Trump Demands Payroll Tax Cut in Next Relief Bill or He May Refuse to Sign

July 20, 2020 Updated: July 20, 2020

President Donald Trump insisted that the next COVID-19 relief bill must contain a payroll tax cut and liability protection for businesses, otherwise he might not sign it into law.

Trump made the remarks during a July 19 interview with Fox News’ Chris Wallace, with the president saying, “I would consider not signing it if we don’t have a payroll tax cut, yes.”

Wallace asked Trump how key is the presence in the next stimulus package of the tax cut and a liability waiver, which, according to draft relief bill provided by Senate Majority Leader Mitch McConnell (R-Ky.), seeks to grant liability protections to a wide range of entities, including government agencies, schools, colleges, and businesses.

“The Republicans say they want liability limits, which the Democrats don’t like. You say that you want a payroll tax cut, which even some Republicans are cool to,” Wallace said.

Trump responded, “A lot of Republicans like it, though.”

Asked whether he would refuse to sign a bill without the two provisions, Trump said: “Well, we’re going to see. But we do need protections because businesses are going to get sued just because somebody walked in. You don’t know where this virus comes from. They’ll sit down at a restaurant. They’ll sue the restaurant, the guy’s out of business.”

Trump claimed Democrats don’t want liability protection because “they’re totally captured by the lobby of lawyers.”

“The lawyers’ lobby is probably the most powerful in the country,” he said.

Stephen Moore, chief economist for the Institute for Economic Freedom and Opportunity, wrote in a recent op-ed in The Epoch Times that suspending payroll tax for the remainder of the year is “the best incentive to get businesses hiring again and get workers off unemployment.”

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Hundreds of people line up outside a Kentucky Career Center hoping to find assistance with their unemployment claim in Frankfort, Ky., on June 18, 2020. (Bryan Woolston/Reuters)

With reports of some workers making more money from unemployment benefits than on the job, critics argue the generous jobless benefits introduced by the COVID-19 relief bills so far have created a disincentive to go back to work.

“So far, Congress’s ‘stimulus’ plans have cost more than $2.1 trillion on short-term aid to workers, businesses, and states, but they haven’t stimulated much of anything other than government dependence,” Moore wrote.

“House Speaker Nancy Pelosi favors another $3 trillion spending bill that would actually encourage states to keep their economies shut down by paying their bills and incentivizing workers to stay unemployed for many more months by extending unemployment benefits that pay more than a job would.”

He said that even with some 35 million people unemployed in the United States, employers are having a hard time attracting workers.

“In 31 states today, welfare and unemployment benefits can pay more than work,” Moore wrote. “Of all the significant proposals in play right now, the only one that would actually create new hiring rather than discourage it would be the payroll tax suspension through Dec. 31, 2020.”

One of the criticisms of a payroll tax cut is that cutting workers’ taxes does nothing to help the unemployed.

“Wrong. It helps the unemployed the best way possible: by creating jobs and higher take-home pay when they do get a job,” he wrote.

“By reducing the payroll expenses for employers, the cost of hiring more workers falls—which helps get millions of people back to work.”

The battle in Congress over a new COVID-19 aid bill began on July 17 as Republicans were putting the finishing touches on draft provisions giving liability protections to entities restarting operations amid the pandemic.

A draft of McConnell’s plan would provide protections from lawsuits for at least four years for government agencies, “schools, colleges, charities, and businesses that follow public-health guidelines, and for frontline medical workers.”

The draft also contains provisions limiting liability for new products, such as types of personal protective equipment, if they meet certain Food and Drug Administration requirements.

Democrats have criticized Republicans for seeking liability protections in the bill, insisting that the aid package should focus instead on rescuing state and local governments struggling to cope with the fallout from the pandemic.

McConnell has said he hopes the next bill will not cost more than $1 trillion, while leading Democrats have vowed to fight for more, somewhere in the range of $3 trillion.

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