Trump Administration Considers Moves to Bolster Economy

Some of Mr. Trump’s advisers are privately expressing worries about market gyrations and the effect of Mr. Trump’s tariffs, which are scheduled to escalate next month when he imposes a 10 percent tax on more Chinese goods. Researchers at JPMorgan Chase said on Monday that tariffs Mr. Trump has already imposed on $250 billion worth of Chinese imports amount to a tax of about $600 annually on an average American household. When the next wave of tariffs is fully in place, in December, the researchers said, that cost will rise to $1,000 per household.

The president and his advisers continue to blame any slowdown in growth on the Fed’s 2018 interest rate increases, even though rates remain well below where administration officials forecast they would be at this point in the expansion. The Fed has also shifted to cutting rates, ushering in a 25-basis-point cut this month and signaling additional cuts could happen soon.

That has not stopped the administration from considering other ways to inject more money into the economy. Mr. Kudlow told “Fox News Sunday” that the administration was considering a second round of tax cuts.

“Tax cuts 2.0, we are looking at all that,” Mr. Kudlow said. “By the way, Senator Rick Scott of Florida, very smart guy, made an interesting idea — a proposal on another network last week. He said, ‘Look, why don’t we take the tariffs from the China trade and turn those back to the taxpayers in the form of tax cuts?’ That’s an idea.”

White House officials are also discussing a plan to reduce capital gains taxes — which would largely benefit wealthy investors — without an act of Congress, a move Mr. Kudlow also seemed to nod to. “All I’m saying is there’s a lot of good ideas to create more incentives to work, save and invest,” he said.

The capital gains move would almost certainly be challenged in court, and it is opposed within the administration by the Treasury secretary, Steven Mnuchin. Any payroll tax cut would require the administration to work with Democrats, who control the House and who have enough votes to kill the measure in the Senate. House Democrats have shown no appetite to move tax cuts since assuming control of the chamber in January.

Under Mr. Trump, the economy is already receiving an unusual amount of fiscal and monetary stimulus, given its low rate of unemployment. Interest rates remain low by historical standards, and the Fed cut them by a quarter of a percentage point last month, as officials expressed concerns about the trade war dragging on business confidence and economic growth.

The fiscal boost has reversed belt-tightening policies in President Barack Obama’s second term that reduced the federal budget deficit. Mr. Trump’s tax cuts, along with several bipartisan agreements to increase military and domestic spending that he has signed into law, have swelled the deficit, at a moment when it would historically be shrinking. The deficit was up 27 percent in July for the 2019 fiscal year, compared with the same point in 2018, the Treasury Department reported this month.