Finance

Mnuchin: Payroll tax cut won’t be in GOP coronavirus bill

Treasury Secretary Steven Mnuchin on Thursday indicated that a payroll tax cut won’t be in the coronavirus relief bill that Senate Republicans are expected to start unveiling shortly.

“It won’t be in the base bill,” he said on CNBC. He added that a payroll tax cut could be part of a subsequent coronavirus relief package.

President Trump has said that a payroll tax cut is a must-have for him. But Democrats, as well as a number of key Republicans, have opposed the idea, expressing concerns about the impact a payroll tax cut would have on the Social Security trust fund.

When Senate Majority Leader Mitch McConnell (R-Ky.) previewed the GOP proposal earlier this week, he didn’t mention the payroll tax cut idea but said the package would include a second round of direct payments for Americans.

Mnuchin suggested that a second round of direct payments could get more money to people quicker than a payroll tax cut could.

“We think the payroll tax cut is a very good, pro-growth policy, but the president’s focus is, he wants to get money into people’s pockets now because we need to reopen the economy,” he said. “One of the issues I think you know about the payroll tax cut is, people get that money over time, so the president’s preference is to make sure that we send out direct payments quickly, so that in August, people get more money.”

Mnuchin also said that enhanced unemployment insurance will not be extended at the current rate of $600 per week. Instead, the bill would provide for benefits that are based on “approximately 70 percent wage replacement.” 

The $600 weekly boost to unemployment benefits expires at the end of this month. Democrats want to extend the enhanced benefits at that amount, but Republicans argue that that amount is too high.

“We’re not going to continue it in its current form because we’re not going to pay people more money to stay at home than work, but we want to make sure that the people that are out there that can’t find jobs do get a reasonable wage replacement,” Mnuchin said.

Other elements of the GOP package are slated to be $105 billion for schools, liability protection and tax credits to incentivize companies to hire workers, Mnuchin said.

Senate Republicans are expected to start rolling out their proposal on Thursday. Any coronavirus relief package will need bipartisan support to become law.

Tags Coronavirus COVID-19 Donald Trump Mitch McConnell Payroll tax cut Steven Mnuchin
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