By Simon Clark 

BERLIN -- American tycoons including billionaires Leon Black and David Rubenstein told a private-equity conference here that cuts in taxes and regulations will likely boost economic growth during Donald Trump's presidency.

Adding policies to boost infrastructure spending and attracting trillions of dollars held offshore by U.S. companies could trigger "a turbocharged stimulative environment" Mr. Black, founder of New York-based private-equity firm Apollo Global Management LLC, said Tuesday. "We could have GDP growth go from 1.5% to 2.5% to 3%."

Less clear is how the government will make up for any tax cuts and increased spending. Mr. Rubenstein, the co-founder of Washington-based Carlyle Group, raised the prospect of increased government borrowing.

"How will you pay for it?" Mr. Rubenstein asked on Wednesday at the Super Return conference. "You can say we are going to have deficit spending, and deficit spending means we are just going to borrow more."

Mr. Rubenstein and John Snow, the former Treasury secretary who now chairs New York-based Cerberus Capital Management LP, were both skeptical of the chances of a proposed border tax on imports becoming law. Major importers of goods such as Wal-Mart Stores Inc. and Sears Holdings Corp. would probably vigorously oppose the tax, Mr. Snow said.

"I think this is going to prove a bridge too far," Mr. Snow said on Wednesday. "It has powerful political interests opposed to it. I think there will be some nod in the direction of a tax on imports, but I don't think it will take the full form."

The new administration will probably be beneficial to the private-equity industry, according to Mr. Rubenstein. He founded Carlyle in 1987 with William Conway and Daniel D'Aniello. The firm manages $158 billion.

Mr. Trump needs to generate economic growth to make good on his promises to the electorate, according to Mr. Snow.

"He talks about making America great again and that means fundamentally creating conditions under which America can grow faster," Mr. Snow said. "As long as we have unsatisfactory economic conditions, they breed the disenchantment with the political elites."

Economic growth will be crucial for the president's re-election prospects in 2020, according to Norm Champ, a lawyer at Kirkland & Ellis LLP who previously worked at the Securities and Exchange Commission.

"If he can get a significant corporate tax cut and repatriate trillions of dollars held offshore that would get U.S. growth above 3% in time for the next presidential election," Mr. Champ said in an interview at the conference.

Write to Simon Clark at simon.clark@wsj.com

(END) Dow Jones Newswires

March 01, 2017 14:47 ET (19:47 GMT)

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