President Trump said he will discuss a payroll tax cut and financial assistance for hourly wage workers with members of the Republican-led Senate Tuesday as a response to the growing coronavirus outbreak and its effects on the economy.
The tax cut, Trump said at a press conference Monday evening, will be “relief, very substantial relief. That’s a big number.”
“We’re also going to be talking about hourly wage earners getting help so that they can be in a position where they’re not going to ever miss a paycheck,” he said.
Treasury Secretary Steven Mnuchin said at the press event that the administration would seek to provide aid to workers forced to stay home because of quarantines or to provide care for relatives.
Trump also said his administration would be offering financial assistance to the travel industry as well as “creating loans for small businesses” that have suffered from the struggling economy.
He said the administration will also seek to shore up airline and cruise ship companies hurt by restrictions on travel.
“We’re also working with the industries, including the airline industries and the cruise ship industry, which obviously will be hit, and we’re working with them very strongly,” Trump said. “We want people to travel to certain locations and not to other locations at this moment. And, hopefully, that will straighten out sooner rather than later.”
Trump said that the administration would provide more detail about the economic package on Tuesday.
“I think what we’ll be doing is having a news conference tomorrow to talk about various things that we’re doing economically that’ll be very major,” Trump said. “We have a great economy, a very strong economy, but this blindsided the world.”
Past administrations have turned to payroll tax credits as a form of short-term stimulus. President Barack Obama’s 2009 stimulus package included a tax credit that operated similarly to a payroll tax cut. In subsequent years, Congress reupped the break as a 2 percentage point payroll tax holiday.
Yet, outside economists have criticized the idea as a response to the coronavirus outbreak on the grounds that it wouldn’t get money in workers’ pockets fast enough. “It would be too slow and dispersed to substantially stimulate the economy, as households would receive only a modest benefit every pay period,” former Obama economist Jason Furman wrote in the Wall Street Journal.
Chuck Grassley, the Iowa Republican who leads the Senate Finance Committee, is also exploring ideas for tax relief. A spokesman for the committee said Monday that “several options within the committee’s jurisdiction are being considered as we learn more about the effects on specific industries and the overall economy.”
Congressional Democrats, however, may be cool to the idea of a payroll tax cut. “Let me be very clear: The best way to ensure economic security for the American people right now is to deal with the coronavirus itself, competently and full-on, something we haven’t yet seen,” Senate Democratic leader Chuck Schumer said Monday in discussing the possibility that Trump would seek fiscal stimulus.
The president is also slated to meet with Wall Street executives Wednesday to discuss this week’s market volatility.