While the administration of President Donald Trump has made great strides towards restoring the U.S. to a state of strong economic growth, his reforms don’t go far enough to help Americans achieve their financial goals, conservative economist Douglas Holtz-Eakin said.

When advisors create plans for client goals like education, retirement and leisure, they’re implicitly counting on the strength and growth of the economy to help them along, said Holtz-Eakin, president of the American Action Forum, a conservative think tank, former director of the Congressional Budget Office and an economic policy advisor to Sen. John McCain during the 2008 presidential campaign.

“I want to talk about the fundamentals of the economy, without which no one would be able to achieve their dreams,” said Holtz-Eakin, addressing the Investment and Wealth Institute’s 2018 Annual Conference Experience in Nashville, Tenn., on Tuesday. “The U.S. has a problem: Through 2009, the GDP grew quickly enough, doubling on average ever 35 years, meaning that in the course of one working career, the standard of living would double, and for many people that was their route to the American dream. Beginning in 2009, the projection was that the economy would grow more slowly, at 2 percent per year, and the standard of living would double over the course of 75 years.”

In 2016, economic growth slowed further, he said, leading to no real income growth for the year. Slowing growth led directly to the historic 2016 elections, where Republican Donald Trump won the presidential election and Republicans won majorities in both houses of Congress.

In the 15 months since Trump took the oath of office, the U.S. has made some progress enacting six major policy reforms that Holtz-Eakin believes will restore stronger economic growth, but he said there’s still more that can be done to restore the American economy.

Regulatory Reform

“I think that, quietly, the Trump administration has performed somewhat of a miracle on the regulatory front,” said Holtz-Eakin. “It doesn’t get as much attention as tax reform, but to me it’s just stunning.”

Holtz-Eakin’s American Action Forum tracks regulatory policy and estimates the cost of compliance with new federal rules. During the administration of Barack Obama, new regulations were issued at an average rate of 1.1 per day, at a total cost of $890 billion.

The regulations acted as “stealth taxes” on the business community, said Holtz-Eakin, causing the rate at which new businesses were created to fall below the rate at which firms failed for the first time in statistical history.

“The Trump administration shut down the regulatory state,” he said. “In 2018, they empowered the Office of Management and Budget to send out to the agencies budgets, an allotment for how much in additional regulation they can add to business’s budgets. In 2018, these allotments were all zero or negative numbers. We’re going to roll back up to $9 billion in regulations in 2018.”

The regulatory rollback has a direct impact on the financial services industry as federal agencies continue to work on various incarnations.

Tax Reform

With the passage of the Tax Cuts and Jobs Act in December 2017, tax reform has become another bright spot for the U.S. economy, said Holtz-Eakin, particularly in its treatment of corporate earnings and overseas assets. Under the previous tax code, U.S. corporations were taxed in a worldwide system that made them less competitive and created incentives for tax delays and deferrals that prevented the IRS from collecting revenue.

Companies with overseas earnings faced the possibility of those funds being taxed twice, once in the locale that the profits occurred, and again when the profits were brought back to the U.S. The system encouraged multinational corporations to keep their earnings offshore and to build their headquarters out of the U.S.

“The reform changed all of that,” he said. “Corporations now pay a 21 percent rate, which is right in the middle of the competitive world.”

Changes to taxes applied to pass-through entities and individuals should also help to increase productivity and wages, said Holtz-Eakin.

A common criticism of corporate tax reform is that it merely encourages companies to buy back their stock or pay special dividends, which Holtz-Eakin argued is a desirable outcome.

“The cash doesn’t go into a black hole or go out of the financial markets,” he said. “It’s a good thing to get money out of the company that has poor investment opportunities and put it into the hands of someone who has good opportunities.”

Trade Reform

While the Trump administration has been successful in applying regulatory and tax reforms, there are other areas where Holtz-Eakin was outspoken about the administration’s shortcomings: notably, trade.

Holtz-Eakin expressed concern that the administration’s tariffs and other actions to pull out of or scrap free trade agreements could damage the economy over the long term.

“In 2001-2002, I failed to convince President Bush that tariffs were a bad idea,” he said. “The World Trade Organization came back and said that tariffs were non-compliant and had to be dropped. It feels like we’re watching the same movie, and it’s hard for me to think that this is a step in the right direction.”

The renegotiation of NAFTA is also a dangerous path, said Holtz-Eakin. The free-trade pact with the U.S.’s North American neighbors was never meant to create an economic boost at home, but to solidify Mexico as a democratic ally to the south.

Currently, policymakers are working to reform and modernize the agreement before the end of 2018.

“Time is really short. If you look at the timetable required to get a vote in the U.S. Congress before the end of 2018, they have to finish this thing by the end of next week,” he said. “I’m worried about the future of NAFTA.”

Immigration Reform

Immigration is a policy area where Holtz-Eakin believes the Trump administration is moving in the wrong direction.

Economic growth usually depends on two different factors: increases in productivity and demographic growth. Restricting immigration throttles down the potential for economic growth, said Holtz-Eakin.

“The native-born population of the U.S. has sub-replacement fertility. In other words, we don’t have enough babies,” he said. “In the absence of immigration, we’re Japan. We shrink in size, we get old and we become less influential. Everything about our future depends on our choices on immigration.”

Rather than impinge on the ability of peoples to enter the U.S., policymakers should find ways to make immigration and citizenship easier to achieve, he said.

Entitlement Reform

With majorities in both houses of Congress and the presidency, Republicans should use their political power to enact reforms to programs like Social Security, Medicare and Medicaid to ensure that they will be viable in the future.

Currently, economists estimate that the Social Security Trust Fund will run out of money in 15 years, necessitating broad cuts to benefits.

“That’s a disgraceful way to run a pension program. It ought to be fixed on behalf of the beneficiaries so that they know what they’re going to get,” said Holtz-Eakin.

Medicare and Medicaid are also programs faced with choices between insolvency and cutbacks, said Holtz-Eakin, but even more concerning is the quality of health care delivered by both programs. Americans enrolled in the health entitlements receive care well below the standards established by other public systems around the world.

Failing and expensive entitlement programs are sandbagging the federal budget, said Holtz-Eakin

“The budget is on a fundamentally unsustainable track,” he said. “Entitlements are going to drive the national debt to 100 percent of the GDP. At the end of 10 years, interest payments will be the largest thing that the federal government does, bigger than any federal educational programs, and that puts us in an unstable position.”

Education Reform

The U.S. suffers because voters and policy makers both fail to understand the systems that they’re working within, said Holtz-Eakin. The best solution is reforming the American education system, he said.

Since the U.S. began assessing educational outcomes as a result of the No Child Left Behind law, the depth of the crisis in public education has become clear, he said. In fourth grade and eighth grade cohorts, between 25 percent and 30 percent of students fail to display reading, writing and mathematical skills at their grade level, said Holtz-Eakin.

“It’s an enormous tragedy in my view—a civil rights tragedy,” he said. “It feeds into a lot of the other problems you hear about in the educational system, like student debt. Find someone who needs remedial help in the first year they show up in collge, they will probably have a failure to graduate or take too long to graduate. It’s an enormous disqualifier of the future.”

The educational system also needs to be reformed to help retrain workers to find employment and thrive amidst a period of automation, said Holtz-Eakin.