Art Laffer, Father Of ‘Supply-Side’ Economics, Awarded Medal Of Freedom

President Trump on Wednesday awarded the Medal of Freedom to Arthur B. Laffer, the supply-side economist whose theories shaped GOP tax-cutting efforts — including the 2017 overhaul that helped Mr. Trump regain his footing after failing to replace Obamacare.

Mr. Trump presented the medal, the nation's highest civilian honor, to Mr. Laffer in the White House's Oval Office.

"Few people in history have revolutionized economic theory like Arthur Laffer," said Mr. Trump, who argued the economist's theories ushered in "greater opportunity for all Americans."

"And he's done it again and again," the president added.

Mr. Laffer, 78, has been dubbed the "Father of Supply-Side Economics."

He served as an adviser to Mr. Trump's 2016 campaign and is best known for his economic theory, the "Laffer Curve," which establishes that cuts in marginal tax rates spur investment, production, jobs, wages, economic growth, and tax compliance.

The Laffer curve showed that, starting from a zero tax rate, increases in tax rates will eventually decrease revenue when the tax rates become high enough. Therefore, cuts in marginal tax rates could increase tax revenues.

"It's a concept that has changed public policy decision-making forever," said Jonathan Williams, chief economist and vice president at the American Legislative Exchange Council, which hailed Mr. Trump's move to recognize Mr. Laffer.

The Smithsonian Institution houses a fabled napkin that Mr. Laffer used to sketch out his ideas in 1974 for journalist Jude Wanniski and noted political figures Dick Cheney and Don Rumsfeld at a D.C. restaurant.

Mr. Laffer later served as the first chief economist of the Office of Management and Budget and a top economic advisor to President Ronald Reagan and — in the current era — wrote a book titled, "Trumponomics: Inside the America First Plan to Revive Our Economy," with Stephen Moore.

Mr. Trump in 2017 pushed through Congress an overhaul that slashed corporate and marginal tax rates, giving him a big legislative win after health care efforts stumbled.

The White House and GOP allies say the tax cuts are paying off, likening it to the 1980s.

"The Reagan economy soared, granting sustained economic growth, shrinking poverty expanding incomes and dramatically increasing federal revenue," Mr. Trump said. "Sounds very familiar. Sounds very, very familiar. Actually our economy has never, ever been stronger than it is today."

Mr. Laffer credited the president with progress, putting him in the company of Mr. Reagan.

"And all I can say is wow," he told Mr. Trump.

Critics have pointed to ballooning deficit from the Trump tax cuts, however, while raising questions about GOP claims the plan would pay for itself over time.

Several years ago, Mr. Laffer advised Kansas Gov. Sam Brownback, a Republican who drastically slashed taxes to try and spur economic growth. It was widely panned as a failure that resulted in draconian cuts to education and infrastructure to fill budget gaps.

To that end, not everyone's happy about Mr. Laffer's honor.

G. William Hoagland, a senior vice president at the Bipartisan Policy Center, said he doesn't understand why the president would award the medal to Mr. Laffer, saying he failed to meet the criteria by "advancing a theory that has significantly contributed to the country's debt to GDP reaching historic levels."

"It is so hard to place Laffer in the same league as Milton Friedman, Friedrick Hayek, John Kenneth Galbraith, Gary Becker, Peter Drucker, Alan Greenspan and Robert Solo," said Mr. Hoagland. "Certain carefully targeted and designed tax cuts can have a positive impact on economic activity. But not all tax cuts achieve economic growth, especially those espoused by a meat axe approach on the back of a cocktail napkin."

• Dave Boyer contributed to this report.