Administration

Kudlow says he believes Trump will sign payroll tax cut order

White House economic adviser Larry Kudlow said Friday that a draft executive order suspending the payroll tax was nearly completed and that he thinks President Trump will sign it.

“I believe he will,” Kudlow said during an appearance on Fox Business when asked whether Trump would use his executive authority to cut the payroll tax. “The legal drafting is complete. We have had intense discussions about this in the last several days.”

“I don’t want to make a prediction; it’s up to him to inform the public if he is satisfied with the work that’s been done,” Kudlow then added. “But we are hard into it and other areas.”

Trump has repeatedly signaled this week that he is prepared to act unilaterally through executive orders on economic recovery priorities if stimulus negotiations between the White House and Congress do not progress.

But taking action on the payroll tax cut could be particularly controversial since lawmakers in both parties have ben cool to the idea.

Trump has indicated that aides are working on potential executive orders to temporarily suspend the payroll tax, reinstate a federal moratorium on evictions, reinstate lapsed additional unemployment insurance benefits and suspend federal student loan payments. He told reporters on Thursday that he could sign executive orders as early as Friday afternoon or Saturday, while noting that discussions between administration officials and Democratic leaders were still ongoing on Capitol Hill.

Trump has been urged by a pair of conservatives to declare a national emergency and enact a payroll tax cut by deferring the tax payments and pledging to later sign a bill forgiving the repayments.

Legal experts say that Trump’s authorities are limited, however.

Daniel Hemel, a professor at University of Chicago Law School, told The Hill earlier this week that the Treasury secretary can delay deadlines for payments of payroll taxes but cannot order employers to increase their employees’ take-home pay by the amount that would have been withheld.

Hemel also said employers would likely object to passing along the savings unless they are certain that Congress will eventually pass legislation forgiving the repayments.

Trump has pushed for a payroll tax cut to be included in the next stimulus relief bill, but he was rebuffed by Democrats and Republicans. The measure was not included in the GOP Senate proposal released at the beginning of last week.

Kudlow’s remarks on Friday came after a tenth meeting Thursday evening between White House chief of staff Mark Meadows, Treasury Secretary Steven Mnuchin, House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) that seemed to yield little progress towards reaching an agreement on the next stimulus package.  

“The talks are rather stalemated right now. There was a better tone earlier this week,” Kudlow said on Fox Business.

Kudlow emphasized that Trump was “not bluffing” and prepared to lean on his executive power to move forward on economic priorities, though he didn’t give a precise timeline as to when Trump would or might act. Stimulus negotiations are expected to continue in some form on Friday, a day by which both sides said earlier this week they hoped to reach some kind of agreement.

“He is intent on using all of the federal power levers at his disposal and if we have to do executive orders, he will do them,” Kudlow said. 

Trump is currently at his golf club in Bedminster, N.J., and currently is not expected to have any public events on Friday.

Tags Charles Schumer Coronavirus COVID-19 Donald Trump Eviction moratorium Jobs Larry Kudlow Mark Meadows Nancy Pelosi Payroll tax cut ppp Steven Mnuchin Unemployment

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