The unemployment insurance stimulus package of $600 is running out this month. What happens next is up for debate at Congress beginning today. President Donald Trump wants payroll tax relief included or else he might not sign the bill.
Stimulus Package If Payroll Tax Relief Isn’t Included
Determined to include the provision, the President said: “I want to see it. I’ll have to see but, yeah, I would consider not signing it if we don’t have a payroll tax cut, yes.”
Related Article: Trump Wants Payroll Tax Cut, What That Means For You
Payroll Tax Cuts Determine The Next Stimulus Package
Payroll tax cuts first surfaced last March, during the start of the pandemic. The President asked lawmakers March 9 to enact a payroll tax cut and financial aid bill for workers. There were little details shared at the time, as the President said it was for discussion.
Payroll taxes are the main source for programs such as Social Security and Medicare. For workers, the payroll tax consists of both employer and employee shares. They are different from federal and state income tax withholdings.
Trump believes that a payroll tax cut can help stimulate the economy. The President said: “We are going to be asking tomorrow, we’re seeing the Senate. We’re going to be meeting with House Republicans … McConnell, everybody discussing a possible payroll tax cut or relief, substantial relief.”
Support for the measure is lukewarm at most. White House economic adviser Larry Kudlow has been an advocate of payroll tax relief. But, this view is not shared by Treasury Secretary Steve Mnuchin and others. The latter believes that any such measure will encounter opposition from Democrats. While the two have been at odds over this, they both agree for a need for stimulus packages.
5 Cryptos Set To Soar For 2022 Expert reveals the strongest cryptocurrency investments for 2022 (NOT Dogecoin...)
Garret Watson, the senior analyst of the Tax Foundation, says that both parties do not find it helpful. He said: “The benefits primarily would accrue to folks who already are working, and we currently have record unemployment.” June’s unemployment rate is 11.1%, lower than previous months but still high.
With Congress resuming today, the priority item on the agenda is the next stimulus bill. Since the coronavirus pandemic, Americans received benefits from three earlier stimulus packages. The provisions of the last one will run out by month’s end, but the coronavirus crisis is still ongoing. This early, the GOP and the Dems have differing views on the next bill.
$1.3 Trillion Starting Number
Majority Leader Mitch McConnell (R-KY) will start by presenting a draft stimulus bill. The GOP’s beginning proposal is $1.3 trillion, which is lower than previous stimulus funds. Expectations are high that this bill will contain a one-time payment like the CARES Act. How much the check will amount to remains up for debate.
Another item for deliberation is whether the new bill will contain unemployment insurance. With the $600 welfare expiring July 31, Republicans felt that the amount last time was too much. In some cases, the latter said that laid-off workers made more money compared to their jobs. As such, it disincentives workers from finding and getting a new job.
Meanwhile, Democrats have pushed for a continuation. They believe that with unemployment rising, more workers will need help. They said that with little to no jobs available, people can’t go back to work even if they wanted to. The rising number of coronavirus cases are shutting down opportunities at increasing levels.
Instead of $600, Trump and senior Republicans are considering $200-$400 weekly. Or, have a system in place that does means-testing future federal unemployment benefits.
“We Need Protections”
Ina Fox News Sunday interview, host Chris Wallace posed a question to the President. He asked: “The stimulus bill is running out at the end of this month. The Republicans say they want liability limits, which the Democrats don’t like, you say that you want a payroll tax cut, which even some Republicans are cool too. Will you only sign a bill with those two provisions?”
How to Diversify Your Savings in Uncertain Times With GOLD: With interest rate hikes, geopolitical unrest, increasing national debt, and inflation on the rise, there is no time like the present to protect the purchasing power of your savings with precious metals.
If you're looking to live the dream life that you deserve, Click Here Now!
Trump said that businesses need help managing liabilities caused by the outbreak. He said: “We’re going to see, but we do need protections because businesses are going to get sued just because … you don’t know where this virus comes from, they’ll sit down at a restaurant, they’ll sue the restaurant, the guy’s out of business.”
He continued with: “So we do need some kind of immunity. Just like you need immunity for the police whether they like it or not, you need immunity for the police. But they do need a form of immunity.”
While the provisions of the next stimulus are still up in the air, both sides agree on a basic framework. The coronavirus crisis is raging on, and Americans will need all the help they can get. With time running out, Congress needs to get it to act together and enact a new relief package. With Trump already making his stand known, the ball is with the US Congress.
Watch this video of Trump considering not signing the next stimulus package:
Do you support a payroll tax holiday? Why or why not? Share your views in the comment section below.