House Speaker Paul Ryan (R-WI) said Wednesday that “nobody knows” if Republicans’ tax bill, which would overwhelmingly benefit corporations and the wealthy while adding more than $1.4 trillion to the deficit, would pay for itself.
“Are you saying that the growth you’re going to get from this tax cut will equal the amount it would cost on the deficit side, so that it’s a wash?” Savannah Guthrie asked Ryan in an interview Wednesday.
“Nobody knows the answer to that question, because that’s in the future,” Ryan said. “But what we do know is that this will increase economic growth.”
The CBO estimated in late November that the tax bill would add more than $1.4 trillion to the deficit over 10 years.
Ryan also said, incorrectly, that “every study under the sun” showed that Republicans’ tax bill would spur economic growth.
He specifically cited surveys from the National Association of Manufacturers, an advocacy group, which he said showed “the vast majority of businesses are going to do just what we say: reinvest in their workers, reinvest in their factories, pay people more money, higher wages.”
The question of higher wages, Ryan said, was not a question of “if” but “how much.”
He was responding to an op-ed from Michael Bloomberg, cited by Guthrie, which read: “It’s pure fantasy to think that the tax bill will lead to significantly higher wages and growth.”
In fact — as highlighted by an embarrassing video from a Wall Street Journal event for CEOs but also in a survey from a Bank of America Merrill Lynch strategist John Shin, reported in Bloomberg in November — corporations will likely use their massive tax windfalls to pay down debts and buy back shares, boosting their stock prices and pleasing investors.
“You can point to these anecdotes, but I will just tell you, every study under the sun shows us, you lower the tax rates, make us more competitive, you will see faster economic growth in America,” Ryan responded to that criticism.
The National Association of Manufacturers’ survey, incidentally, allowed respondents to choose more than one answer for what they would do with their saved tax dollars, including “increase capital spending,” “expand your business” and “hire more workers.” “Buy back shares” wasn’t an option.
Several of America’s largest corporations — including what would be the tax bill’s largest beneficiary, Apple — have not indicated they intend to expand their hiring or raise wages as a result of the tax bill’s likely passage.
Ryan noted separately that, in addition to Republicans’ tax cut bill, “we’ve got to control our spending. That, we have more work to do.”
“We clearly have to go after spending control.”
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— TODAY (@TODAYshow) December 20, 2017