President Donald Trump won’t see a payroll tax cut — something he has been pushing for — in the Senate GOP’s new trillion-dollar COVID-19 pandemic relief package.
Senate Majority Leader Mitch McConnell (R-Ky.) also expects the proposal to include reduced unemployment benefits for millions of workers, the Washington Post reported. Americans left jobless by the pandemic have been receiving an extra $600 a week as part of the first stimulus package; that money dries up at the end of July.
Trump pushed hard for the payroll tax cut as late as over the weekend. On Sunday, he told Fox News: “I would consider not signing [the relief bill]if we don’t have a payroll tax cut.”
By Thursday, Treasury Secretary Steven Mnuchin was still talking about a payroll tax cut but at a later time — in another bill. McConnell, however, has signaled that the new package will be the last major one from Congress.
“Let me be clear: 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,” Mnuchin said. “The president’s preference is to make sure we send out direct payments quickly so that in August people get more money.”
On Thursday, the Labor Department reported that another 1.4 million people filed initial unemployment claims last week.
The Republican plan would include 70% wage replacement, which would do away with the enhanced benefit.
“We’re not going to continue in its current form because we’re not going to pay people more money to stay at home than work,” Mnuchin said. “We want to make sure that the people out there who can’t find jobs do get a reasonable wage replacement — so it will be based on approximately 70% wage replacement.”
Some Democrats have already criticized the GOP’s unemployment insurance proposal. They want the $600 in extra cash to stay in place.
House Majority Leader Steny H. Hoyer (D-Md.), called it “absolutely wrong.”
“The unemployment insurance is absolutely essential… And if [McConnell] wants to negotiate some alternative figures, fine, put them on the table, let’s talk about them,” Hoyer said. “But don’t keep twiddling your thumbs while the American people are burning from a virus and a tanking economy.”
Not all Republicans agree with the cut in unemployment benefits.
“We cannot allow there to be a cliff in unemployment insurance given we’re still at about 11% unemployment,” said Sen. Rob Portman, (R-Ohio).
The GOP bill is also expected to include a new round of $1,200 payments to Americans, as well as $70 billion for elementary and secondary schools, and funds for coronavirus testing and tracing.
Sen. Marco Rubio (R-Fla) also said GOP legislation will provide a boost for small business lending in the Paycheck Protection Program, the Associated Press reported.
“It’s going to be big,” he said.
The Republican proposal also seeks to protect businesses, schools and other entities from COVID-19-related lawsuits.