Trump revives call for payroll tax cuts in ‘phase four’ coronavirus relief package

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President Trump on Friday renewed his calls for a broad payroll tax cut as a way to ease the economic pain caused by the coronavirus pandemic after he had previously called for such cuts last month.

The CARES Act, the official name of the $2.2 trillion economic stimulus and virus-fighting legislation passed late last month, does allow for employers to defer their payroll tax payments but does not actually cut the levies, which are largely used to fund entitlements like Medicare and Social Security.

"Democrats are blocking a 251 Billion Dollar funding boost for Small Businesses which will help them keep their employees," Trump tweeted Friday morning. "It should be for only that reason, with no additions. We should have a big Infrastructure Phase Four with Payroll Tax Cuts & more. Big Economic Bounceback!"

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The president was referring in part to an interim bill to boost a small business loan fund that Senate Democrats blocked Thursday, instead seeking additional funding that GOP lawmakers rejected. But aside from that, lawmakers and Trump are weighing another much larger package in which the president also wants to include infrastructure spending.

Trump's tweet borrowed some of the wording he used in economic predictions at his Thursday evening White House coronavirus task force briefing.

"I think that what's going to happen is we're going to have a big bounce rather than a small bounce," Trump said of a potential economic recovery after the pandemic threat subsides. "But we will be back."

Labor Secretary Eugine Scalia also spoke optimistically about a potential American economic resurgence.

"The president spoke at the State of the Union of the blue-collar boom we were experiencing. We want to lay the groundwork now for a blue-collar bounceback," he said. "We'll get there in part by helping companies hold on to their workers, which is what the paycheck protection program does, keep them on payroll so that when businesses are ready to reopen, they have the workers they need."

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Any economic comeback could face challenges, however, from a number of factors. The deficit the federal government is running up could cause headwinds -- a payroll tax cut, on top of more than $2 trillion already allocated, could further swell that figure -- as could an unemployment benefits expansion included in the CARES Act that Republicans have said incentivizes people not to work. Additionally, it is unclear when the virus will be under control enough for the economy to get back on track, despite optimistic predictions from Trump himself.

Dr. Anthony Fauci, the face of the White House's coronavirus response, predicted earlier this week that schools could be opened for in-person classes by the fall. Dr. Zeke Emanuel, an adviser to the Biden campaign, on the other hand, warned this week of a potential 18-month lockdown in order for the U.S. to beat back the virus.