2020-02-10 Bloomberg Businessweek

E C O N O M I C S

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Edited by

Cristina Lindblad

Bloomberg Businessweek February 10, 2020

○ With Democrats in control of

the House, more fiscal stimulus

is likely off the table

Governments up for reelection typically do what

they can to nudge the economy into high gear just

as voters are starting to pay attention. On that front,

things already look pretty good for Donald Trump.

One problem for the president ahead of the vote in

November is that his most powerful tool is now in

the hands of his enemies.

Fiscal stimulus is the main reason for faster

growth on Trump’s watch. In 2018 tax cuts coupled

with higher spending helped the U.S. economy

match its best performance in the years since the

financial crisis. But Republicans lost control of the

budget machinery in Congress last year, when the

House convened under its new Democratic majority.

Ever since then, with his own options for juic-

ing the economy having narrowed, Trump has been

on a crusade to lower interest rates—a lever that’s

controlled by the Federal Reserve and its chairman,

Jerome Powell. “The idea that a Democratic House

is going to sign off on another Trump tax cut seems

extremely far-fetched,” says Jared Bernstein, a senior

fellow at the Center on Budget and Policy Priorities.

“I don’t think there’s much stimulus there in any

recognizable sense that doesn’t require legislation.”

Bernstein is personally familiar with Trump’s

predicament: In 2011, as chief economist to Vice

President Joe Biden, he was part of a team tasked

with finding ways to boost the economy that could