EY CEO: President-elect Trump can double GDP growth

President-elect Donald Trump has set lofty goals for the next four years, suggesting he wants to double the rate of GDP growth in the country, win back American jobs and cut taxes.

But can this be done? “Over time, I think it is [achievable], but it’s not going to happen overnight,” EY Chairman and CEO Mark Weinberger told Yahoo Finance editor-in-chief Andy Serwer at the EY Strategic Growth Forum.

The US stock market has rallied since Election Day, with major indices reaching record highs as investors anticipate lower taxes and less regulation under the new administration. The Organization for Economic Co-operation and Development revised its global growth forecasts higher, saying it believes the Trump administration’s planned tax cuts and government spending will spur global growth faster than previously estimated. The OECD predicts global growth will increase from 2.9% this year to 3.3% in 2017, and climb to 3.6% in 2018.

In terms of how best to achieve significant GDP growth during Trump’s term, Weinberger, who served under both President Bill Clinton and President George W. Bush, said tax reform is key.

“Both the Democrats and Republicans know something has to be done and the devil is in the details. I’m guessing that the Republicans, certainly the [proposal from the] Ways and Means Committee under chairman Brady, signed off by Rep. Ryan, will be front and center. [Their plan] is lowering the corporate rates, lowering the individual rates and moving to a system that is more territorial,” said Weinberger. “That’s the theory, that’s the plan, that’s the direction.”

After being announced Trump’s pick for Treasury secretary earlier this week, Steve Mnuchin has said tax reform will be his top priority, promising the biggest tax overhaul since the Reagan administration. If the Trump administration stays true to its word, Weinberger thinks a new anti-competitive tax system will increase business investment, which in turn will trigger job creation and boost economic growth.

“Most of the money corporations are making with good profitability is being paid out in share buybacks and dividends,” said Weinberger. “Now you hope, with the lower tax rate and a more competitive system, [businesses] will be reinvesting for future growth, and that will create overall GDP growth and jobs.”

Now it’s up to Washington to settle on new policies that will help Trump reach his goal of doubling economic growth.