WASHINGTON – Republican presidential nominee Donald Trump on Monday unveiled a revised economic plan built around tax cuts and fewer regulations, and Democrat Hillary Clinton responded with an announcement that may seem vaguely familiar to residents of upstate New York.
Sixteen years after promising 200,000 new upstate jobs during her first run for the U.S. Senate from New York – a promise she didn’t come close to fulfilling – Clinton unveiled an analysis saying her economic plan would bring more than 640,000 new jobs to New York State, compared with 209,000 jobs that she said would be lost under Trump.
The dueling announcements both drew plenty of criticism, as economists said Trump’s plans would boost the federal deficit and as Republicans attacked Clinton for making another big jobs promise after failing to fulfill her first one.
Trump further refined his economic plan in a speech before the Detroit Economic Club. Most notably, Trump revised his tax cut plan to bring it in line with the proposal pushed by House Speaker Paul Ryan – and to try to address concerns that his original plan would blow a hole through the federal budget.
Under Trump’s revised plan, the seven current federal tax brackets would be consolidated to just three, with rates of 12, 25 and 33 percent. Trump earlier had proposed a four-tier tax system with rates of 0, 10, 20 and 25 percent.
In addition, under the Trump plan unveiled Monday, the business tax rate would be cut from 35 percent to a flat 15 percent.
In his speech, which protesters frequently interrupted, Trump talked about tax cuts as his main way of boosting the economy.
“I want to jump-start America,” Trump said. “It can be done. And it won’t even be that hard.”
While Trump also proposed a freeze on new federal regulations – including some already set to take effect on Wall Street – his major focus was on taxes. In addition to cutting rates, Trump proposed making all child care expenses tax-deductible – a move that would help middle- and upper-income child-rearing families, but not the poor, who often pay little or no federal taxes.
The Trump-Ryan tax plan would mean a major tax cut for the wealthy, who currently pay a top rate of nearly 40 percent. The nonpartisan Tax Foundation found that it would result in a 5.3 percent after-tax income boost for the wealthiest 1 percent of taxpayers, but only a 0.2 percent raise in take-home pay for middle-income families.
But because Trump’s revised plan doesn’t cut taxes as sharply as he originally proposed, the nonpartisan Committee for a Responsible Federal Budget called it an improvement on his earlier plan.
“It’s encouraging that Donald Trump appears to be modifying his tax plan, which would push America toward an unprecedented level of debt unless it is significantly changed,” said Maya MacGuineas, president of the committee, which reported that Trump’s earlier tax plan, combined with his spending plans – which include no cuts to Social Security or Medicare – would boost the federal debt by $11.5 trillion over 10 years. The group did not yet revise its analysis to look at Trump’s new tax plan.
In adopting Ryan’s tax plan, Trump is signing on to a reform effort that could create 1.7 million new jobs, the Tax Foundation said.
But the Clinton campaign pushed back hard on the Trump economic effort.
Even before his speech, the Clinton campaign issued press releases targeted to particular states citing reports by independent economist Mark Zandi. Those reports said the Trump economic plan would push the nation into a recession that would lead to 3.5 million lost jobs, while Clinton’s economic plan would boost growth and create 10.4 million jobs.
Extrapolating Zandi’s numbers on a state-by-state basis, Clinton’s New York campaign said the state would lose 209,000 jobs under Trump while gaining 640,000 under Clinton.
That press release drew immediate fire from Republicans, especially because it came on the same day of a Washington Post story about Clinton’s campaign promise in 2000 to bring 200,000 new jobs to upstate New York – a region that, as The Buffalo News has previously reported, ended up losing jobs during her eight years as a U.S. senator from the state.
“It was a politician promising anything that she focus-grouped,” said Rep. Chris Collins, a Clarence Republican. “That’s who Hillary Clinton is. She’ll say anything to get elected.”
Meantime, Wendy Long, the Republican challenging Sen. Charles E. Schumer, D-N.Y., said the Post story proved Clinton’s upstate efforts were “an abysmal failure.”
The Clinton camp has long acknowledged that she didn’t create the upstate jobs she promised to create, but has maintained that she tried hard to do so. And those involved in the early planning of the Buffalo Niagara Medical Campus have said Clinton was crucial in winning the federal funding that helped launch that effort, while supporters of the Niagara Falls Air Reserve Station have said she teamed with other members of the local delegation to save that facility from closure in 2005.
Asked for a comment on the upstate jobs issue on Monday, Clinton campaign spokesman Glen Caplin said: “Facing the stiff headwinds of the President (George W.) Bush economy that stacked the deck against the middle class, she never gave up and never stopped fighting for New York jobs.”
At a rally in St. Petersburg, Fla., Clinton spoke in some detail about Zandi’s job estimates, saying they proved that the Sunshine State would gain jobs under a Clinton administration while losing them under a Trump administration focused on helping the wealthy.
“We are not interested in economic plans that only help the top 1 percent,” Clinton said. “It’s time to help everybody else in America get ahead and stay ahead.”
Clinton’s economic plan, which she detailed months ago, includes a 4 percent surtax on incomes over $5 million and also increases rates on capital gains.
Both Clinton and Trump are proposing massive increases in spending on highways, bridges, water systems and other infrastructure, but Clinton’s plan differs in that it also calls for big new investments in clean energy and vocational training for those who don’t go to college, as well as apprenticeships. Clinton also promises to boost small-business startups by allowing college graduates to postpone repaying their loans if they start a business.
Zandi, who supported Republican John McCain in the 2008 presidential race but who has contributed money to Clinton this time, said Trump’s huge tax cuts, combined with his unwillingness to cut social programs and failure to outline other spending cuts, would likely drive the economy into recession.
Trump’s economic plan “results in much higher interest rates which, combined with a lot of other things, undermines corporate earnings and ultimately stock prices,” Zandi told CNBC in June.
But Collins, a longtime budget hawk, pushed back hard against any suggestion that the Republican candidate would bust the budget and drive the nation into recession.
“Donald Trump has committed to balancing the federal budget in 10 years,” Collins said. “We just have to put pen to paper and see how it’s going to work. The details will be provided later.”