Former Obama Treasury secretary says the GOP tax law is a 'ticking time bomb'
Alex Wong/Getty Images
- Former Treasury Secretary Jack Lew says the new tax law is the opposite of what the US economy needs at this point in the economic cycle.
- In a Bloomberg interview, Lew said the increased debt load from the bill would also lead Republicans to believe that social programs like Medicare needed to be cut.
Former Treasury Secretary Jack Lew, who served under President Barack Obama, has slammed the recently enacted Republican tax law as counterproductive for the US economy, saying it could lead to cuts to important government programs.
In an interview with Bloomberg, Lew said the tax law could end up doing the "exact opposite of what anxious and angry voters were calling for" during the 2016 election.
"What we've seen is a tax cut that spends money we don't have to have very concentrated benefits for global corporations and the top 1%," Lew said. "It's leaving us broke so that we cannot deal with these fundamental problems."
Lew said the projected $1.5 trillion in new deficits would add to what he called a "ticking time bomb in terms of the debt."
With the US economy already expanding, Lew said that the tax law's broad fiscal stimulus was unnecessary and that the economy instead needed targeted investment in areas like education and training to help boost workers getting left behind by shifts in industries.
The former Treasury secretary also said he was concerned that, after increasing the debt load by enacting the tax law, Republicans would use the growing deficit to target entitlement programs that are essential for many Americans.
"I fear that the next shoe to drop is an attack on the most vulnerable in our society," Lew said. "How are we going to pay for the deficit caused by the tax cut? We are going to see proposals to cut health insurance for poor people, to take basic food support away from poor people, to attack Medicare and Social Security. One could not have made up a more cynical strategy."
Lew also said changes in foreign policy and trade policy under the Trump administration could pop up as a surprise for financial markets going forward, despite relative calm in the markets during 2017.
"You look at markets over the last year, the calmness of markets, the enthusiasm of markets almost suggests that there's been a decision to look beyond all this chaos and uncertainty because there's nothing we an do about it," Lew said. "But, the moment comes when something happens that is a surprise that shouldn't be a surprise, I worry about binary changes."