White House economic adviser Gary Cohn said he was dumbfounded by the unpopularity of the Republican tax bill, and claimed that President Donald Trump fought unsuccessfully to strip a provision that mostly benefits wealthy investors.
“To be honest with you, I don’t know,’’ Cohn said Wednesday at a Washington event hosted by Axios, when asked why the plan lacked public support. Middle-income Americans “are getting the largest percentage tax savings of anyone in the whole distribution. So we have clearly not communicated that.”
Cohn, a former Goldman Sachs Group Inc. president, said public support would increase when the bill is implemented. He said if he could change one thing about the plan, he would strip the carried-interest provision in the tax code that largely benefits Wall Street investors. Trump, who promised to end the provision during his presidential campaign, was unable to convince lawmakers to make the change, Cohn said.
“We’ve been trying to cut carried interest—we probably tried 25 times,” Cohn said. “We hit opposition in that big white building with the dome at the other end of Pennsylvania Avenue every time we tried.”
Senate Republicans passed the most extensive rewrite of the U.S. tax code in more than 30 years, a bill that delivers a deep, permanent tax cut for corporations and shorter-term relief for individuals.
The chamber’s 51-48 party line vote just before 12:45 a.m. Wednesday in Washington brought Trump to the brink of his first major legislative victory.
The White House said Wednesday that Trump would hold an event on the tax bill at 3 p.m. but that he will sign the bill “at a later date.”
The bill—which has scored poorly in public opinion polls -- promises to become one of the biggest issues in the 2018 elections that will determine whether the GOP retains its majorities in Congress. The House is set to vote on the bill Monday, which would send it to Trump’s desk.
Cohn said Trump would sign the bill this year if Congress is able to pass a separate provision waiving automatic spending cuts as part of a year-end spending deal to avoid a government shut down before Friday. If not, Trump would sign the bill in early 2018, he said.
The bill falls short of many of the public promises made by Cohn and other top Trump aides when they first rolled out a framework for the plan. For example, the final bill includes significant tax cuts for the highest income earners, something that Cohn and other White House officials said would not happen.
"Wealthy Americans are not getting a tax cut,’’ Cohn said Sept. 28 on ABC’s “Good Morning America’’ program.
The average tax cut for the bottom 80 percent of earners would be about $675 in 2018, according to an analysis by the Urban Brookings Tax Policy Center. The top 1 percent of earners would get an average cut of about $50,000 that year, and the top 0.1 percent would get an average of $190,000, according to the group’s analysis.
Asked about the discrepancy on Wednesday, Cohn said “we’re happy to give everyone a tax cut” but maintained that middle-class Americans would receive the largest benefit.
The changes would reduce federal revenue by almost $1.5 trillion over the coming decade—before accounting for any economic growth that might result, according to Congress’s Joint Committee on Taxation, which analyzes tax legislation. Earlier versions were forecast to increase deficits by roughly $1 trillion even after any growth effects.
Cohn said he didn’t believe the tax plan was reflected in the recent stock market rally, saying that the rise in stocks this year was due to a strong economy.
Cohn, director of the White House National Economic Council, is among several White House officials who could be considering leaving their posts early next year.
He batted down rumors on Wednesday of an impending departure, saying he looked forward to working on an overhaul of the welfare laws and an infrastructure package next year.
“I’m staying,” he said, when asked if he’d still be at the White House in three months.
Cohn said he considered resigning in August after Trump said there were “very fine people’’ on both sides of a white supremacist rally in Charlottesville, Virginia.
“I believe this administration can and must do better in consistently and unequivocally condemning these groups,’’ Cohn said in an August interview with the Financial Times, specifically referring to neo-Nazis, white supremacists and the KKK.
He said he stayed on the job, in part, because he wanted to help with the tax overhaul. Speaking on Wednesday, Cohn said the past year was one of the most “fascinating” of his life.
He said he had been speaking with some of the “brightest minds” in California to discuss a plan to dig tunnels in the U.S. and create a high-speed rail system.