Failure is not an option, apparently.
With Republicans controlling all branches of the federal government, there is no excuse for flubbing the opportunity to cut tax rates and simplify the tax code, former House Majority Leader Eric Cantor tells Yahoo Finance. “Members of the House and Senate know they can’t return to voters in 2018 without some results,” Cantor, now vice chairman at investment bank Moelis & Co., says in the video above. “Those in Congress know they’ve got to act.”
Act how? That’s more of an open question. There’s still a wide gap between the detailed and technical tax reform plan developed by House Speaker Paul Ryan, and the one-page outline unveiled recently by President Trump. The GOP in general favors lower rates for businesses and individuals, but the disagreement comes over how to make up for the federal revenue lost through tax cuts.
“How we get there, there’s a lot of uncertainty around what actually is going to happen,” Cantor says. “I’m not sure there’s a lot of agreement on that outside of Washington and frankly inside of Washington.”
As Majority Leader for House Republicans when they took control of the House in 2011, Cantor was a key Congressional insider, until he lost surprisingly in the Virginia primary in 2014. As one of the heads of a boutique investment bank, he now counts as clients business leaders who lobbied him and his party when he was in Congress.
Those clients are guardedly optimistic about the Trump economic agenda, and not just tax reform. “I think we underestimate the positive impact deregulation has on business,” Cantor says. “The [positive] reaction in equity markets today is a big result of knowing the Trump administration has committed itself to knowing it is going to be easier to take risk in America again.”
Sectors likely to benefit most from deregulation: Energy. Healthcare. Utilities. Financial services. Consumer goods and services. But it’s important to keep expectations reasonable. “There’s a tendency and habit these days to be hyperbolic,” Cantor says. “I hope we can see reform that puts America back in a competitive position.”
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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman.