The Trump administration claims that its plan to roll back some federal rules will lead to an increase in Americans’ household incomes.
In a report released late last week, the White House Council of Economic Advisers revealed that the administration’s deregulation agenda, which includes getting rid of rules on internet providers, healthcare companies, finance companies and small businesses, would give American households an extra $3,100 a year, on average, within five to ten years.
White House economists said the increase will come from savings in products, as well as higher paychecks due to job growth and productivity. In addition, they believe the deregulation policies will enable U.S. gross domestic product to grow an additional 1 percent to 2.2 percent over the next decade.
“The benefits of this recent deregulatory effort compare favorably with the most significant in American history,” said Casey Mulligan, the council’s chief economist, according to The Wall Street Journal.
But the report left out other factors, such as plans to boost tariffs on Chinese goods, which many economists warn will boost some consumer prices and impact Americans’ after-tax income.
“Just the sheer number of companies that are out having to hire trade lawyers and trade lobbyists right now is crazy,” said Clark Packard, trade policy counsel at the R Street Institute, a right-leaning think tank.
And Jared Bernstein, who served as former Vice President Joseph Biden’s chief economist and is now a senior fellow for the Center on Budget and Policy Priorities, called the report’s methodology “opaque.” He also pointed out that the administration has downplayed the benefits of some of the rules that will be rolled back, including a change in insurance rules that led many Americans to choose health-insurance plans with lower premiums but higher deductibles. While those plans might save households in the short term, they drive up costs in the long term, he said.
“It is not unusual for Council of Economic Advisers reports to have thumbs on the scale,” said Bernstein.