Three Easy Pieces: A Simple Get-It-Done-Now Economic Plan

REUTERS/Valentyn Ogirenko

Larry Kudlow Senior Contributor, CNBC
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Now that the Jim Comey hearing is complete, it’s time for everybody to roll up their sleeves and go back to work on returning the country to prosperity. The most populist policy would be to restore a long-lasting, deep-rooted prosperity for every single American.

President Donald Trump cannot let a deluge of distractions disrupt his and the Republican party’s plans for meaningful health-care and tax reform. The Russian-collusion accusations, the fallout from the Comey hearing, the left-wing media’s daily barrage of anti-Trump propaganda — these are all distractions. And the administration and GOP Congress are in great jeopardy if they get caught up in it and take their eyes of the policy ball.

They must get some degree of health-care and tax reform done. This year. With tangible results in the next several months. If they don’t get it done, they’re going to get creamed in the 2018 midterms.

I see two grounds for this prediction.

Number one, without results on health care and taxes, Trump and the GOP will not have taken steps to palpably improve the economy in terms of growth, jobs, and wages.

Number two, without results on health care and taxes, Trump and the GOP will have revealed that they can’t govern. They were elected to govern, and they should be able to govern. Trump ran on growth, jobs, and wages. He needs to deliver on growth, jobs, and wages.

Earlier this week I and economist Stephen Moore met with senior people in the West Wing. Senior, senior, senior people. And we presented a simple, get-it-done-now economic plan. We call it three easy pieces (like the old Jack Nicholson film, Five Easy Pieces):

Lower the corporate tax rate from 35 to 15 percent. Grant immediate expensing for new business investment. And establish a small, one-time, 10 percent rate for the repatriation of offshore cash.

It’s a simple tonic that will restore capital formation, productivity, real wages, and economic growth. And in terms of political expediency, it’s practical. It’s about getting done what you can get done.

To be sure, the business tax cut is the key piece of these three easy pieces. With a 35 percent corporate tax rate, America is uncompetitive among developed nations in this regard. But that’s not what’s most important here. When business taxes are reduced, 70 percent of the benefits go to the wage-earning middle class. That’s what’s most important.

And a business tax cut is practical. It’s right-now practical. There is widespread agreement in Washington about the need for a business tax cut. And legislators can legally and technically attach corporate-tax-rate reduction to the health-care-reform bill in reconciliation in 2017.

Reconciliation can be nearly anything you want it to be. This can get done.

House Freedom Caucus chairman Mark Meadows is absolutely right that the August recess should be cancelled until this big-bang, grand-slam-homerun reconciliation package is complete.

I’ll be working this summer. I dare say that most readers of this article will be working this summer. So why shouldn’t official Washington work all summer?

If drain the swamp means less vacations, so be it.

Now, I’m not saying Steve Moore and I sold our three-easy-pieces plan to our West Wing audience. They listened. They pondered. They took notes. And we hope it’s in play. There are no commitments, but it’s cooking.

And all of it can be attached to the reconciliation bill. Leave the larger issues of personal tax reform and a tax-system overhaul for next year. Just get this done.

And block out the silliness.

Russiagate. Comeygate. Whatever-the-media-invents-today-gate. These only distract from the real reasons Donald Trump was put in office and congressional Republicans were given one more chance. American voters want the policy results that will deliver a return to economic prosperity.

A corporate tax cut, cash expensing, and repatriation put us back on the prosperity path.

Three easy pieces. Get it done.