President Donald Trump’s top economic adviser said on Tuesday that the White House wants to boost the U.S. economy due to fears over the coronavirus outbreak by eliminating the payroll tax through the end of 2020.
The director of the National Economic Council, Larry Kudlow, told the media at a press conference held by the White House coronavirus task force, that the president’s stimulus package included the “payroll tax holiday” in addition to assistance for workers who do not have paid sick leave, as well as tax deferrals for industries affected by the outbreak.
“We are working out details right now, so I don’t want to quote any numbers right now,” Kudlow said. “The outline of the thing is very important. The payroll tax holiday is probably the most important part of this.”
The director also indicated that while payroll tax makes up a huge part of the money that goes into the federal budget, it would provide a “big growth pay off” to the economy and “help deal with the challenges over the next few months” as the country battles the recent outbreak of the coronavirus.
“The payroll tax holiday is a bold move and this has always been a bold president,” Kudlow said, adding that the money lost from temporarily eliminating the tax will be made up “with much better economic growth.”
The temporary suspension of the payroll tax would lower the tax rate from 14.2 percent down to zero, with the Trump administration hoping that giving the American working people some extra money in their paychecks will help to boost our economy, which has been shaken by the outbreak of coronavirus in the U.S.
This brilliant strategy by the president is not going to be put into action, though, until lawmakers on both sides agree to a compromise.
Even Trump’s loyal GOP allies are not completely on board with his plan and Democrats, of course, prefer their plan which includes low or no-cost virus testing, unemployment insurance benefits, and sick pay for those who can’t work while sick or while their places of employment are shut down.
In addition to the payroll tax relief, the president said he wants assistance for hourly-wage workers so that they are “not going to miss a paycheck” and “don’t get penalized for something that’s not their fault.” Trump also mentioned small business loans for those affected.
House Speaker Nancy Pelosi told House Democrats they would keep working this week despite concerns about the risk of infection at the Capitol. Trump assigned Treasury Secretary Steven Mnuchin to meet with Pelosi to get the support needed for a deal to go through a divided Congress, where Republicans hold the Senate majority, but Democrats hold the House.
Mnunchin said his meeting with Pelosi was “productive” and that they would “work together on a bipartisan basis to figure out how we can get things done quickly.”