National Economic Council Director Gary Cohn
National Economic Council Director Gary Cohn

Head of the White House national economic council gave investors a reason to be optimistic, following President Trump’s escalating feud with Congressional leaders, saying in an interview published Friday that the president will kick off a pivot to tax reform next week. He added that getting a reform package passed before the end of 2017 is within the realm of possibility.

Trump’s political calculus is that he is best served trashing wildly unpopular Republican lawmakers, and staking an extreme bargaining position by threatening to shut down the government should they not approve funding for his promised border wall. But the threat is just that, a typical Trump starting bargaining position, and Republicans will likely take a bone Trump throws them in tax reform so long as he pivots, as Cohn suggests will happen on Wednesday.

“Starting next week, the president’s agenda and calendar is going to revolve around tax reform,” Mr Cohn said in the FT interview. “He will start being on the road making major addresses justifying the reasoning for tax reform and why we need it in the US.”

“The ‘big six’ have been meeting and have come up with an outline . . . and we have a good skeleton that we have agreed,” Mr Cohn said in a reference to the lawmakers, himself and Mr Mnuchin. “Now it is Chairman Brady’s time to get the [House] ways and means committee together to put flesh and bone on it, and they will do it next week when the House comes back into session.”

“They have been holding hearings [on tax] for years . . . It’s not like they are just starting the process now,” Mr Cohn said. “I do think it can pass both of the tax committees and both chambers in 2017.”