Treasury Secretary Steve Mnuchin testified before the House Ways and Means Committee on May 24 and before the Senate Finance Committee on May 25 on President Trump’s broad principles for tax reform and details about possible legislation. Republican members of Congress focused many of their questions on the need for comprehensive tax reform, while Democrats expressed concerns about Republican proposals that would disproportionately benefit the wealthy. Mr. Mnuchin’s testimony provided important insights into the administration’s perspective on tax reform.
Mr. Mnuchin stated that his “number one priority as Treasury secretary is creating sustainable economic growth for all Americans. The best way to achieve this is through a combination of tax reform, regulatory relief, and protecting taxpayers; this also includes making some difficult decisions with respect to our budget.” He reiterated that tax reform is the administration’s “highest priority” for legislation and noted that he and National Economic Council Director Gary Cohn have held listening sessions with Congressional leaders and other stakeholders.
Whether tax reform is possible and what scope such legislation might encompass largely depend on whether the administration seeks to enact permanent changes to the tax code or if they will settle for temporary cuts. Permanent changes would require the administration to work with Democrats in the Senate to secure the 60 votes need to overcome a filibuster. “Permanent is better than temporary. Temporary is better than nothing,” Mr. Mnuchin said. “Trade-offs will have to be made as we go through and score the various alternatives.”
Senator Sherrod Brown (D-OH) asked Mr. Mnuchin whether the administration was considering changes to a list of specific tax provisions. When asked about possible changes to the mortgage interest deduction, the secretary responded, “No.” In regard to the Low Income Housing Tax Credit, Mr. Mnuchin stated, “That’s not something that I’ve seen at the moment.”
Secretary Mnuchin’s testimony is available at: http://bit.ly/2qodYwQ