President Donald Trump told Republican senators Tuesday that “he wants a payroll tax holiday through the November election so that taxes won’t go back up before voters decide whether to return him to office,” according to a Bloomberg report citing three people familiar with the president’s remarks.
The Trump administration met Tuesday afternoon with House Republicans, including Senate Majority Leader Mitch McConnell, R-Ky., to discuss a stimulus package to help mitigate the economic effects of the coronavirus.
Administration officials are still working out the details of the plan, Bloomberg reported.
The Dow Jones Industrial Average and the S&P 500 both rose nearly 5% on Tuesday. The yield on 10-year Treasury bonds rose more than 25 basis points to 0.8%.
Trump on Monday proposed cutting payroll taxes, saying such a move would provide “very substantial relief.”
Said Trump: “We are going to take care of, and have been taking care of, the American public and the American economy.”
Lawmakers and Social Security advocates wasted little time in criticizing that idea.
“Focusing on economic assistance first is the wrong approach,” Rep. Don Beyer, D-Va., vice chair of the Joint Economic Committee, stated on Tuesday morning during the Democratic Caucus’ weekly press briefing. “If we just want to protect the economy, the very first thing we have to do is protect public health and the people directly impacted by the coronavirus.”
Beyer stated that “part of the dilemma with the payroll tax cut is that if you’ve lost your job, or you’re in the gig economy, or many other things, [then] you’re not going to get anything. Or if you’re with so many Americans making $25,000 or less, then it ends up being like $10 a week, [which is] not enough to really do anything. So among the many things that we must consider to get the stimulus going again, direct payments will at least be part of that.”
Senate Finance Committee Ranking Member Ron Wyden, D-Ore., said a potential payroll tax cut was “not the best answer” to halting economic fallout from the coronavirus.
“The best way to prevent economic damage is to stop the spread of the virus,” Wyden said in a statement. “President Trump isn’t going to wriggle out of addressing this growing public health crisis with tax cuts. A payroll tax cut can be an effective tool, but it’s not the best answer in this case. A payroll tax cut would do little to help workers without paid sick days or those who have lost shifts and tips.”