Commerce Secretary Wilbur Ross is conceding a point that economists have been making for a while -- the 3% growth rate the Trump administration has promised isn't realistic anytime soon.
In an interview with Reuters on Tuesday, Ross said President Trump's growth target "is certainly not achievable this year," marking the first time a White House official has acknowledged that the figure is a less-than-feasible goal in the near-term.
But Ross said Trump's target could ultimately be achieved after all of his business-friendly policies are implemented.
"I think between the change in regulatory attitudes, which will make it easier to make big projects, and the new taxes, which will make the rates of return much better, the reduced regulatory environment, I think over time you will see increases in capex -- and that in turn has a big multiplier effect through the economy," Ross said.
That achieving a 3% economic growth in the near term is a goal divorced from reality is something analysts and economists have been saying for quite some time. Trump campaigned on a pledge to grow the economy at a 3.5%, even a 4% rate. The economy grew at a 0.7% annual rate in the first quarter of 2017 and at a 2.1% rate in the fourth quarter of 2016.
"Could we get to 3? That's a long stretch," former Clinton Treasury Secretary Robert Rubin told CNBC in April.
Former Labor Secretary Robert Reich said in February that such a rate is "not in the cards."
Economic experts have met with skepticism the White House's case that tax reform will accelerate the economy an enormous amount, especially in the absence of other factors.
Moody's Analytics economist Mark Zandi said in a recent interview with TheStreet that Trump's growth figures won't be achievable under the White House's current policy mix -- something Ross seemed to be acknowledging.
"The only way to go from 2% from 3% is a combination of deficit-neutral tax cuts, more infrastructure spending, and most importantly of all, more immigration," he said. "His policy mix isn't the right one to get to sustained higher growth, although it might juice things up temporarily."
Economists also doubt the Trump team's contention that tax cuts will pay for themselves.
The University of Chicago's Booth School of Business in a recent survey found that 35 out of 37 economists agree Trump's tax cuts won't stimulate the economy enough to cancel out their effect on total tax revenue. The other two economists, The Washington Post's Wonkblog points out, misread the question.
Editors' pick: Originally published May 9.