Economy
GOP Wants Less Spending, More ‘Pro-Growth’ Measures In Stimulus Bills
With three massive stimulus packages already passed, GOP and Democratic lawmakers are starting to discuss what would be included in a potential, pro-growth fourth and even fifth round of stimulus.
There is some hesitancy on behalf of GOP lawmakers to continue spending money on relief measures. It exists with the tab already hitting $3 trillion and the federal deficit ballooning to record levels.
Many hope that as states slowly reopen, the boost in economic activity will reduce the need for additional relief.
“I just don’t think we need to act quite as urgently,” Texas Republican Senator John Cornyn, whose state started reopening this week, said. Meanwhile, other Republican Senators, including Missouri’s Josh Howley believe that we should do whatever is needed to avoid a recession. This would make any debate on spending seem trivial.
“If we enter a long-term recession or depression, the concerns we have about deficit spending now are going to look like a walk in the park,” Howley also said.
One idea that is gaining traction amongst Republicans is changing the focus of the aid packages away from simply spending money and instead look at “pro-growth” policies, although not every growth project will get the green light.
President Trump has mentioned infrastructure projects on numerous occasions. However, even those should get the axe, says Stephen Moore, a member of President Trump’s economic task force. Moore also recently disagreed with the president, saying there should be “no more spending,” even on much-needed infrastructure repairs.
On a Fox Business appearance, Moore said “There is a real movement among Republicans and conservatives around the country, especially taxpayer groups, no more spending. We’ve done almost $3 trillion of spending through the first couple of months of this, that’s enough. We don’t need more spending… government spending does not stimulate growth.”
Here are some other “pro-growth” tax measures that have been suggested to help boost our economic recovery without additional spending:
A Cut to Payroll Taxes
Moore said that Republicans are “rallying around” the idea of suspending payroll taxes as opposed to continued government spending.
“I think that’s going to be the big battle in the weeks ahead,” he also mentioned. “Do we do the payroll tax cut or do we have more government spending?” Moore then asked.
Suspending payroll tax would help incentivize employers to do more hiring by reducing their payroll costs. It will also give their employees a boost in their paychecks.
Full, Immediate Expensing
White House economic adviser Larry Kudlow recently said that one pro-growth policy he would like to see is an expansion of 100 percent immediate expensing.
“One-hundred percent immediate expensing across the board – plant, equipment, intellectual property, structures, renovations – in other words, if we had 100 percent immediate expensing we would literally pay the moving costs of American companies from China back to the U.S.,” Kudlow said.
Kudlow’s proposal would expand the type of deductible items beyond those allowed by the 2017 Tax Cuts and Jobs Act.
Deduction for Corporate Business Meals and Entertainment
President Trump has been in favor of bringing back the deduction for business meals and entertainment. It's a way to help the restaurant industry. The deduction was eliminated as part of the Tax Cuts and Jobs Act.
Under the Tax Cuts and Jobs Act, Congress repealed the entertainment deduction. That caused confusion as to whether business meals were still deductible.
Limit Corporate Liability
Businesses start to reopen and bring back their employees. However, many owners expressed worry about what happens if their employees catch coronavirus while at work.
Providing a “blanket shield” to employers as they start to rehire workers is “essential to the recovery,” Moore told Fox Business. They want to have this in place so that they can avoid being sued every time a worker falls ill.
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