“To Cohn’s Claim, I Would Say, ‘Give Me a Break’”: Gary Cohn Tries—and Fails—to Defend the Trump Tax cut – By William D. Cohan (Vanity Fair) / Dec 13 2019
It was a giant corporate giveaway that ballooned the deficit without boosting manufacturing. America will be paying for it for decades. And defending it has become Gary Cohn’s main job.
Gary Cohn, Donald Trump’s former national economic adviser and ex Goldman Sachs president and chief operating officer, has kept an intentionally low profile since he left the White House in April 2018. Unlike, say, Dina Powell, who after leaving the Trump administration returned to Goldman Sachs to serve on the Management Committee, no less, Cohn has had a harder time finding a new high-profile gig. He taught a class last spring at the Institute of Politics at Harvard’s Kennedy School with former senator Heidi Heitkamp, but that was a one-time thing. He has made a few venture-capital investments and has joined the board of directors of Machine Zone, a digital gaming company; Abryx, a biomaterial science company; Spring Labs, a blockchain startup; and, most recently, Hoyos Integrity, a company creating ultra-secure mobile devices. He is on the advisory board of the Bloomberg New Economy Forum.
Cohn and I have had several conversations since he left Washington about his experience working for Trump but always (unfortunately) with the understanding that I could not report what he said. In his very few public appearances, where he could not keep his comments off the record—a radio interview here or a television appearance there—he has been very careful not to criticize the president, even though one of the reasons he left the job was because he and Trump had a major falling out over the president’s now infamous “good people on both sides” comment after the Charlottesville riot in August 2017. Last week, he appeared on a panel at the Securities and Exchange Commission, where he observed, “The consumer part of the economy looks pretty good.” Whichmakes sense because the Trump economy—and how long the bubble can last before it explodes—is liable to be by far the most significant part of Cohn’s legacy.
Last week, Cohn also joined David Axelrod on his podcast, and made his most extensive comments since he left the Trump administration. Cohn has always been among the most conflicted of MAGA devotees, despite his Goldman Sachs pedigree. After sharing the always fascinating particulars of how he grew up dyslexic outside Cleveland, had great difficulty reading but still managed to succeed beyond his wildest dreams, he revealed that he and Trump had been seriously at odds after Charlottesville—they went for more than a week without speaking after seeing each other nearly every day—and that Trump’s words about the incident would haunt him for the rest of his life. He also shared what he believes Trump meant when he told Cohn that if he resigned after Charlottesville—as Cohn was planning to do—it would be an act of “treason.” According to Cohn, because Cohn was leading the charge with Congress on what became Trump’s massive 2018 tax cut, if Cohn were to quit before the legislation was completed and made law, the tax—Trump’s singular legislative achievement—might never have happened. That, according to Cohn, is why his departure would have been a treasonous act in Trump’s mind.
But it was when Axelrod asked Cohn about the consequences of the new tax law that their conversation really got interesting. Citing “critics,” Axelrod said that most of the money saved from cutting the corporate tax rate to 21% from 35% went to stock buybacks and paying higher dividends to shareholders rather than to paying higher wages or to greater corporate investment. And, Axelrod continued, the combination of the lower tax rates on corporations and individuals (on the high end) has led to lower tax receipts and has “sort of exploded” the nation’s annual budget deficit to around $1 trillion. (The Congressional Budget Office’s latest estimate, from August, has the budget deficit in fiscal 2019 coming in at $960 billion, and at just more than $1 trillion between 2020 and 2029.)
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