In his Oval Office address on Wednesday night, Donald Trump called on Congress to approve an "immediate" cut to payroll taxes, adding, "Hopefully they will consider this very strongly." Whether the president knows this or not, lawmakers in both parties have expressed deep skepticism about the idea.
Trump, however, will not be swayed. He referenced the same idea three times at a White House event yesterday, telling reporters, "I happen to think that a payroll tax cut would be a very good idea."
This morning, the Republican went a little further via Twitter:
"If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31. Then you are doing something that is really meaningful. Only that will make a big difference!"
By all accounts, there are negotiations underway between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on an economic package, but a payroll tax holiday isn't really in the mix.
And yet, there's Trump, not only endorsing the tax cut, but insisting that to "make a big difference," nothing else will do.
As is too often the case, he's mistaken. As we discussed the other day, under the status quo, 6.2% of American workers' paychecks are deducted to help fund the Social Security system. When there's a payroll tax cut -- as there was during Barack Obama's first term as president -- that number is temporarily reduced as a way to put some extra money in every paycheck. The government makes up the difference, paying into the Social Security fund so benefits remain unaffected.
Trump argued this morning that the cut gets money into people's hands "quickly," and there's some truth to that: if the payroll tax were temporarily scrapped, every American worker's paycheck would have a little more money in it right away.
But there are also some downsides, too. as The Atlantic's Annie Lowrey explained, a temporary payroll tax break tends to be small, insufficiently targeted, and largely meaningless to those who've lost their jobs and are no longer receiving paychecks. For Americans who rely on tips, or who've seen their hours cut, this policy also would offer very little.
What's more, as the Obama administration discovered nearly a decade ago, many Americans don't necessarily notice the small increases in their paychecks, so they don't feel like they have a little extra money in their pockets to spend, which diminishes the larger impact.
So why is Trump so adamant about this? Maybe he's confused; maybe he's getting some bad advice; or maybe he remains preoccupied with his political standing and sees this as a possible device for his re-election campaign.
Remember, Bloomberg News reported this week that the president traveled to Capitol Hill and specifically told Republican senators that "he wants a payroll tax holiday through the November election so that taxes don't go back up before voters decide whether to return him to office."
I believe that's part of a phenomenon known as saying the quiet part loud.