White House Considering Payroll Tax Cut to Stave Off Recession
With talks of a possible recession on the horizon, the Washington Post reports that the Trump White House is looking into ways to prevent that happening. One option currently being considered is a temporary payroll tax cut.
The talks are still in their early stages, and the officials have not decided whether to formally push Congress to approve the cut, these people said, speaking on condition of anonymity because they weren’t authorized to disclose internal discussions. But the White House in recent days has begun searching for proposals that could halt a slowing economy.
Millions of Americans pay a “payroll tax” on their earnings, a 6.2 percent levy that is used to finance Medicare and Social Security programs. The payroll tax was last cut during the Obama administration, to 4.2 percent, as a way to encourage more consumer spending during the recent economic downturn. But the cut was allowed to reset back up to 6.2 percent in 2013.
A payroll tax cut is a surefire way to keep the economy roaring along, which is why it's not likely that the Democrat-controlled House would ever pass such a cut. A recession before the 2020 election would make it very difficult for Trump to get reelected, and you better believe Democrats are hoping for a recession. Back in June, Bill Maher, the host of "Real Time" on HBO admitted that he's hoping for a recession to ensure Trump's defeat in 2020.
"I feel like the bottom has to fall out at some point, and by the way, I'm hoping for it because I think one way you get rid of Trump is a crashing economy. So please, bring on the recession. Sorry if that hurts people but it's either root for a recession, or you lose your democracy."
What incentive do Democrats have to do anything that might prevent or delay a recession? None. They would much rather see a recession if that gives them a slightly better chance of winning next year. So it will be interesting to see how the White House approaches this. While it's obvious that Trump could point to House Democrats' refusal to pass tax cuts as the reason for any future recession, does anyone really believe the media will push that narrative? Nope. They'll always want to blame Trump because they want him out of office as much as the Democrats do. I suspect the White House is also looking into ways they can unilaterally (and constitutionally) prevent a recession.