GOP Initially Agrees to Payroll Tax Cut in First Draft Relief Bill

The Trump administration and Republican congressional leaders have verbally committed to putting a payroll tax cut as part of any initial proposal for a fifth round of coronavirus economic aid, but some are suggesting it might not make it to the end.

Treasury Secretary Steve Mnuchin told reporters "it's in the bill" following a meeting with White House chief of staff Mark Meadows, Senate Majority Leader Mitch McConnell, R-Ky., House Minority Leader Kevin McCarthy, R-Calif., and President Donald Trump, who personally pitched the idea, TheHill.com reported.

Meadows said the payroll tax cut "plans to be in it."

The payroll tax is a 7.65% deduction from each worker's paycheck for Social Security and Medicare. Employers pay an equivalent tax for each worker.

"It's a tremendous saving and an incentive for companies to hire their workers back and to keep their workers," Trump said after the meeting, according to Politico.

But Trump faces headwinds from his own party, including Senate Finance Committee Chairman Chuck Grassley, R-Iowa, who thinks one big check is better than a small boost every pay period.

"I think that when a person has a check in his hand . . . that's going to do more economic good than if we dribble out $30 every paycheck," he said.

Meadows and Mnuchin were scheduled to meet with GOP senators for lunch Tuesday after meeting earlier in the day with Senate Appropriations Committee Chairman Richard Shelby, R-Ala., Senate HELP Committee Chairman Lamar Alexander, R-Tenn., and Sen. Roy Blunt, R-Mo.

A meeting with Democrats, House Majority Leader Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., is scheduled for Tuesday afternoon.

Another Republican not in favor is Sen. John Thune, R-S.D., who appeared to doubt the measure would last.

"I would say that it is a big priority, as you know, for the president," said Thune, who added different Republicans are against the idea for different reasons. "And so his advocates, Mnuchin and Meadows and others, I think will probably try and ensure that it's at least included in the first draft.

"Let's put it that way." 

Republicans are more united on other items expected to be included in their $1 trillion proposal, including reducing unemployment insurance taxes and additional direct payments to Americans, according to Politico. Democrats have voiced strong opposition to a payroll tax cut.

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