Trump says he'll block virus aid unless Congress cuts taxes for businesses

Donald Trump on Sunday said he will not approve any more aid for the tens of millions of Americans who have lost their jobs as a result of the novel coronavirus pandemic unless Congress cuts taxes for businesses.

“We’re not doing anything without a payroll tax cut,” Trump said Sunday night during a Fox News town hall.

A payroll tax cut would cut taxes for businesses and for employees who are still receiving paychecks, but would do nothing to aid the more than 30 million Americans who have been laid off.

Experts say a payroll tax cut wouldn’t help create jobs.

“When you do a temporary tax cut like what the White House is proposing, the literature generally finds there isn’t a big effect on employment levels,” Garrett Watson, an analyst at the Tax Foundation think tank, told ABC News.

Payroll taxes go toward funding Social Security and Medicare — two programs already facing financial strain. With millions out of work and no longer contributing to the popular safety net programs, that strain could grow even greater.

With the federal budget deficit already enormous thanks to the tax law passed by Republicans in 2017, the trillions of dollars in coronavirus relief aid Congress is now passing have only added to it; a payroll tax cut would explode the deficit even more.

Some Republicans, such as Indiana Sen. Mike Braun, are against the proposal.

“I think there are going to be a lot of fiscal conservatives, and I think that’s going to go deeper into the conference than normal,” Braun told the Hill in March. “My gut is there’s going to be folks not interested in doing it quickly.”

Trump’s insistence on a payroll tax cut could intensify the expected battle on Capitol Hill over the next coronavirus relief package.

Democrats are pushing for hazard pay for essential workers and aid to state governments facing massive budget shortfalls.

But GOP lawmakers don’t want to help aid state governments, saying it’s unfair that their constituents should have to bail out what they say are states badly run by Democratic governors.

Additionally Republicans want to ban Americans from suing their employers if they contract the coronavirus on the job, with Senate Majority Leader Mitch McConnell claiming he will block any relief legislation that does not contain the measure.

Published with permission of The American Independent Foundation.