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Trump Administration Considering Payroll Tax Cut As More Economists Express Recession Concern

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News Donald Trump American politics Recession

Despite assurances from President Donald Trump that the economy is better than ever, some White House aides have reportedly begun to consider a payroll tax cut in the hope of postponing a weakening economy.

Several aides spoke to The Washington Post Monday under the condition of anonymity, saying that the talks about a potential tax cut are in the early stages and just one possible plan regarding the economy.

The rate for payroll tax, which goes towards Medicare and Social Security, is currently at 6.2 percent. That rate has been in effect since 2013, when it reverted to 6.2 percent from a cut imposed by former President Barack Obama in 2012. The Obama administration requested Congress cut the rate to 4.2 percent to motivate consumer spending during the 2012 recession.
On Monday morning, Trump disputed reports that the economy is slowing and railed against Federal Reserve chair Jay Powell for his "horrendous lack of vision." The president previously lobbied for the Fed not to cut interest rates, though the central bank did so in late July from 2 percent to 2.25 percent.
"Our Economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed, but the Democrats are trying to 'will' the Economy to be bad for purposes of the 2020 Election. Very Selfish! Our dollar is so strong that it is sadly hurting other parts of the world...The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone," Trump wrote.

According to NPR, Vice President Mike Pence echoed Trump's sentiments regarding the economy during a speech on Monday, telling the Detriot Economic Club, "Despite the irresponsible rhetoric of many in the mainstream media, the American economy is strong. And the U.S. economic outlook remains strong as well."

However, an Associated Press report released Monday indicates that 74 percent of economists surveyed by the National Association for Business Economics expect the U.S. to enter into a recession no later than 2021.

The survey was conducted between July 14 and August 1 where 34 percent said they think the economy will head into recession by 2021. Thirty-eight percent stated that the recession would occur sometime in 2020 while 2 percent said the recession would happen this year.

Donald Trump
President Donald Trump speaks to members of the press before departing from the White House en route to Dayton, Ohio and El Paso, Texas on August 7, 2019 in Washington, DC. Trump is will visit the two cities to meet with victims and law enforcement following a pair of deadly shooting attacks last weekend. Zach Gibson/Getty

Some have been concerned that a recession could cost Trump reelection in 2020 as the president has made the economy a central point of his campaign. The president has frequently used unemployment rates and consumer spending as talking points when speaking at rallies and to the media, as well as through Twitter.

In addition to directing his ire at Powell, the president has accused other countries, including China, of working against America and its economic interests and stated that the media is rooting for a recession.

"The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election. The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!," Trump wrote on Twitter on Aug. 15.

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Trump Administration Considering Payroll Tax Cut As More Economists Express Recession Concern | News