Analysts predict the U.S. economy could grow by about 2.8% in 2017 and 2018 as a result of a boost in oil prices, as lawmakers work to pass tax cuts for businesses and individuals.
The tax plan unveiled by President Donald Trump is aimed at boosting growth by $2 trillion over the next decade and raising the top rate to 39.6% from the current 35%.
But experts said it would be difficult to achieve that in the short term because of the tax cuts.
“The impact of the economic recovery is only going to be felt for a few months,” said William Gale, an economics professor at George Mason University.
“There’s going to have to be some adjustments.
The longer term impact is really going to depend on how many people can get through the system.”
Gale said that could mean a boost for those who are earning between $50,000 and $100,000 a year, or people who have a low income or work in lower-paying industries such as agriculture, hospitality and retail.
“The big problem is, we’re going to get some people in those jobs who can’t get to that income level,” Gale said.
“I don’t think we’re at the point where the economy is going to grow by 2.9%.”
The White House said Friday that it was still assessing the impact of tax cuts in the coming weeks.
“We’re continuing to look at the effects of the proposed tax cuts on economic growth and growth in the unemployment rate,” White House Press Secretary Josh Earnest said.
He said the administration will look at whether to offer an additional $2,000 per household tax cut to those earning more than $250,000 in the next year or two.
Earnest said the White House would work with Congress to develop a plan to offset the revenue loss.
The tax cut package was announced Friday by President Joe Biden.
It is expected to include a proposal to provide an additional 0.4% cut to the top income tax rate from 39.8%.
Biden’s plan includes $1 trillion for infrastructure projects.
That would add to the $1.3 trillion the White, Republican and Democratic-led Congress agreed to in the November tax overhaul.
Ahead of the announcement, the nonpartisan Congressional Budget Office projected that Biden’s plan would boost economic growth by 2 to 3 percentage points in the second half of this decade.
Biden and congressional Republicans said the tax overhaul would create jobs and boost the economy, while Democrats and business groups said the plan would hurt wages and job growth.
The CBO said it expects the economic growth in 2019 and 2020 to be 3% and 2%, respectively.
Brent Spiner, a spokesman for Biden, said the Biden administration is evaluating how the economic stimulus measures could impact the economy in 2019.
Spiner said Biden’s tax plan is designed to provide a stimulus package that provides the American people with the relief they deserve.
“With the new year upon us, we are making the case to the American People that the tax plan will help make sure that the economy grows again,” Spiner said.
“We’re not making the argument that the recovery is over.
We’re making the economic case that we have a plan that will give people the relief that they deserve.”