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Mnuchin says Trump's economic plan is working and 'we're not going back to socialism'

Key Points
  • Steven Mnuchin lauds the president's economic policies and takes a shot at what he sees as worrying socialist trends among lawmakers on the left.
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Watch CNBC's full interview with Treasury Secretary Steve Mnuchin

Treasury Secretary Steven Mnuchin told CNBC on Wednesday that President Donald Trump's economic plan is working, and he took a shot at what his party sees as a growing fascination with socialism among lawmakers on the left.

"The U.S. economy is doing terrific," Mnuchin said from the White House. "And as the president talked about last night, his economic plan is working. We're not going back to socialism. We're going on an economic plan for America that works."

"We don't believe in a centralized planned economy where the government puts restraints on it," he said in the "Squawk Box" interview.

Mnuchin's comments came less than 24 hours after Trump's second State of the Union address to Congress. The president reiterated the importance of bipartisanship and called upon lawmakers to end "decades of political stalemate" by making progress on his political priorities like immigration, infrastructure and economic growth.

Trump also criticized what he deemed as a growing movement among leftist lawmakers toward the economic philosophy of socialism.

"Here, in the United States, we are alarmed by new calls to adopt socialism in our country. America was founded on liberty and independence — not government coercion, domination, and control," Trump said Tuesday night. "We are born free, and we will stay free. Tonight, we renew our resolve that America will never be a socialist country."

A number of Democrats, including Sens. Charles Schumer and Elizabeth Warren, have doubled down in recent weeks on their calls against income inequality in the United States. Schumer's New York Times op-ed with Sen. Bernie Sanders of Vermont — a self-described Democratic socialist who caucuses with the Democrats — drew criticism from Wall Street for its call to limit corporate share buybacks.

Mnuchin specifically attacked that plan, telling CNBC he was surprised to see Schumer attach his name to the op-ed given the Democrat's long history in New York, where much of the nation's financial businesses operate.

"Companies need to be able to allocate capital. That's something that is important to the growth of the U.S. economy," Mnuchin said. "It's a fundamental premise that if companies can't invest the capital productively, they return it to shareholders. That gives shareholders the right to invest in other areas."

Warren, D-Mass., proposed a wealth tax on households worth more than $50 million, while freshman Rep. Alexandria Ocasio-Cortez, D-N.Y., suggested a 70 percent tax on earnings above $10 million. Ocasio-Cortez has drawn attention in Washington and on Wall Street for her left-wing politics, despite only being sworn into office last month.

Recent indicators show the U.S. labor market at or near full employment and GDP gains have remained healthy. The unemployment rate ticked higher to 4 percent in January, thought be to due in part to more Americans returning to the workplace.

"We continue to have very strong jobs numbers," Mnuchin said. "I think you've just begun to see the beginning to tax reform, I think you're going to see that kick a lot again."