In order to fight the economic fallout caused by the coronavirus, Donald Trump wants to remove the payroll tax on worker's gross earnings.
Trump's advisers in the White House, as well as the Republican lawmakers, are pushing for a more targeted stimulus, but Trump is firmly sticking to the idea.
He still mentioned it to the Republican senators during their meeting on Tuesday, saying that he would like to completely eliminate the payroll tax by the end of the year or suspend it permanently, even if the Democrats have openly rejected it already.
If approved by the Congress, Trump's proposal would result to a massive injection of about $1 trillion in cash into the pockets of workers and businesses over the rest of the year.
It would also mean that the trust funds that pay social security benefits for retirees, as well as the funds that help the Medicare health care program for Americans over 65, will lose $1 trillion. Senior tax policy researcher, Howard Gleckman, said.
As Trump's tweet shows, changing the payroll tax to stimulate the economy is not a new idea.
During Obama's administration, the 2% reduction in the payroll tax in 2011 was a counter to the great recession, which returned $ 109 billion to households. In this case, the Treasury contributed a similar amount to the social security fund in order to cover the losses.
Nevertheless, Trump's proposal to cancel the payroll tax has a different scale. If it has not changed in some way, it could worsen the funding shortfall that the two popular programs will already face in the coming years. This is because the US population ages, and the demand for healthcare increases.
On a different note, Donald Trump signed a law prohibiting carriers from using US subsidies to buy network equipment from Huawei Technologies and other companies that are considered a threat to national security.
The Federal Communications Commission (FCC) was required to establish a program to help small providers pay for the cost of removing prohibited equipment or services from their networks and replacing them. FCC Chairman Ajit Pai called on the Congress to allocate the necessary funding to reimburse Telecom operators for replacing any network equipment or services deemed a threat to national security.
Huawei opposes the measure and argues that it does not pose threat to national security.
