By Rebecca Ballhaus 

Treasury Secretary Steven Mnuchin laid out ambitious goals to secure a U.S. tax-code overhaul by August and to deliver economic growth at rates not seen in more than a decade.

Mr. Mnuchin, in his first interview since his confirmation last week as Treasury secretary, said slower economic growth since the financial crisis had primarily been an anomaly and a result of Obama administration policies that can be reversed. He said the Trump administration is aiming for a sustained 3% or higher annual growth rate, a projection not widely shared by other forecasters.

"We think it's critical that we get back to more normalized economic growth. More normalized economic growth is 3% or higher," said Mr. Mnuchin.

Many economists have warned that the U.S. faces slower economic growth because the labor force is expanding less briskly than in the past as baby boomers retire. The economy has grown about 2% on average over the past decade, and other wealthy economies facing similar demographic challenges as the U.S. have seen slower growth rates.

Many economists believe sustained growth at more than 3% annually will be difficult. The Federal Reserve projects a long-run annual growth rate of just 1.8%.

Stronger growth would make it easier for the Trump administration to balance competing goals of cutting taxes and boosting spending on the military and infrastructure without sending deficits much higher. The new administration is working on a budget blueprint due out next month that will be a first step toward reconciling its objectives.

"We will have our own set of financial projections," he said.

Mr. Mnuchin said the administration was working with House and Senate Republicans to smooth over differences among them on tax policy, with the aim of passing major legislation before Congress leaves for its August recess. He added, "that's an ambitious timeline. It could slip to later in the year."

In his first week on the job, Mr. Mnuchin has spoken with around 10 foreign counterparts and other leaders, including International Monetary Fund Director Christine Lagarde. He also has met with Mel Watt, the director of the Federal Housing Finance Agency, the independent regulator of mortgage companies Fannie Mae and Freddie Mac, which are under the effective control of that agency and the U.S. Treasury as a result of their 2008 bailouts.

Mr. Mnuchin, whose confirmation process was the longest for a Treasury secretary in U.S. history, brought a handful of advisers to the agency with him, but it will likely be months before other senior positions that require Senate confirmation are filled. The White House hasn't nominated anyone for other posts at the department that require Senate approval.

The secretary has been in close contact with National Economic Council director Gary Cohn, his former colleague at Goldman Sachs Group Inc., who emerged as a powerful economic policy maker while Mr. Mnuchin awaited confirmation. The two men have a close relationship, a Treasury official said.

One big question is whether the Trump administration will go along with House Republican plans to make a tax overhaul revenue neutral -- meaning lower tax rates won't add to the deficit. Mr. Mnuchin wouldn't discuss the administration's view on that question and instead pointed to stronger economic growth as an engine that will reduce the urgency for major trade-offs in any tax bill.

The House GOP plan doesn't count solely on growth. It also features limited deductions and a border-adjustment provision that taxes imports and removes taxes from U.S. exports. The plan is projected to generate about $1 trillion over a decade.

The border adjustment provision has run into criticism from large retailers and other importers. U.S. Senators have piled on, too, leaving the idea in trouble without a major presidential push that hasn't happened and might never come.

Mr. Mnuchin said the administration is "looking seriously" at the House plan that includes border adjustment and was well aware of concerns raised by specific industries. The Treasury Department had its own concerns, he added, "about what the impact may be on the dollar" from a border-adjusted tax.

His comments underscored the challenge the new administration and congressional Republicans face reconciling competing objectives.

With the House plan in potential trouble, a Senate plan nonexistent and the Trump plan incomplete, the GOP's tax agenda is in search of a guidepost at a crucial moment. Mr. Mnuchin called for a combined plan that would address developing fractures in the party over tax policy.

As Treasury secretary, Mr. Mnuchin also takes on the role as the Trump administration's leading voice on U.S. currency policy, meaning his every word on the dollar will be closely followed in financial markets.

Mr. Trump has expressed frustration that other countries -- most notably China -- have used weak currency policies to boost exports. The comments during his campaign and since his election carried with them an implication that the new administration might favor a weaker currency to support the U.S. trade position.

But Mr. Mnuchin avoided taking confrontational positions on the dollar. He said the strong U.S. dollar is a reflection of confidence in the U.S. economy and its performance compared with the rest of the world and was a "good thing" in the long run. The comments echoed remarks Mr. Mnuchin made in a confirmation hearing last month.

The dollar has appreciated by 23% over the past three years and added to those gains since the November election.

"I think the strength of the dollar has a lot to do with kind of where our economy is relative to the rest of the world, and that the dollar continues to be the leading currency in the world, the leading reserve currency and a reflection of the confidence that people have in the U.S. economy," Mr. Mnuchin said.

The past several administrations have for the most part signaled support for a strong dollar, even though at times an appreciation of the currency has hurt exports.

Mr. Mnuchin demurred when asked about China's currency and said he looked forward to "healthy bilateral relations" with the world's second- largest economy.

"There's trade issues that will make sense to look at, and I think there's investment issues that will make sense to look at," he said. "There are many things that we will need to collaborate on."

During the campaign, Mr. Trump repeatedly promised to brand China as a currency manipulator, but over the past 18 months, China has taken steps to bolster its currency. The Obama administration said that was a sign Beijing had moved away from seeking an unfair trading advantage by keeping the yuan undervalued.

Mr. Mnuchin said those were two separate issues. "One is the issue of currency manipulation, and then one is the issue of whether there's unfair trading advantages," he said Wednesday. "They may or may not be related."

--Richard Rubin contributed to this article.

Write to Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com

(END) Dow Jones Newswires

February 22, 2017 19:54 ET (00:54 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.