- Senate Republicans are removing the payroll tax cut from their initial coronavirus relief bill in favor of stimulus controls, Treasury Secretary Steven Mnuchin said Thursday.
- “We think cutting payroll taxes is a very good pro-growth policy. But the president’s focus is that he wants to put money in people’s pockets now because we need to reopen the economy,” Mnuchin said in “SquawkBox” from CNBC.
- Trump had insisted on including the payroll tax cut, and the development marks a dramatic reversal for the White House.
- Visit the Business Insider home page for more stories.
Senate Republicans are removing the payroll tax cut from their initial coronavirus relief proposal in favor of a second round of stimulus controls, Treasury Secretary Steven Mnuchin said Thursday.
Mnuchin said the measure “will not be on the base invoice.”
“We believe that reducing payroll taxes is a very good pro-growth policy. But the president’s focus is that he wants to put money in people’s pockets now because we need to reopen the economy,” Mnuchin said in an interview at CNBC’s “SquawkBox”. “
—Squawk Box (@SquawkCNBC) July 23, 2020
He added that President Donald Trump prefers “to send direct payments quickly so that in August people will get more money,” and he did not rule out looking for it in other legislation in the future.
Development is a remarkable turnaround for the Trump administration. The president previously said in a Fox News Sunday interview that he would consider not signing a stimulus package if it did not contain the payroll tax cut.
Trump had repeatedly insisted that the measure would be good for the economy, posing a stumbling block for Republicans who were largely cool with the idea as they designed their initial coronavirus relief bill over the past week.
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They worked to keep the amount of spending below $ 1 trillion, and cutting payroll taxes would have significantly increased the cost of the legislation depending on its design.
Republican Senator Chuck Grassley, the Senate’s chief financial officer, said Monday that a stimulus check would generate more economic momentum than a payroll tax cut, as direct payments give people a sum of money upfront instead of a salary increase that is distributed among paychecks. hour. Democrats were against the tax exemption.
Republicans are expected to release their coronavirus relief plan on Thursday.
Economists and many legislators on both sides who reduce the amount of taxes deducted from paychecks of people employed to finance Social Security and Medicare would not benefit the estimated 20 million unemployed Americans.
Seth Hanlon, a left-wing Center for American Progress tax policy expert, previously told Business Insider: “It is a policy designed to benefit people who work. It benefits people who earn more and does nothing for people without job “.
