The White House is doubling down on Trump's proposed payroll-tax cut, even amid weak support from Senate Republicans
- The White House is still calling for a payroll-tax cut, even with thin support among Senate Republicans.
- In a statement, a White House representative said the tax break "must" form a piece of the next economic-relief package.
- But Republicans have expressed skepticism about the effectiveness of a payroll-tax cut to boost the economy.
- Sen. Susan Collins described such a tax cut as "extremely expensive" and said it "would only benefit individuals who are working" and "also would displace other spending that I think is far more important."
The White House is digging in on a payroll-tax cut that President Donald Trump has championed, despite weak support from Senate Republicans who say it wouldn't be an effective measure to boost the economy.
A White House spokesman, Judd Deere, said in a statement issued to Business Insider on Tuesday that the tax break "must" form a piece of the next economic-relief package being designed by Congress.
"As he has done since the beginning of this pandemic, President Trump wants to provide relief to hardworking Americans who have been impacted by this virus, and one way of doing that is with a payroll-tax holiday," Deere said. "He's called on Congress to pass this before, and he believes it must be part of any phase-four package."
The same statement was given to The Washington Post last week before talks started in earnest on Monday — and before Republicans fell into disarray over the size of the spending package and which priorities to pursue.
Payroll taxes are the 7.65% of earnings taken out of employee paychecks and another 7.65% that's levied on employers to finance the Social Security and Medicare trust funds. If a cut or outright holiday is implemented, it would bump workers' take-home pay, though at a hefty cost to the federal government.
But it wouldn't do much for the estimated 20 million Americans who are out of work.
Trump pushed the payroll-tax cut in March as the economy cratered. Lawmakers from both parties rebuffed the idea in the $2 trillion CARES Act, but the president now appears determined to push the measure again.
In a Fox News interview that aired Sunday, he threatened to tank the economic-relief bill if a payroll-tax holiday wasn't included. Republican lawmakers, however, are largely cool to it. Trump's demand has complicated the GOP's efforts to keep spending levels below $1 trillion.
Sen. Susan Collins of Maine told reporters that the tax break would absorb a significant amount of federal spending that was needed for other priorities.
"A payroll-tax cut is extremely expensive," Collins said, adding that it "would only benefit individuals who are working" and "also would displace other spending that I think is far more important."
Sen. John Thune of South Dakota criticized the payroll-tax cut and said a stimulus check would generate bigger economic benefits.
"I'm not a fan of that," Thune said. "If it's a choice between doing checks and payroll-tax cut, I think it's pretty clear the checks actually have a more direct benefit to the economy."
That was echoed Monday by the Senate Finance Committee chair, Chuck Grassley. In an interview with CNN, Grassley said he thought checks would "do more economic good than if we dribble out $30 every paycheck."
Senate Majority Leader McConnell said on Tuesday that Republicans backed a second round of stimulus checks, though details on the cash payments remain scarce.
Yet GOP lawmakers are still deeply divided on other components to include in another economic-relief package, such as boosted unemployment benefits. Those expire within five days.
"I'm going to introduce a bill in the next few days that is a starting place, that enjoys fairly significant support among Republican senators," McConnell said after the Senate Republican lunch. "Probably not everyone."