UPDATE: Republicans must pass tax reform to stand a chance in next election cycle, says Pawlenty
By Rachel Koning Beals
Financial Services Roundtable CEO tells advisers conference he expects a new Fed chair, too
The political stakes are too high for Republicans to whiff on tax reform, said Tim Pawlenty, the former two-term Republican governor from Minnesota who is now CEO of the Financial Services Roundtable, a lobbying group for the financial industry.
Having failed to leverage the Republican hold on the executive and legislative branches into a repeal of Obamacare, "they will get this done," he said of taxes, in a Wednesday speech to the Money Management Institute's annual conference in Chicago.
"There is a very high degree of likelihood [Republicans] will get this done, after the failure to repeal and replace Obamacare... because you cannot tee up tax reform as the political Holy Grail of your party over the last 10 tears and sell it to everyone, everywhere all over the country and then kick this into the dugout heading into the midterm elections," he said.
The desire to move economic growth beyond 2% will continue to be the rallying cry of tax reform, Pawlenty said. President Donald Trump has boasted that his policies will produce sustained 3% to 4% growth for many years to come. The economy has grown at around 2% a year since the 2007-2009 recession, well below the historical growth rate of 3% a year.
Read:Republican tax-cut plan would add pressure on Fed to hike interest rates: analysts (http://www.marketwatch.com/story/republican-tax-cut-plan-would-add-pressure-on-fed-to-hike-interest-rates-analysts-2017-10-02)
Other high-level talking points will center on cutting the number of brackets as at least one way to simplify the tax code, Pawlenty said. Beyond those banner arguments, the Republican majority will have a tougher time explaining the red ink likely necessary to fund the plan, and in addressing the treatment of mortgage interest, carried interest, business loans and more -- policy matters that could become clearer in the next couple of months, Pawlenty said.