(Bloomberg) — A pledge not to give the wealthiest Americans an absolute tax cut is coming back to haunt Treasury Secretary Steven Mnuchin.
During congressional hearings this week, Democrats pressed Mnuchin repeatedly about his late November statement that President Donald Trump’s tax plan would benefit middle-class taxpayers, not the highest earners — an assurance that some quickly labeled “the Mnuchin Rule.” In response, he stopped short of repeating the pledge — and wouldn’t say whether Trump would refuse to sign tax legislation that would make top earners the biggest winners.
Mnuchin’s go-to response: Administration officials are working on a plan that can get through Congress.
“I’m not personally guaranteeing anything at the moment,” Mnuchin said after questions from Bob Casey, a Pennsylvania Democrat, during the Senate Finance Committee hearing Thursday. “As opposed to the administration coming out with its own proposal, our intent is that we will work with the House and Senate, that we will come up with a combined proposal that will pass the House and Senate and be signed by the president.”
The Treasury secretary’s deference to the legislative process contrasts with previous comments by White House officials, who have said the Trump administration would be driving the train on a tax overhaul — unlike what happened with the health care bill.
The relentless questioning from Democrats suggests they’ll rally around possible windfalls for the wealthy as a message to try to turn public opinion against the eventual Republican tax plan. In November, Mnuchin said that any benefit that high earners would see from cutting tax rates would be offset by eliminating deductions that are currently available. But independent analysts say it’s unlikely that the one-page tax plan that Mnuchin and National Economic Council Gary Cohn unveiled last month could eliminate enough deductions to prevent a windfall for the highest income earners.
While Mnuchin wouldn’t repeat his earlier statement this week, he did say Trump still intends to overhaul the tax code in a way that will benefit working-class Americans.
“I guarantee you our proposal has been and will be a middle-income tax cut and that is our priority,” Mnuchin said Thursday.
Lloyd Doggett, a Texas Democrat on the House Ways and Means Committee, said he thought Mnuchin was equivocating when asked whether Trump would veto a tax plan that didn’t adhere to the Mnuchin Rule. Doggett said the administration ultimately will have to own its tax plan, even if it reverses promises made before the election and during the transition.
“It is an attempt I think to reconcile the populist comments that President Trump made in the course of the campaign with the reality of what he is a part of here in this process,” Doggett said in an interview after a Ways and Means hearing on Wednesday. “They really can’t escape responsibility for it or shift blame here, because they want to claim full credit for what is done.”
When asked if his responses during questioning about the so-called Mnuchin Rule shifts accountability to lawmakers, Mnuchin said that wasn’t his intention.