Trump backs off tax cuts, pressures Fed on interest rates

ajc.com

A day after embracing the idea of a possible payroll tax cut to get more money in the hands of consumers and avoid any signs of an economic downturn, President Donald Trump reversed course on  Wednesday and said he would not pursue tax cuts, instead turning up the pressure on the Federal Reserve to cut interest rates in order to spur new economic growth.

"I'm not looking at a tax cut now, we don't need it - we have a strong economy," the President told reporters at the White House on Wednesday before leaving for events in Kentucky.

Mr. Trump specifically said he would not entertain the idea right now of indexing capital gains taxes - saying that skews to the benefit of more wealthy Americans - and would not be pressing for a payroll tax cut, something President Obama did in 2011 and 2012 as a way to help with growth.

With the idea of tax cuts evidently off the table, the President instead tried to shift the burden of any economic difficulties onto the Federal Reserve, again using his bully pulpit to press the Fed to lower interest rates, complaining that interest rate hikes in 2017 and 2018 had held back on growth.

"He raised interest rates too fast, too furious," Mr. Trump said of Federal Reserve Chair Jay Powell.

“The Federal Reserve has let us down,” the President added.

New notes released by the Fed on Wednesday afternoon showed members were divided on the best course for interest rates - with some wanting larger cuts as a way to spur economic growth, and insulate the U.S. from the threat of any slowdown.

Some GOP lawmakers have urged the President to push for a new round of tax cuts, worried that the billions being collected in new tariffs levied by Mr. Trump have offset the benefits of Mr. Trump's 2017 tax cut package.

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