Finance

White House doubles down on payroll-tax cut opposed by GOP senators

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White House chief of staff Mark Meadows told reporters Tuesday that President Trump is committed to including a payroll-tax cut in the next coronavirus relief bill despite firm opposition from Senate Republicans.

Emerging from a meeting with Senate GOP negotiators, Meadows said Trump is holding firm on his demand that the new legislation cut payroll taxes for employees, after the CARES Act from late March allowed employers to defer parts of their 2020 payroll taxes for two years.

“The president is very committed to a payroll tax deduction,” Meadows said after meeting with Republicans in the Senate Appropriations Committee’s offices.

Asked if Trump views the payroll-tax cut as a “red line,” Meadows responded: “I don’t think that in any negotiations that there are red lines but there are certainly high priorities and it will remain a very high priority for the president.”

Trump told Fox News’s Chris Wallace in a recent interview that he would consider vetoing the coronavirus relief legislation if it doesn’t include a payroll tax holiday.

“I would consider not signing it if we don’t have a payroll-tax cut,” the president said.

Senate Republicans, however, remain opposed to the idea, though they’re not ruling it out completely.

“I’m not a fan of that, I’ve been very clear about that,” Senate Republican Whip John Thune (R-S.D.) told reporters Tuesday.

“We’ll see what it looks like, but if it’s a choice between doing [stimulus] checks and a payroll-tax cut, I think it’s pretty clear that the checks have a more direct benefit to the economy,” he added. “I think consumers are more likely to spend a check they get in the mail than some slight plus-up that they get — that probably automatically gets deposited in their bank account in the fourth quarter of this year.”

Other Republican lawmakers have also weighed in against the proposal.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) told reporters Monday that a payroll-tax cut “creates a public relations problem” because “people think we’re raiding the Social Security fund.”

The CARES Act included a payroll tax holiday for employers that allows them to defer 50 percent of their tax obligation to 2021 and the other half to 2022.

It also created a refundable payroll-tax credit for certain wages that businesses pay their employees.

Senate Democrats said they were vehemently opposed to a payroll tax holiday being included in the CARES Act but they eventually accepted tax relief that was limited to employers.

Naomi Jagoda contributed.

Tags CARES Act Chris Wallace Chuck Grassley Coronavirus COVID-19 Donald Trump John Thune Mark Meadows Pandemic Payroll tax cut
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