President Trump is renewing his push for a payroll-tax cut to be part of the next coro…

President TrumpDonald John TrumpDHS expands authority of personnel to collect information on people threatening monuments: report GOP signals Trump’s payroll-tax cut in Republican coronavirus bill for nowTrump threatens to double down on Portland in other major citiesMORE is renewing his push for a payroll-tax cut to be part of the next coronavirus relief package, adding a wrinkle to forthcoming negotiations.
Trump over the past week has stressed that payroll-tax relief is one of his top legislative priorities. But lawmakers on both sides of the aisle arent enthusiastic about the idea, while many economists argue it might not be an effective way to provide relief to U.S. households during the coronavirus pandemic.
During remarks in the Oval Office on Monday, Trump said a payroll-tax cut is very important. He also called it a win-win situation for workers and employers.
Its a big saving for the people, he said. Its a tremendous saving, and I think its an incentive for companies to hire their workers back and to keep their workers.
Trump added that the tax cut is one of many elements that Congress and the administration are discussing as they start to hash out whats expected to be the last COVID-19 relief bill before Election Day.
In an interview with Fox News that aired on Sunday, Trump told Chris WallaceChristopher (Chris) WallaceWhite House, Senate GOP clash over testing fundsOvernight Defense: House approves defense policy bill amendments on Insurrection Act, nuclear testing | Defense spending bill set for House vote next week | Afghan peace elusive after Taliban deal passes key deadlineTrump tweets photo of himself wearing a maskMORE that he might not sign a relief package into law if it doesnt include his desired tax cut.
Ill have to see, but yeah, I would consider not signing it if we dont have a payroll-tax cut, Trump said.
Discussions about the next coronavirus relief bill are expected to ramp up this week, as lawmakers return to Washington following a two-week July 4 recess.
Treasury Secretary Steven MnuchinSteven Terner MnuchinGOP signals Trump’s payroll-tax cut in Republican coronavirus bill for nowWhite House, Senate GOP clash over testing fundsGOP eyes more than billion for schools in coronavirus packageMORE and White House chief of staff Mark MeadowsMark Randall MeadowsGOP signals Trump’s payroll-tax cut in Republican coronavirus bill for nowWhite House, Senate GOP clash over testing fundsGOP eyes more than billion for schools in coronavirus packageMORE plan to meet with Senate Republicans on Tuesday to discuss their plan.
Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellGOP signals Trump’s payroll-tax cut in Republican coronavirus bill for nowWhite House, Senate GOP clash over testing fundsSenate confirms Vought to be Trump’s OMB directorMORE (R-Ky.) said Monday afternoon that GOP senators will be putting forward a strong starting point for additional recovery legislation hopefully as soon as this week.
Lawmakers and the administration are under pressure to act quickly. Enhanced unemployment benefits are set to expire at the end of the month, and legislating will become almost exponentially harder as Novembers elections draw near.
Trump has been pushing for a payroll-tax cut throughout the pandemic, but has fallen short in each previous relief package.
A $2.2 trillion coronavirus relief law that Trump enacted on March 27 included payroll-tax relief for employers, but not for employees. That law allows employers to defer paying their share of the Social Security payroll tax, and it creates a refundable payroll-tax credit for certain wages businesses pay their employees.
Employees and employers each pay Social Security payroll taxes of 6.2 percent of wages and pay Medicare payroll taxes of 1.45 percent.
With lawmakers and the administration turning their attention to an additional coronavirus relief measure, Trump is reemphasizing a payroll-tax cut, including for employees.
But the idea still faces criticism from some top GOP lawmakers, including Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyGOP signals Trump’s payroll-tax cut in Republican coronavirus bill for nowTrump’s push for payroll tax cut sparks GOP pushbackGraham releases newly declassified documents on Russia probeMORE (Iowa), who said Monday a payroll-tax cut would create a public relations problem because it would be perceived as harming the Social Security trust fund.
Sen. John CornynJohn CornynTea Party conservative Allen West to guide Texas GOP through 2020 electionsTrump’s push for payroll tax cut sparks GOP pushbackPlanned Parenthood launches six-figure ad campaign blasting vulnerable GOP senators on COVID-19 billMORE (R-Texas), an adviser to McConnell, warned that a payroll-tax cut would be problematic.
I think its problematic, because obviously the trust funds for Social Security and Medicare are already on their way to insolvency, Cornyn said. Im not a fan.
Additionally, any coronavirus package will need bipartisan support to become law, and Democrats continue to be opposed to the payroll-tax cut idea. They point out that such a move would not provide relief for the millions of Americans who are unemployed.
A payroll tax cut doesnt help those who arent on a payroll, Sen. Kamala HarrisKamala Devi HarrisDemocrats call for McConnell to bring Voting Rights Act to floor in honor of LewisNation mourns the death of John Lewis: ‘One of the greatest heroes of American history’Hillicon Valley: Russian hackers return to spotlight with vaccine research attack | Twitter says 130 accounts targeted in this week’s cyberattack | Four fired, dozens suspended in CBP probe into racist, sexist Facebook groupsMORE (D-Calif.) tweeted Monday.
Trumps push has the backing of some Republican lawmakers, as well as well-known conservatives such as Stephen MooreStephen MooreStephen Moore optimistic about economy: ‘This was a good week’Sunday shows – Coronavirus resurgence dominatesTrump economist says that voting for Biden is a ‘scary proposition’MORE, who advised the presidents 2016 campaign. They argue that it would help to encourage people to return to work.
In an encouraging sign for Trump, House Minority Leader Kevin McCarthyKevin Owen McCarthyGOP signals Trump’s payroll-tax cut in Republican coronavirus bill for nowTrump’s push for payroll tax cut sparks GOP pushbackThe Hill’s 12:30 Report – Presented by Facebook – Supreme Court denies request to expedite Trump’s financial record caseMORE (R-Calif.) told reporters on Monday that a payroll-tax cut would be a part of Republicans proposal.
Moore said he thinks Republicans are really rallying around this idea.
However, a number of economic policy experts across the ideological spectrum argue that a payroll-tax cut would not be the best way to help people in need.
Theres much more effective things that can and should be done, said Kris Cox, a senior tax policy analyst at the left-leaning Center on Budget and Policy Priorities. She said better options include enhanced unemployment insurance, expanding the Supplemental Nutrition Assistance Program and providing fiscal relief to states.
Douglas Holtz-Eakin, president of the right-leaning American Action Forum, said a payroll tax holiday through the end of the year wouldnt do much to increase hiring because hiring is a longer-term decision.
Kyle Pomerleau, a resident fellow at the right-leaning American Enterprise Institute, said a payroll tax cut would undermine the Social Security trust fund and the Medicare trust fund. He noted that the federal government can transfer money from the general fund to the trust funds but said that such a move is bad fiscal policy because it breaks the link between the tax and the benefit.
Since the passage of his 2017 tax-cut law, Trump has been interested in passing additional tax cuts. The 2017 law didnt win over most voters, and the president is now stepping up his economic attacks on presumptive Democratic presidential nominee Joe BidenJoe BidenBiden vows to fight back against foreign interference efforts if electedOn The Money: Congress set for showdown on coronavirus relief legislation | Jobless claims raise stakes in battle over COVID-19 aid | S&P 500 erases 2020 lossesBiden pledges to overturn Trump’s travel ban initially on majority Muslim countries MORE.
When asked about Trumps plans for further tax cuts in a press call last week hosted by the presidents campaign, Vice President Pence mentioned the presidents interest in a payroll-tax cut.
A payroll-tax cut would put money in the pockets of working Americans, Pence said.
Whether a payroll-tax cut is included in the next package may depend on a number of factors, including how other contentious issues are resolved.
Marc Gerson, a former congressional tax aide who now leads the government affairs practice at Miller & Chevalier, said the amount, said that the amount of tax relief in the bill may depend on the overall size of the package and how the measure deals with other issues, such as unemployment insurance, aid to state and local governments and liability protection for businesses.
A payroll-tax cut, even if its only on the employee side, could potentially be extremely expensive, he said.
Juliegrace Brufke and Jordain Carney contributed.