Scoop: White House promises to show its work on 3% GDP growth
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In a closed-door meeting on Monday night, President Trump's top economic advisers promised GOP senators they would show their work on how they plan to deliver 3% GDP growth to help lower the cost of the "one big, beautiful bill."
Why it matters: The promise of a booming economy, even if it includes some shock therapy, is central to Trump's overall theory on how businesses and individuals can receive tax cuts while deficits simultaneously can be reduced.
- Treasury Secretary Scott Bessent and National Economic Council director Kevin Hassett told Senate Finance Republicans last night they would share their plans later this week.
- "They were just very optimistic about how much growth we're going to have moving forward, and how popular this plan is and how important it is for our economic health," a senator familiar with the discussions told us.
- Some senators are willing to be persuaded that Trump can cut taxes and juice the economy like he did in his first term, but he has some work to do.
Zoom in: Senate Majority Leader John Thune (R-S.D.) is dealing with three GOP factions that are colliding over the Trump budget bill.
- Debt hawks: Sen. Ron Johnson (R-Wis.) and Bill Cassidy (R-La.) expressed their concerns about the overall amount of deficit spending. Johnson wants to return to pre-pandemic spending, and Cassidy has been publicly saying that if a current policy baseline is used, Congress must pay for it. (Thune embraced a current policy approach today.)
- Free traders want to know if the administration's rosy economic assumptions would include the expected impact of Trump's tariffs, which he's expected to announce tomorrow.
- Medicaid defenders: Moderate Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) and others like Sen. Josh Hawley (R-Mo.) continue to question how deeply Trump and congressional Republicans want to cut Medicaid.
Between the lines: Trump officials are confident the real economy is faring much better than the equities market and they are optimistic that Friday's jobs report will show solid growth.
- Economic forecasters don't seem convinced. They continue to warn about the dangers of the reciprocal tariffs that Trump will announce.
- And the specter of stagflation — or the "S-word" as Axios' Neil Irwin calls it — is lurking.
- Senate leadership is barreling forward without the parliamentarian and hoping to vote on the new budget resolution this week. But Thune reminded senators they still need to make sure they have 51 votes.
The other side: Democrats are howling at the GOP's full embrace of using a current policy score to lower the cost of extending Trump's 2017 tax cuts.
- "The people who said they believed in fiscal discipline want to use funny money to give tax cuts to their billionaire buddies," Sen. Ron Wyden (D-Ore.) told Axios.
- "It is alarming to see — through press reports — that Republicans believe they don't need to defend their effort to hide the true cost of their multitrillion-dollar tax giveaways that will add trillions to the national debt while gutting programs hard-working families rely on," a spokesperson for Democrats on the committee said.
