White House foresees long economic boom where others don't

Contrary to the views of most economists, the Trump administration expects the U.S. economy to keep booming over the next decade on the strength of further tax cuts, reduced regulation and improvements to the nation's infrastructure.

The annual report from President Donald Trump's Council of Economic Advisers forecasts that the economy will expand a brisk 3.2 percent this year and a still-healthy 2.8 percent a decade from now. That is much faster than the Federal Reserve's long-run forecast of 1.9 percent annual economic growth.

The administration's forecast hinges on an expectation that it will manage to implement further tax cuts, incentives for infrastructure improvements, new labor policies and scaled-back regulations — programs that are unlikely to gain favor with the Democratic-led House that would need to approve most of them.

Kevin Hassett, chairman of the White House council, insisted that the president's economic agenda would provide enough fuel to drive robust growth at a time when the majority of economists foresee a slowdown due in part to the aging U.S. population.

He said the biggest risk to growth would be if financial markets anticipate that Trump's existing policies would be reversed. Without getting into specifics, Hassett said the risk would be if markets expect that the winner of the 2020 presidential election would shift away from policies such as the tax overhaul that Trump signed into law in 2017.

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Trump delivering speeches through the years
U.S. President Donald Trump gestures as he delivers a speech during the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 26, 2018. REUTERS/Denis Balibouse
U.S. President Donald Trump delivers a speech on tax reform legislation at the White House in Washington, U.S., December 13, 2017. REUTERS/Carlos Barria
U.S. President Donald Trump speaks at the Utah State Capitol, where he announced big cuts to Utah's sprawling wilderness national monuments, in Salt Lake City, Utah, U.S., December 4, 2017. REUTERS/Kevin Lamarque
U.S. President Donald Trump delivers his speech as he and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj
U.S. President Donald Trump delivers a speech at the National Assembly in Seoul, South Korea, Wednesday, Nov. 8, 2017. REUTERS/Lee Jin-man/Pool
U.S. President Donald Trump delivers a speech on tax reform in Indianapolis, Indiana, U.S., September 27, 2017. REUTERS/Jonathan Ernst
President Donald Trump turns his back to the crowd during his speech at a rally for Senator Luther Strange at the Von Braun Centre in Huntsville, Alabama, U.S., September 22, 2017. REUTERS/Marvin Gentry
US. President Donald Trump gives a public speech at Krasinski Square, in Warsaw, Poland July 6, 2017. REUTERS/Kacper Pempel
U.S. President Donald Trump delivers a speech on US-Cuba relations at the Manuel Artime Theater in Miami, Florida, U.S., June 16, 2017. REUTERS/Carlos Barria
U.S. President Donald Trump arrives to deliver a speech on US-Cuba relations at the Manuel Artime Theater in Miami, Florida, U.S., June 16, 2017. REUTERS/Carlos Barria
U.S. President Donald Trump delivers a speech during Arab-Islamic-American Summit in Riyadh, Saudi Arabia May 21, 2017. REUTERS/Jonathan Ernst
U.S. President-elect Donald Trump speaks during a USA Thank You Tour event in Orlando, Florida, U.S., December 16, 2016. REUTERS/Lucas Jackson
U.S. President-elect Donald Trump speaks at the USA Thank You Tour event at the Wisconsin State Fair Exposition Center in West Allis, Wisconsin, U.S., December 13, 2016. REUTERS/Shannon Stapleton
U.S. President-Elect Donald Trump speaks at event at Carrier HVAC plant in Indianapolis, Indiana, U.S., December 1, 2016. REUTERS/Chris Bergin
U.S. President-elect Donald Trump speaks at his election night rally in Manhattan, New York, U.S., November 9, 2016. REUTERS/Carlo Allegri
U.S. President elect Donald Trump speaks at election night rally in Manhattan, New York, U.S., November 9, 2016. REUTERS/Jonathan Ernst
U.S. President elect Donald Trump speaks at election night rally in Manhattan, New York, U.S., November 9, 2016. REUTERS/Jonathan Ernst
U.S. Republican presidential nominee Donald Trump speaks at his final campaign event at the Devos Place in Grand Rapids, Michigan, U.S. November 8, 2016. REUTERS/Rebecca Cook
U.S. Republican presidential nominee Donald Trump gestures as he speaks at a campaign rally in Raleigh, North Carolina November 7, 2016. REUTERS/Chris Keane
Republican presidential nominee Donald Trump speaks at a campaign rally in Raleigh, North Carolina, U.S. November 7, 2016. REUTERS/Chris Keane
Republican presidential nominee Donald Trump speaks during a campaign rally in Sarasota, Florida, U.S. November 7, 2016. REUTERS/Carlo Allegri
Republican presidential nominee Donald Trump attends a campaign rally in Detroit, Michigan, U.S. November 6, 2016. REUTERS/Carlo Allegri
Republican U.S. presidential nominee Donald Trump rallies with supporters in a cargo hangar at Minneapolis-Saint Paul International Airport in Minneapolis, Minnesota, U.S. November 6, 2016. REUTERS/Jonathan Ernst
Republican presidential nominee Donald Trump attends a campaign rally in at the Florida State Fairgrounds in Tampa, Florida, U.S. November 5, 2016. REUTERS/Carlo Allegri
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Tax cuts added roughly $1.5 trillion to the federal debt

"Uncertainty over the policies themselves could slow their positive impact," Hassett said.

The tax cuts added roughly $1.5 trillion to the federal debt over the next decade, not accounting for economic growth. The report suggests that the lower tax rates have increased business investment in ways that will make the economy more productive, while also creating a surge in people coming off the sidelines to search for work.

The administration's optimism comes amid signs of slowing global economic growth, as well as a recent slowdown in manufacturing production and weakness in retail sales in January and December.

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