02:27 - Source: CNN Business
US threatens to hike tariffs on UK car exports
Washington CNN  — 

Treasury Secretary Steven Mnuchin said Thursday that the White House is already crafting a package of tax cuts for the middle class as President Donald Trump hopes to secure a second term in November.

In an interview with CNBC from the World Economic Forum in Davos, Switzerland, Mnuchin said Trump has already directed his economic team to begin on what the administration is calling “Tax 2.0.”

“They’ll be tax cuts for the middle class, and we’ll also be looking at other incentives to stimulate economic growth,” Mnuchin said.

Trump has repeatedly dangled additional tax cuts, including before the 2018 midterms. Mnuchin’s renewed promise of tax cuts for average Americans comes more than two years after the President signed into a law a massive $1.7 trillion tax package that slashed corporate tax rates, among other things.

The 2017 tax bill along with a two-year spending bill has helped to swell the federal budget deficit, which topped $1 trillion for the 2019 calendar year.

The widening gap – between how much the government spends versus how much it takes in – comes despite Trump’s 2016 campaign promises to shrink or even eliminate the nation’s deficit.

Typically, big budget deficits widen during economic downturn, but so far the US economy has continued to expand during one of the country’s longest economic expansions.

In the same interview, Mnuchin acknowledged that the US government cannot sustain the federal deficit growing at current levels and will have to reduce its level of spending.

“There’s no question we need to slow down the rate of growth of government spending because we can’t sustain these deficits growing at these levels,” said Mnuchin.

But Trump’s top finance chief put the blame on Democrats in Congress for the federal deficit, who requested that non-military spending be increased to meet the President’s wishes to boost defense spending.