NATIONAL NEWS

White House Drops Payroll Tax Cut As GOP Unveils Virus Aid

Jul 23, 2020, 7:23 AM | Updated: 7:25 am
Senate Majority Leader Mitch McConnell (R-KY) (Photo by Tasos Katopodis/Getty Images)...
Senate Majority Leader Mitch McConnell (R-KY) (Photo by Tasos Katopodis/Getty Images)
(Photo by Tasos Katopodis/Getty Images)

WASHINGTON (AP) — The White House has dropped a bid to cut Social Security payroll taxes as Republicans unveil a $1 trillion COVID-19 rescue package on Thursday, ceding to opposition to the idea among top Senate allies.

“It won’t be in the base bill,” said Treasury Secretary Steven Mnuchin, speaking on CNBC about the payroll tax cut, killing the idea for now.

The legislation, set to be released Thursday morning by Senate Majority Leader Mitch McConnell, R-Ky., comes amid alarming developments on the virus crisis.

McConnell’s package is an opening GOP bid in talks with top Capitol Hill Democrats in a negotiation that could be rockier than talks in March that produced a $2 trillion rescue package. GOP senators and President Donald Trump are at odds over priorities, and Democrats say it’s not nearly enough to stem the health crisisreopen schools and extend aid to jobless Americans.

The Republican leader is expected to deliver a speech shortly after the Senate opens, and then senators will begin rolling out their separate parts of the package, according to a Republican granted anonymity to discuss the plans.

The centerpiece of the GOP effort remains McConnell’s liability shield to protect businesses, schools and others from coronavirus-related lawsuits.

The package is not expected to provide any new money for cash-strapped states and cities, which are clamoring for funds, but Republicans propose giving $105 billion to help schools reopen and $15 billion for child care centers to create safe environments for youngsters during the pandemic.

But the GOP measure forges an immediate agreement with Democrats on another round of $1,200 checks to most American adults.

The $600 weekly unemployment benefit boost that is expiring Friday will be reduced, likely to $200, and ultimately adjusted according to state jobless benefits rates. Some Republicans say the boost is a disincentive to work, but others prefer a phased approach. Some Republicans are pressing for a temporary extension of the current benefit if the talks drag.

“We cannot allow there to be a cliff in unemployment insurance given we’re still at about 11% unemployment,” said Sen. Rob Portman, R-Ohio.

The bill is likely to be silent on the potential housing crisis as a federal eviction moratorium on millions of rental units expires in days.

One key holdup in the talks was Trump’s push for a payroll tax cut, according to a Republican granted anonymity to discuss the private talks. Hardly any GOP senators support the idea. Instead, McConnell and some other Republicans prefer the direct $1,200 cash payments to Americans.

Sen. Marco Rubio, R-Fla., said there will be another boost for small business lending in the Paycheck Protection Program. “It’s going to be big,” he said.

The bills will also include tax breaks for businesses to hire and retain workers and to help shops and workplaces retool with new safety protocols.

The breakthrough on testing money was key after days of debate between Republicans and the White House. Republicans wanted $25 billion, but the Trump administration said the $9 billion in unspent funds from a previous aid deal was sufficient. The two sides settled on adding $16 billion to the unspent funds to reach $25 billion, senators said. There will also be fresh funds for vaccines.

Of the $105 billion for education, Republicans want $70 billion to help K-12 schools reopen, $30 billion for colleges and $5 billion for governors to allocate. The Trump administration wanted school money linked to reopenings, but in McConnell’s package the money for K-12 would likely be split between those that have in-person learning and those that don’t.

Democrats, who already approved House Speaker Nancy Pelosi’s more sweeping $3 trillion package two months ago, said the GOP infighting with Trump was delaying needed relief to Americans during the crisis.

“We are just days away from a housing crisis that could be prevented,” said Sen. Elizabeth Warren, D-Mass.

In their package, Democrats are calling for $430 billion to reopen schools, bigger unemployment benefits and direct aid checks and a sweeping $1 trillion for state and local governments. They also want a fresh round of mortgage and rental assistance and new federal health and safety requirements for workers.

McConnell calls his proposal a “starting point” in negotiations with Democrats. Congress in March approved the massive $2.2 trillion CARES package, the biggest of its kind in U.S. history.

The severity of the prolonged virus outbreak is upending American life. Schools are delaying fall openings, states are clamping down with new stay-home orders and the fallout is rippling through an economy teetering with high unemployment and business uncertainty. A new AP-NORC poll shows very few Americans want full school sessions without restrictions in the fall.

Still, some Republicans said they are unlikely to approve any new aid.

“I just don’t see the need for it,” Sen. Ron Johnson, R-Wis., told reporters on Wednesday.

___

Associated Press writers Andrew Taylor, Mary Clare Jalonick and Padmananda Rama contributed to this report.

KSL 5 TV Live

Top Stories

National News

Christine McVie of Fleetwood Mac performs on stage at Madison Square Garden on October 6, 2014 in N...
Associated Press

Christine McVie, Fleetwood Mac singer-songwriter, dies at 79

Christine McVie, the soulful British musician who sang lead on many of Fleetwood Mac’s biggest hits, has died at 79.
13 hours ago
rail union picket...
KEVIN FREKING and JOSH FUNK Associated Press

House votes to avert rail strike, impose deal on unions

The U.S. House moved urgently to head off the looming nationwide rail strike on Wednesday, passing a bill that would bind companies and workers to a proposed settlement that was reached in September but rejected by some of the 12 unions involved.
13 hours ago
Firefighters and Riverside Police gather outside a burned home in Riverside, Calif., on Friday, Nov...
AMY TAXIN and STEFANIE DAZIO, Associated Press

Police: Deputy posed as teen online to lure California girl

Authorities are investigating whether a Virginia sheriff’s deputy posed as a 17-year-old boy online to groom and sexually extort a teenage girl in California before driving across country and killing her mother and grandparents and setting fire to their home.
13 hours ago
amazon logo...
HALELUYA HADERO, AP Business Writer

Amazon says it had its biggest Thanksgiving shopping weekend

Amazon said Wednesday the Thanksgiving holiday shopping weekend was its biggest ever, aided by a record number of shoppers looking for deals amid high inflation.
13 hours ago
Chick-fil-A is selling merchandise for the first-time ever. (CNN)...
Jordan Valinsky, CNN Business

Chick-fil-A is selling merchandise for the first time ever

If your holiday wish list includes a Chick-fil-A sauce-themed blanket or a chicken nugget pillow, look no further.
13 hours ago
Aerial photograph of the dominant fissure 3 erupting on the Northeast Rift Zone of Mauna Loa, taken...
Caleb Jones and Jennifer Sinco Kelleher, Associated Press

Hawaii volcano eruption has some on alert, draws onlookers

The first eruption in 38 years of the world’s largest active volcano is attracting onlookers to a national park for “spectacular” views of the event, and it's also dredging up bad memories among some Hawaii residents.
13 hours ago

Sponsored Articles

house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 reasons you may want to consider apartment life over owning a home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Take this quiz before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t let a ransomware attack get you down | Protect your workplace today with cyber insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Hand turning a thermostat knob to increase savings by decreasing energy consumption. Composite imag...
Lighting Design

5 Lighting Tips to Save Energy and Money in Your Home

Advances in lighting technology make it easier to use smart features to cut costs. Read for tips to save energy by using different lighting strategies in your home.
Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
White House Drops Payroll Tax Cut As GOP Unveils Virus Aid