Republicans drop tax cut from aid plan
Trump payroll idea falls as Senate allies object
The White House reluctantly dropped its bid to cut Social Security payroll taxes Thursday, yielding to opposition by top Senate allies, as Republicans prepared to unveil a COVID-19 rescue package.
The cut in the tax that finances Social Security and Medicare had been a major demand of President Donald Trump. Senate Majority Leader Mitch McConnell’s $1 trillion package is an opening GOP bid in talks with Democrats, who back a $3.5 trillion House bill that passed two months ago.
WASHINGTON – The White House reluctantly dropped its bid to cut Social Security payroll taxes Thursday as Republicans prepared to unveil a $1 trillion COVID-19 rescue package, yielding to opposition to the idea among top Senate allies.
“It won’t be in the base bill,” said Treasury Secretary Steven Mnuchin, speaking on CNBC about the payroll tax cut, killing the idea for now. The cut in the tax that finances Social Security and Medicare has been a major demand of President Donald Trump.
“The president is very focused on getting money quickly to workers right now, and the payroll tax takes time,” Mnuchin said at the Capitol. Only Sunday, Trump said in a Fox News interview that “I would consider not signing it if we don’t have a payroll tax cut.”
The long-delayed legislation comes amid alarming developments on the virus crisis. It was originally to be released Thursday morning by Senate Majority Leader Mitch McConnell, but he instead hosted an unscheduled meeting with Mnuchin and White House chief of staff Mark Meadows and delayed the planned release of his proposal.
Afterward, Mnuchin declared the administration had reached a “fundamental agreement” with Republicans.
McConnell’s $1 trillion package is an opening GOP bid in talks with top Capitol Hill Democrats – who back a $3.5 trillion House bill that passed two months ago – in a negotiation that could be rockier than talks in March that produced a $2 trillion rescue package. GOP senators and Trump are at odds over priorities, and Democrats say the Republican plans are not nearly enough to stem the health crisis, reopen schools and extend aid to jobless Americans.
“Our Republican colleagues have been so divided, so disorganized and so unprepared that they have to struggle to draft even a partisan proposal within their own conference,” said Democratic leader Chuck Schumer.
The must-have centerpiece for McConnell is a liability shield to protect businesses, schools and others from coronavirus-related lawsuits.
The package is not expected to provide any new money for cash-strapped states and cities, which are clamoring for funds, but Republicans propose giving $105 billion to help schools reopen and $15 billion for child care centers to create safe environments for youngsters during the pandemic.
The GOP measure does forge an immediate agreement with Democrats on another round of $1,200 checks to most American adults.
The $600 weekly unemployment benefit boost that is expiring Friday would be cut back, and Mnuchin said it would ultimately be redesigned to provide a typical worker 70% of his or her income. Republicans say continuing the $600 benefit as Democrats want is a disincentive to work, but some Republicans are pressing for a temporary extension of the current benefit if the talks drag.