The Washington Post, Trump still wants a payroll-tax cut for the coronavirus, and it's still unlikely he'll get it (May 6, 2020)

Summary

In this Washington Post analysis for The Fix, dated May 6, 2020, staff writer Amber Phillips writes that President Trump still wanted Congress to cut payroll taxes for workers and employers until the end of the year but was unlikely to get it in the next aid package. Phillips notes that four coronavirus aid packages totaling $3 trillion had passed without it. The reasons given: a cut would come out of the Social Security fund; eliminating the tax for employees and employers would cost about $90 billion a month, congressional aides estimated, or about $1 trillion a year; and it would not help the 30 million Americans who had filed for unemployment. The piece quotes Sen. Charles E. Grassley, Sen. Ron Wyden, Senate Minority Leader Charles E. Schumer, Senate Majority Whip John Thune and Senate Majority Leader Mitch McConnell.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Democracy Dies in Darkness

The Fix

Trump still wants a payroll-tax cut for the coronavirus, and it’s still unlikely he’ll get it

Analysis by Amber Phillips

Staff writer

May 6, 2020 at 11:05 a.m. EDT

Comment

Gift Article

President Trump returned throughout his efforts to respond to the economic calamity caused by the coronavirus to one prescription: He wants Congress to cut payroll taxes for workers and employers until the end of the year. He mentioned it in his first major national address about the virus in March, yet nearly two months and four coronavirus aid packages totaling $3 trillion later, Congress still hasn’t embraced it.

Get the full experience. Choose your plan

Well run States should not be bailing out poorly run States, using CoronaVirus as the excuse! The elimination of Sanctuary Cities, Payroll Taxes, and perhaps Capital Gains Taxes, must be put on the table. Also lawsuit indemnification & business deductions for restaurants & ent. — Donald J. Trump (@realDonaldTrump) May 5, 2020

As Congress debates a fifth aid package, the one thing both parties immediately agree on is they do not want that. Why? As Trump frames it, it sounds helpful: More money in Americans’ pockets to help lift up a dramatically recessed economy. “I think, frankly, it’s simple,” Trump said in late April. "It’s not the big distribution, and it would really be an incentive for people to come back to work and for employers to hire.”

But Congress says it is an expensive, unrealistic effort that could paper over the real economic struggles that the coronavirus has wrought. Here’s why Trump has not gotten a payroll-tax cut on the books yet and probably will not in this round of legislation:

Any tax break on paychecks would come out of the Social Security fund: That would risk seriously denting it or even depleting it.

Congress’s first major legislation included a two-year delay for employers to pay their payroll taxes, but the ding to safety net programs was negligible because employees pay most of those taxes, according to the independent Tax Foundation . That’s as far as Congress seemed willing to go.

That is the primary reason Republicans oppose a cut, said a senior Republican Senate aide. The chairman of the Senate Finance Committee, Sen. Charles E. Grassley (R-Iowa), indicated Tuesday that it could hurt Republicans. He worried “that the tax cut could drain retirement funds or leave older Americans with the view that Congress doesn’t take ‘seriously’ the plight of the Social Security Trust Fund,” reports Politico’s Burgess Everett .

It is super expensive: Eliminating the payroll tax for both employees and employers would cost the government about $90 billion a month, aides in Congress estimated. Multiply that over the entire year and you’re looking at about $1 trillion in lost government revenue.

The New York Times’ Jim Tankersley put that in perspective back in March: That’s more than the 2008 Wall Street bailout or the 2009 stimulus bill to prop up the economy after the crash that ignited the Great Recession. Democrats in Congress need that money to help fund their proposal to give struggling state and local government $1 trillion in aid.

Why Congress probably isn't going to let states go bankrupt

It would not help the 30 million Americans who have filed for unemployment since this crisis began. And when America does reopen and get back to work, a payroll tax cut will not help shift workers or those who rely on tips, said Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, in March. That is because most of their money does not come from paychecks.

Here’s how Senate Minority Leader Charles E. Schumer (D-N.Y.) described the idea of a payroll-tax cut in March: “We don’t think they should just throw money out of an airplane and hope some of it lands on the people who are affected.”

Republicans are not quite as vocal about their opposition to this, given their reluctance to upset Trump. But as the Republican-controlled Senate returned to Washington, D.C., this week, they have made clear this is not something they are seriously considering, no matter how much Trump tweets about it.

“I think some of the things that we are currently doing are having a bigger impact,” said Senate Majority Whip John Thune (R-S.D.), the No. 2 Senate Republican, on Monday.

When reporters asked Senate Majority Leader Mitch McConnell (R-Ky.) about the payroll tax cut, he all but ignored it, saying: “If there’s any red line, it’s on litigation.”

This post has been updated.

Coronavirus: What you need to know

Where do things stand? See the latest covid numbers in the U.S. and across the world . In the U.S., pandemic trends have shifted and now White people are more likely to die from covid than Black people .

The state of public health: Conservative and libertarian forces have defanged much of the nation’s public health system through legislation and litigation as the world staggers into the fourth year of covid.

Grief and the pandemic: A Washington Post reporter covered the coronavirus — and then endured the death of her mother from covid-19. She offers a window into grief and resilience .

Would we shut down again? What will the United States do the next time a deadly virus comes knocking on the door?

Vaccines: The CDC recommends that everyone age 5 and older get an updated covid booster shot . New federal data shows adults who received the updated shots cut their risk of being hospitalized with covid-19 by 50 percent. Here’s guidance on when you should get the omicron booster and how vaccine efficacy could be affected by your prior infections.

For the latest news, sign up for our free newsletter .

File and source

File: b128-wb20230407140254.html
Size: 368,137 bytes
SHA-256: 3170c52856895f6a805e920f2daa2fd28625134d3947f24cd3b2053707cf3f8e
Our copy: b128-wb20230407140254.html
Original: www.washingtonpost.com