Congress this week, saying the only way the federal government can balance its books is to get the economy humming that fast.

Defending President Trump’s budget blueprint, the top officials said their overriding goal was to cut spending and free the economy, hoping to win new revenue by expanding the size of the pie, without needing to resort to tax hikes.

“The foundation for the plan is 3 percent growth. In fact, that is Trumponomics,” White House budget director Mick Mulvaney told lawmakers this week, as he made the rounds on Capitol Hill to defend the president’s 2018 plan.

Mr. Mulvaney said Mr. Trump’s proposed reforms on taxes, trade and regulations, coupled with an anticipated repeal of parts of Obamacare, would help drive that growth, which is about a percentage point greater than what other major economic forecasters have predicted.

At the same time, the budget calls for slashing spending by about $3.6 trillion over the course of a decade without increasing taxes or touching benefits in the two big entitlement programs of Social Security and Medicare.

Mr. Mulvaney said the president had insisted on leaving entitlements alone to fulfill a campaign pledge, though the budget director did acknowledge they’d likely have to be revisited in the longer term.

But he also said Mr. Trump’s plan is a departure from those of his predecessors, in that it actually includes a way to pay back the bills it racks up. He said the 3 percent growth rate translates to about $2 trillion in additional revenues for the government over a 10-year period.

“If you borrow money, if you take money from people and have no intention and no plan of ever giving it back to them, that is not debt. That is theft,” he said.

Treasury Secretary Steven Mnuchin said Thursday they’ve heard lots of economists tell them why the numbers aren’t going to work out, but that they’re committed to have policies that will get them there.

“We are currently bearing the cost[s] of excessive government commitments of previous years and this has forced us into making hard choices, but the remarkable thing about economic growth is it builds on itself,” he said.

Democrats and other analysts are skeptical about the 3 percent forecast, which the administration includes in the second half of the 10-year budget window they use. That level of growth hasn’t been achieved over a full calendar year in more than a decade, and the Congressional Budget Office has forecast a growth rate of about 2 percent over the next 10 years.

Sen. Chris Van Hollen on Thursday said the administration’s figures are based on “fraudulent accounting.”

“At least you got to be honest, and instead what you’ve done is you’ve made up a number here based on no policy,” said Mr. Van Hollen, Maryland Democrat. “It is flimflam.”

Mr. Mulvaney replied in a budget committee hearing that former President Barack Obama had assumed growth of more than 4 percent in his first budget and never got things to balance.

“We think this is extraordinarily defensible,” he said.

Even Republicans concede that the broader budget, like other such plans from presidents, is going nowhere on Capitol Hill. But they also credit the Trump administration with at least trying to get things into balance, and welcome the bullish attitude on the economy.

“I really appreciate that that’s the first balanced budget — even though it’s over 10 years — that I’ve seen from a president in a long time,” said Sen. Mike Enzi, Wyoming Republican and chairman of the Senate Budget Committee. “When you’re dealing with that much volume, there is something in this budget for every single person to hate.”