Republican House Speaker Mike Johnson said Wednesday that former President Donald Trump could fund the economic policies he proposed during his presidential campaign by stripping corporate regulations and extending tax cuts to stimulate growth.
“We need to stimulate economic growth, and we can do that through a combination of aggressive use of the tax code and reducing government regulation,” the Louisiana senator said on CNBC’s “Squawk Box.”
“If we have Republican leadership in the White House, the Senate and the House and we have a unified government, this will really accelerate. We’ll see major regulatory reform,” he said.
President Trump has proposed making the 2017 tax cuts permanent, further reducing corporate tax rates and completely eliminating federal income taxes on workers’ tips, overtime pay and Social Security benefits.
A study released in August by the nonpartisan Wharton Budget Model at the University of Pennsylvania found that Trump’s proposed policies could increase the federal deficit by an estimated $5.8 trillion over the next decade.
This figure does not include a proposal proposed by President Trump on September 12 to exempt overtime pay from federal income taxes.
According to an analysis by the Yale University Budget Institute, if the proposal were applied only to pay currently designated as overtime, the total cost of Trump’s proposal would increase by an estimated $866 billion over the next decade. Making all work hours over 40 hours tax-exempt would cost an estimated $1.3 trillion over 10 years.
On Tuesday, Republican presidential candidates also State and local taxesor the SALT deduction, which he capped during his first term.
House Speaker Mike Johnson, R-Louisiana, speaks with reporters at the U.S. Capitol after the final vote of the week, Sept. 12, 2024.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
Johnson said Wednesday he agreed with all of Trump’s proposals. To pay for them, he said, a combination of corporate tax cuts, deregulation and energy policies would be needed to “revitalize the economy.”
But President Trump has repeatedly said he wants to pay for the plan with revenue from imposing high tariffs on all imports, particularly those from China.
During a debate with Vice President Kamala Harris last Tuesday, Trump touted the “billions of dollars” in revenue he has generated from tariffs during his first term that nearly sparked a trade war with China.
Johnson did not mention tariffs as a potential revenue source on Wednesday, and the Trump campaign did not immediately respond to a request for comment about how Johnson’s proposed Trump tax cuts would pay for them.
As of March 2024, Trump’s First tariffThese measures, many of which President Joe Biden left intact and expanded on, collectively collected more than $233 billion in increased taxes for the U.S. government, but the cost was passed on to American consumers as suppliers passed on the costs, according to the Tax Foundation.
Of that total, $89 billion was generated during the Trump administration, while the remaining $144 billion was generated under the Biden administration.
Economists are aware of the difference between the billions of dollars in tariffs that would be collected and the estimated trillions of dollars that would be required to pay for Trump’s tax cuts, and have warned that the plan would explode the annual deficit and national debt if enacted as proposed.
Experts have also directly criticized President Trump’s across-the-board tariff proposal, arguing that it could raise consumer prices just as they are beginning to stabilize from the highest inflation spike in 40 years in 2022.
Johnson’s comments on Wednesday came hours before the House of Representatives was due to vote on a six-month temporary government budget bill that is expected to fail due to persistent opposition from Republican lawmakers. If Congress does not pass a budget by September 30, the government will enter a partial shutdown at 12:01 a.m. ET on October 1.
