FILE – In this Feb. 7, 2019 file photo White House National Economic Council Director Larry Kudlow speaks to reporters at the White House in Washington. On Friday, March 29, 2019, Kudlow called on the Federal Reserve to cut its key interest rate by a half-percentage point. Kudlow said that the Fed should do more to help the economy by cutting rates. It signaled last week that it expected to keep rates unchanged for this entire year after raising its benchmark rate four times in 2018 to the current level of 2.25 percent to 2.5 percent.
President Donald Trump is “fully behind” Stephen Moore, his choice to help lead the Federal Reserve, despite unflattering details that have come to light about Moore’s personal life, a top White House official said Wednesday while also complaining about Washington’s “toxic” environment.
“I spoke to the president yesterday. He completely supports Steve,” Larry Kudlow, director of the National Economic Council, told reporters. “People are being awful hard on him. … This town is a toxic town in some respects.”
Kudlow said Moore is “a smart guy” who “would be a breath of fresh air on the Fed, and so far it’s all systems go.”
Moore is a former Trump campaign adviser who helped design massive tax cuts the president signed into law in 2017. He has been affiliated with multiple conservative groups, including as the Heritage Foundation’s chief economist, leading some economists to say Moore could inject politics into an institution that strives to keep decisions about monetary policy free of political influence.
Moore has taken a series of controversial stances on the Fed and has acknowledged the need to learn more about how the central bank works.
He also has said Fed Chairman Jerome Powell should be fired for rate hikes last year that Moore claims undermined the benefits from Trump’s tax cuts. Trump has also publicly come down hard on Powell over those increases. The Fed recently announced it will not raise interest rates in 2019, a decision Powell said was not influenced by the president.
Trump has yet to forward Moore’s nomination to serve on the Fed’s Board of Governors to the Senate for confirmation. His required background check has yet to be completed.
According to published reports and court records, Moore had a lien of more than $75,000 filed against him in January 2018 for unpaid taxes, and has fallen behind on alimony and child support payments to his ex-wife.
On Wednesday, two senior Democratic senators asked Moore to provide detailed information related to the unpaid taxes, including an explanation of why he apparently wrongly deducted child support expenses, causing the underpayment.
Moore said last week that he and his current wife are disputing the IRS’ claim and have been seeking a resolution for years.
“We underpaid our taxes by $6,000, Moore said in an interview with Fox News. “I think it was in 2014 because of a mistake in a deduction we took. We overpaid our taxes, we estimate by our accountant, by about $40,000 to $50,000 in 2015 and somehow that comes out to us owing the IRS $70,000.
“For over two years, we have heard nothing from the IRS,” Moore said. “We can’t get the auditor to respond. … We want a resolution. We want to present our evidence.”
The letter to Moore came from Sens. Sherrod Brown of Ohio, the senior Democrat on the Senate Banking Committee, and Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee. After Trump formally nominates Moore, the Republican-led Banking Committee will conduct his confirmation hearing.
Brown and Wyden gave Moore until April 15 to respond to their questions. Based on his responses, the banking panel may request his tax returns for 2014, they told Moore.
After Trump’s announcement in March, Moore said his criticisms of the Fed, including his suggestion about dismissing Powell, were likely written “in a time of anger.”
While the Fed’s recent actions have been more in line with the easy credit stance the administration is seeking, Trump has made sharp attacks on the central bank at recent meetings, according to a report Wednesday in The Wall Street Journal. The newspaper quoted an unnamed source present at one of the meetings as saying that Trump told the group that he told Powell during a recent telephone conversation: “I guess I’m stuck with you.”
Asked about that comment during his appearance at an event sponsored by the Christian Science Monitor, Kudlow said he thought it was an “expression of love and affection” on the part of the president.
Under the law that governs the Federal Reserve, a president can only remove a Fed chairman for cause. Courts in cases that involved other agencies that use similar language have interpreted it to exclude policy differences.
On the separate issue of tariffs, Kudlow said Trump would veto legislation being considered by Senate Finance Committee Chairman Chuck Grassley, R-Iowa, that, among other things, would scale back the president’s virtually unlimited power to impose tariffs on imports he declares a threat to national security.
“The president is not in favor of that at the moment. Not in favor of that,” Kudlow said. He added that Trump believes imposing tariffs, or even merely threatening to impose them, gives him the upper hand in trade talks with other countries, most notably China.
Trump slapped tariffs on hundreds of billions of dollars in Chinese imports last year and believes China would not be negotiating a trade deal with the U.S. had he not imposed the levies, Kudlow said.
A Chinese delegation is in Washington this week for another round of talks, following a U.S. team’s trip to Beijing last week for discussions.
AP Economics Writer Martin Crutsinger contributed to this report.