Seeking to ease some of the economic damage both already done and anticipated to come due to the COVID-19 outbreak, President Trump has proposed a few stimulus measures, including suspending the payroll tax at least through the election in November, if not the whole year, NBC News reported.
Trump’s proposal would see the current payroll tax rate of 14.4% slashed to zero to help stimulate consumer spending.
One White House official told CNBC that the president and a group of Republican legislators also discussed making the payroll tax cut permanent . The payroll tax funds Medicare and Social Security, and many other government services as well.
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Other measures the president floated include relief for hourly workers and small businesses, such as federal assistance for paid sick leave, as well as help for the airline and cruise industries, and the shale oil industry.
President Trump has pinned his re-election bid on the performance of the economy.
At rallies, the president has told crowds that, given the performance of the stock market and low unemployment rates, “You have no choice but to vote for me, because your 401(k) is down the tubes, everything’s going to be down the tubes,” should he not be re-elected, NBC News reported.
However, the stock market has already been on a roller coaster due to disruptions from the coronavirus as well as plunging oil prices.
The Dow Jones Industrial Average dropped 2,000 points in one day following a tough weekend for coronavirus news, but rebounded by 1,000 points the following day.
Trump’s payroll tax cut proposal has not received broad support, however.
Democratic lawmakers have largely come out against the proposal. As Rep. Don Beyer told Politico , “One of the dilemmas with the payroll tax is that … if you’ve lost your job, or you’re in the gig economy, or many other things, you’re not going to get [the cut], or if you’re like so many Americans making $25,000 or less, that ends up being $10 a week, not enough to really do anything. So among the many things that we must consider to get this stimulus going again … direct payments will be at least part of that.”
Even Republican lawmakers hesitated to support the president’s proposal.
Republican Senator John Cornyn told Politico, “Well, I usually love tax cuts, but I think it’s a little premature.” Other GOP lawmakers worried that a payroll tax cut would massively expand the deficit, according to Fox News .
But, with vacations and large events being canceled, and shoppers steering away from stores, it’s clear that something will need to be done sooner or later.
Democratic lawmakers have been assembling their own economic relief package.
They’re also in favor of paid sick leave for hourly workers, but their package would also address food insecurity and reinforce unemployment insurance protections for any workers laid off by the impact of the coronavirus.
“We are hoping to work with the administration on a coordinated, government-wide plan to respond to the coronavirus,” a statement from House Speaker Nancy Pelosi read.
