Hassett: Trump’s plan to heal Biden’s ‘sick’ economy is working

While financial markets have fluctuated under President Trump, the economy’s long-term growth outlook is good, said Kevin Hassett, Trump’s National Economic Council director.

Despite some bumps during the president’s first 100 days, Hassett believes Trump’s policies on tax cuts, deregulation and tariffs will drive future economic growth.

“Think a year from now: is the U.S. economy going to be way better or way worse? And it’s obviously got to be way better,” he said in an exclusive interview with The Lion last week. “And with a much stronger economy there’ll be stronger profit growth, stronger wage growth and so markets will be fine.”

The economist emphasized that while the markets don’t like change, Americans elected Trump because “the economy that Joe Biden handed us was a sick patient that needed some fixing, and so right now we’re working with Congress to get a big tax bill through.

“We’re deregulating like crazy. We’re stopping the crazy DEI stuff everywhere that’s taking away merit from the workforce, and we’re changing trade policy, and all of those big changes are uncertainties for markets.”

Hassett cited Trump’s successful first term, which delivered “3% GDP growth and $6,500 in increased real wages” during his first three years. COVID-19 stole some of those gains, but Americans saw their real wages decrease under Joe Biden because of record inflation. 

“And so the American person who is listening right now, the ordinary folks that work hard every day, can be confident that their real welfare is going to go higher and higher,” he said.  

Regarding tariffs and a possible trade war with China, he emphasized how real wages, which are adjusted for inflation, dropped for 15 straight years after China entered the World Trade Organization. Some prices may rise but jobs returning to the U.S. will raise wages more than any price increases, “so people are going to be better off, I’m highly confident that’s true.” 

While many are focused on China, Hassett said the administration is making “incredible progress” with India, which overtook China three years ago to become the world’s most populous nation. Historically, India “had the least beneficial trade policy toward the US on Earth,” he said, but now things are starting to change. 

“President Trump, with his reciprocal tariffs, got them to the table, got them to start to treat American workers fairly and open up products that could never be shipped to India before, like agricultural products … To think that they’re the first ones coming to the table – that’s a sign of the power of President Trump’s strategy.” 

Politically, Hassett discussed his role with the economic council as helping Trump’s economic advisers reach consensus and give the president good advice. 

“It’s a lot of pressure, and what it does is it builds a kind of camaraderie that will last a lifetime,” he said, noting there’s no personal animosity among advisors even if they disagree during meetings. 

As Congress hashes out its budget bill in the reconciliation process, Hassett said it’s “no mystery” what Trump wants included, such as a 15% tax on manufacturing and no tax on tips. While policymakers are deciding how to put those in the bill, they’re not the largest items on the table. 

There’s been division between the House and Senate regarding Trump’s proposed $1.5 trillion in tax cuts, which are in addition to extending the 2017 cuts from his first administration, but Hassett seemed confident about a solution. 

“They’re going to get a bill,” he said. “They’re going to get a big, beautiful bill, and President Trump is going to make sure that they get it over the finish line.”