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Trump tax plan could result in 'serious blowback' from Congress: Ex-Obama advisor Goolsbee

  • It could be very risky for the Trump administration to produce a tax reform plan, because congressional leaders "jealously guard their turf," Austan Goolsbee told CNBC.
  • Earlier Thursday, Treasury Secretary Steven Mnuchin told CNBC the administration has a "very detailed" tax plan ready.
  • "If the administration says, 'We want you to get rid of the following deductions, loopholes, something,' I think there's going to be serious blowback," Goolsbee said.

It could be "very risky" for the Trump administration to produce a tax reform plan, because congressional leaders "jealously guard their turf," former Council of Economic Advisors Chair Austan Goolsbee told CNBC on Thursday.

Earlier Thursday, Treasury Secretary Steven Mnuchin told CNBC the administration has been working with leadership on a "very detailed" tax plan.

"If the administration says, 'We want you to get rid of the following deductions, loopholes, something,' I think there's going to be serious blowback," Goolsbee, who served on the council under President Barack Obama, said in an interview with "Power Lunch."

Mnuchin told CNBC the House and Senate are now "socializing the plan with their members."

"We're going to release a blueprint, it's going to go to committee and we're going to turn this into a bill that the president will sign," Mnuchin said.

So far, there haven't been many details on the administration's tax plan. In a speech on Wednesday, President Donald Trump touted tax reform as key to unlocking economic growth and said he was fully committed to working with Congress.

Trump campaigned on the promise of tax reform, but economist Diane Swonk said there is a lot of rhetoric in Washington now on tax cuts instead of reform.

"The only thing you can do quickly is tax cuts, not reform," the CEO of DS Economics told "Power Lunch."

"There's a reason that it took three years back in 1986 and started 10 years before that, and that's because it's hard. Reform is hard. Tax cuts are easy," she added.

Swonk also agreed with Goolsbee about the potential for problems with a Trump plan.

"There is a real danger in sort of setting the agenda and then not having Congress really on the same page and having to cut deals," she said.

— CNBC's Jeff Cox contributed to this report.

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