In the News

NEW YORK— Donald Trump offered an expanded economic blueprint and outlined an overhaul of his tax plan on Thursday, but skeptics in both parties questioned his promise to offset steep tax cuts with significantly stronger economic growth.

In a speech at the Economic Club of New York, the Republican presidential nominee sought to cast his vision for the economy as the only one focused on boosting growth, framing Democratic nominee Hillary Clinton’s policies as based instead on redistributing the gains of a slower-growing economy.

My economic plan rejects the cynicism that says our labor force will keep declining, that our jobs will keep leaving and that our economy can never grow as it did once before,” Mr. Trump said.

Mr. Trump’s campaign said his revamped tax-cut plan would cost $4.4 trillion over a decade, before taking into account any returns from better growth. That total was down from independent estimates that pegged the cost of his earlier proposal at more than $9 trillion.

The Clinton campaign dismissed Mr. Trump’s latest tax proposal as a giveaway. It would “benefit Trump at the expense of millions of hard-working folks across our country who deserve the opportunity of a better future,” said Jacob Leibenluft, a senior policy adviser to Mrs. Clinton.

In his speech, Mr. Trump said the new plan—which includes proposals such as collapsing the seven individual tax brackets into three, and lowering the corporate tax rate to 15% from 35%—would simplify the tax code, though it came days after a separate proposal to help families defray child-care costs that would add new complexity to the tax system.

The New York businessman also said proposals to ramp up energy production and to slash environmental and consumer-protection regulations could boost jobs and growth, defraying the revenue lost from his tax cuts. Specifically, he called for a halt to all new regulations and an agency-wide scrub of existing rules to determine their economic impact. He also listed several regulations he wanted to scrap outright, including rules for power-plant emissions, ground-level ozone and food-safety standards.

Outside experts cast doubt on whether Mr. Trump’s tax and economic policies could deliver the growth and employment gains suggested by the Trump campaign without also running large budget deficits.

“It doesn’t add up,” said Douglas Holtz-Eakin, a conservative economist who used to head the Congressional Budget Office and advised President George W. Bush and Sen. John McCain.  For example, he said, the energy sector has slumped in the past two years as oil prices have cratered, and it was unlikely Mr. Trump could add thousands of new jobs without higher oil prices.

Mr. Trump, who has proposed large increases in spending on defense, infrastructure, veterans’ health care and border security, also outlined plans for the first time to cut nondefense budgets by 1% annually. Those cuts would exempt entitlement programs such as Social Security and Medicare, the largest drivers of federal spending growth.

Such annual budget cuts would reduce federal spending on nondefense budgets, which include homeland security, transportation and veterans’ affairs, by 29% from current levels over the next decade, after accounting for inflation, according to the Center on Budget and Policy Priorities, a liberal Washington think tank.

Mr. Trump said his plans could return growth to levels not seen since the late 1990s—by boosting gross domestic product 3.5% annually, up from recent levels of more than 2%. He promised the higher growth would create around 25 million new jobs over a decade, eclipsing even the 22 million jobs added during the 1990s economic boom.

But the economy today faces stiffer headwinds than it did 20 years ago because of an aging workforce and slowing birthrates. Other industrialized nations face even bigger demographic challenges than the U.S., which has seen larger population growth from immigration, but Mr. Trump has promised to curb the flow of immigrants to the U.S.

Mr. Trump’s embrace of higher spending and tax cuts to boost the economy marks a noticeable shift for the GOP from a few years ago, when the Tea Party movement rebelled against bailouts and demanded greater attention to deficits. For Mr. Trump, “growth is a much higher priority than deficit reduction,” said Stephen Moore, an economic adviser to Mr. Trump.

Republican lawmakers cheered Mr. Trump’s embrace of a tax plan that is much closer to one offered by the House GOP and his push for cutting regulations. “He caught the attention of all the House Republicans when he called for a regulatory freeze,” said Rep. French Hill (R., Ark.).

But Mr. Trump has enjoyed less solid backing from traditional conservative groups. For example, representatives of the Heritage Foundation and its lobbying arm, Heritage Action for America, said this week they weren’t available to comment on the latest economic-policy proposals.

Balanced-budget advocates have reacted cautiously to proposals to boost spending or cut taxes without specific measures to avoid higher deficits if growth doesn’t materialize. In contrast to Mr. Trump, Mrs. Clinton has promised to raise taxes on higher-income households to pay for some new spending.

The latest proposal from Mr. Trump moved “in the right direction…but the plan appears to rely on rosy assumptions and murky policy changes,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which backs debt reduction.

The proposals could shore up support from some Republicans who have harbored doubts over his conservative bona fides, while other proposals, such as on child care, could woo independent voters.

“Trump’s ability to maintain the style and resolve of today’s speech and performance now bears watching, particularly as the campaign enters the home stretch and the race has tightened,” said Terry Haines, a political analyst at ISI Evercore in Washington.

In his speech on Thursday, Mr. Trump deviated only occasionally from his prepared remarks, launching a broadside against Ford Motor Co. for its decision to move small-car production to Mexico.

But in a question-and-answer session after the speech with  John Paulson,  a hedge-fund executive and Trump adviser, Mr. Trump returned to a more freewheeling presentation. He said the U.S. risked becoming a “large-scale version of Venezuela” should Mrs. Clinton be able to nominate Supreme Court judges, and he repeated his attacks on the Federal Reserve, accusing the central bank of delaying interest-rate increases for political reasons. “It’s a terrible thing that’s happening,” he said.

On taxes, Mr. Trump’s proposal would collapse the seven individual tax brackets into three, with a top tax rate of 33%, which would apply to income above $225,000 for a married couple and half that for a single filer. The top capital-gains rate would be 20%, down from 23.8%.

The candidate now wants to cap deductions at $100,000 for a single filer and $200,000 for a married couple. That would severely curb high-income households’ ability to deduct their state and local taxes, mortgage interest and charitable contributions.

Mr. Trump also would set the standard deduction at $15,000 for individuals and $30,000 for married couples. That is higher than current law, pushing more families off the tax rolls, but it is lower than the $25,000 and $50,000 tax-free levels that he proposed last year.

Mr. Trump would lower the corporate tax rate from 35% to 15%. He also appeared to abandon a core plank of his earlier tax plans, which called for a 15% top tax rate on business income reported on individual tax returns, instead of taxing such income at the same rates as ordinary income.

Small-business groups had praised the single business tax rate but the Clinton campaign criticized what it called the “Trump loophole,” because much of Mr. Trump’s business income is taxed on his own return and could have gotten the lower rate.

The Trump campaign revised its website on this throughout Thursday. A late-day version suggested but didn’t say clearly that the lower rate is only available for corporations.

Mr. Trump also would restrict the ability of manufacturers to deduct interest costs while also writing off capital expenses in the first year. Economists in both parties had warned that if he didn’t do that, the combination of those policies could create tax subsidies for debt-financed investments, including in real-estate businesses such as his own.

Tax cuts “aren’t going to help you in every economic circumstance,” but lower corporate tax rates right now could boost business investment, which has been weak in recent years, said Andy Puzder, chief executive of CKE Restaurants and an adviser to Mr. Trump.