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House budget chair: Economic growth 'will be larger' than 2.6% because of tax overhaul

  • House Budget Committee Chairwoman Diane Black says the Republican tax reform plan should provide economic growth of at least 2.6 percent.

  • "I think it will be larger than that, but we wanted to be conservative," the Tennesse Republican tells CNBC.

  • Black says the House got that number with data from the nonpartisan Congressional Budget Office and economists.

House Budget Committee Chairwoman Diane Black told CNBC on Thursday the Republican tax reform plan should provide economic growth of 2.6 percent.

"I think it will be larger than that, but we wanted to be conservative," the Tennessee Republican told "Squawk Box."

Black said the House got that number with data from the nonpartisan Congressional Budget Office and economists "from one end of the spectrum to the other."

The GOP unveiled their blueprint for tax reform last month, calling for cutting personal and corporate tax rates and aiming to simplify the U.S. tax code.

Chief White House economic advisor Gary Cohn has said the plan will be paid for entirely through economic growth. President Donald Trump has predicted his policies, including tax reform, would spur growth of 3 percent.

Republicans must be careful not to "blow a hole" in the deficit, Black said. "I'm one of those people who believe we ought to be doing mandatory reform and getting our mandatory spending under control," she said.

"I do want to be careful that we use dynamic scoring the right way and don't overshoot," she added. "And yet, at the same time, we do have to understand there will be some dynamic effect as a result of lowering those taxes."

Speaking to a crowd in Pennsylvania on Wednesday, Trump said the plan would boost wages and put more money into Americans' pockets.

Black said she is excited about the possibility of tax reform and wants to make sure the middle class gets a tax break. She also said the corporate rate must be lowered to maintain U.S. competitiveness.

"We certainly don't want all that intellectual capital to leave this country," Black said.

In a separate interview Thursday on CNBC, Treasury Secretary Steven Mnuchin stood by the administration's call for removal of the tax deduction for state and local taxes.

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