DARLING: President Trump’s Payroll Tax Cut Is The Best Stimulus In This Time Of Crisis

Brian Darling Liberty Government Affairs
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President Donald J. Trump’s push for a suspension of the payroll tax is timely and needed in this time of crisis. Right-leaning economists agree that tax cuts are the best way to stimulate the economy, because it keeps more money in the hands of the citizenry and keeps government out of the business of picking winners and losers with bailouts and subsidies. Congress would be smart to get a clean payroll tax cut bill to the president’s desk by the end of next week.

Tax cuts are on the table, yet Do Nothing Democrats are already resisting this relief. This week, Trump proposed, according to Fox News, “the idea of temporarily doing away with the payroll tax in order to give the U.S. economy a boost as it struggles amid fears over the coronavirus outbreak.” It did not take long for partisan Democrats to condemn the Trump proposal. The irony is not lost on the fact that Speaker of the House Nancy Pelosi) fell all over herself to praise a two-month extension of the payroll tax cut back in 2011 when she said, “The American people spoke out clearly and, thanks to President Obama’s leadership, 160 million Americans will continue to receive their payroll tax cut – nearly $40 per paycheck in the pockets of the average family.” The opposition is clearly partisan, yet there is a way for the Senate to put some pressure on the House to pass a bill.

One way is a parliamentary maneuver.

Under the Constitution, the House has the authority to originate tax bills. Any tax cut bill that originates in the Senate would be “Blue Slipped” by the House – a technical way of the House using the Constitution as authority to reject a Senate originated tax bill. Yet if the Senate uses a House-passed tax bill, they could use that as a legislative vehicle to bounce back a tax cut bill to the House. Right now on the Senate Calendar is a bill, H.R. 1957, an act to amend the Internal Revenue Code of 1986 to modernize and improve the Internal Revenue Service, and for other purposes. The bill amends the tax code and should qualify as a tax bill to come back to the House and not get rejected as a Blue Slip. Likely, there are other bills on the Senate Calendar that have passed the House and contain tax provisions for the Senate to use to send back the Trump payroll tax cut bill.

Another way is to just pass a tax bill and send it over to the House and let them Blue Slip the bill showing they are scared of the debate. An added benefit is to force Senate Democrats to filibuster the bill that will show the voters of America that Senate Democrats are resisting tax relief for workers.

All of the above referenced tactics would put pressure on House Democrats to move a bill. They likely will not, yet it is a great way to show the fundamental difference between one party that wants to help people with economic problems as a result of the coronavirus and those who don’t – the Democrats.

Peter J. Ferrara, former White House Office of Policy Development under President Ronald Reagan and an associate deputy U.S. attorney general under President George H.W. Bush, pointed out to me that cutting the payroll tax will incentivize people working more. That is an added benefit to a payroll tax suspension in the short term. Other benefits are to target the benefits towards workers, rather than to use a stimulus as a means to transfer wealth to companies that are struggling.  The United States, and citizens of other nations, have a demand problem, because consumers are not spending money on travel, certain consumer goods and will possibly need more for health care.

Targeted tax relief is the best way to deal with the economic harm caused by the coronavirus. It is time for Republicans to step up their political game and force some votes on the president’s brilliant idea in the next two weeks when it will have maximum economic impact, and extreme political impact if the Democrats block tax relief.

Brian Darling is former Counsel and Sr. Communications Director for Sen. Rand Paul (R-KY).