Treasury Secretary Steven Mnuchin Steven Terner MnuchinLawmakers fear voter backlash over failure to reach COVID-19 relief deal United Airlines, unions call for six-month extension of government aid House Democrats plan to unveil bill next week to avert shutdown MORE said if Congress fails to pass a bill overhauling the tax code, Wall Street will suffer.

"There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done," Mnuchin in an interview with a Politico podcast released Wednesday. "It also has baked into it optimism on regulatory relief which they've begun to see and there's expectations [of continuing]."

"So I think to the extent we get the tax deal done, the stock market will go up higher. But there's no question in my mind if we don't get it done, you're going to see a reversal of a significant amount of these gains," he added.

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The stock market has shown gains since President Trump was elected, with the Dow Jones Industrial Average reaching above 23,000 for a time on Tuesday.

The White House and congressional GOP leaders have made tax reform one of their top priorities, releasing a framework document in September. But the plan has faced pushback from Democrats, who argue that it would be a boon for the wealthy.

Mnuchin said that the administration's priorities are cutting taxes for the middle class and making businesses more competitive, but that cutting taxes for high earners is unavoidable given that they pay most of the taxes.

"When you're cutting taxes across the board, it's very hard not to give tax cuts to the wealthy with tax cuts to the middle class," he said in the Politico interview, which was taped Friday.

Mnuchin also defended the GOP's plan to repeal the estate tax, which applies to estates worth more than about $11 million for a married couple.

"The estate tax is somewhat of an economic issue. It's somewhat of a philosophical issue," he said. "People pay taxes once, why should people have to pay taxes again when they die?"