Republican House Speaker Mike Johnson on Wednesday said former President Donald Trump could pay for his presidential campaign’s economic proposals by rolling back corporate regulation and expanding tax cuts to stimulate growth.
“You have to bring about a pro-growth economy, and you do that with a combination of aggressive use of the tax code and reduction in government regulation,” the Louisiana lawmaker said on CNBC’s “Squawk Box.”
“If you get Republican leadership in the White House, the Senate and the House, unified government, we will put this thing on turbo. You will see massive regulatory reform,” he said.
Trump has proposed making his 2017 tax cuts permanent and further lowering the corporate tax rate, as well as wholly eliminating federal income taxes on worker tips, overtime pay and Social Security benefits.
An August study from the nonpartisan Penn Wharton Budget Model found that Trump’s policy proposals could add an estimated $5.8 trillion to the federal deficit over the next ten years.
That figure did not include Trump’s Sept. 12 proposal to exempt overtime pay from federal income taxes.
If applied only to pay that is currently designated as overtime, the proposal would add an estimated $866 billion to the total cost of Trump’s proposals over the next decade, according to an analysis from the Yale Budget Lab. A tax exemption for all hours worked over 40 hours per week would cost an estimated $1.3 trillion over 10 years.
On Tuesday, the Republican presidential nominee also floated reestablishing the state and local tax (SALT) deduction, which he capped during his first term.
Speaker of the House Mike Johnson, R-La., talks with reporters in the U.S. Capitol after the last votes of the week on Thursday, September 12, 2024.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
Johnson on Wednesday said he agreed with all of Trump’s proposals. Paying for them, he said, would come down to a combination of corporate tax cuts, deregulation and energy policy to get “the economy humming.”
Trump, however, has repeatedly said he wants to pay for his plans with the proceeds from hardline tariffs on all imports, with an especially high rate for Chinese imports.
During his debate against Vice President Kamala Harris last Tuesday, Trump touted the “billions and billions of dollars” in revenue generated by his first-term tariffs, which nearly triggered a trade war with China.
Jonson made no mention of tariffs as a potential revenue source Wednesday. The Trump campaign did not immediately respond to CNBC’s request for comment about Johnson’s suggestions for how to pay for Trump’s proposed tax cuts.
As of March 2024, Trump’s first-term tariffs, many of which President Joe Biden left in place and built upon, brought in a total of over $233 billion in higher taxes collected for the U.S. government, paid for by American consumers because suppliers passed the costs on, according to the Tax Foundation.
$89 billion of that was generated during the Trump administration, while the remaining $144 billion came in under Biden.
The gap between billions of dollars in tariffs collected, and the estimated trillions of dollars Trump’s tax giveaways would cost, is one that is not lost on economists, who warn of exploding annual deficits and national debt if the plans are enacted as proposed.
Experts have also criticized Trump’s across-the-board tariff proposal directly, arguing it could raise consumer prices just as they have begun to cool from the 40-year inflation high of 2022.
Johnson’s comments on Wednesday came hours before he faced a House vote for his six-month stopgap government funding bill, which is expected to fail due to lingering opposition within the GOP caucus. If Congress does not pass a funding resolution by Sept. 30, the government will go into partial shutdown at 12:01 a.m. E.T. on Oct. 1.