US Secretary Treasury says no payroll tax break in next US coronavirus bill

US Secretary Treasury says no payroll tax break in next US coronavirus bill

US Democrats and Republicans trying to reach an agreement on a coronavirus rescue measure before Congress recesses in August.

United States Treasury Secretary Steve Mnuchin said on Thursday the White House is interested in getting a trillion-dollar coronavirus relief bill out quickly and will not include the payroll tax cut sought by President Donald Trump.

Mnuchin, speaking to reporters at the White House and appearing on a US television show, gave a preview of what Republicans are thinking about as they begin negotiations with congressional Democrats on a next round of rescue funding for the US.

Mnuchin said the White House was working with Senate Republicans to hammer out language on extending enhanced unemployment benefits that expire on July 31.

Asked whether a payroll tax cut would be included in the proposal being put forth by Senate Republicans, Mnuchin said: “Not in this, but we’re going to come back. You know there might be” another spending bill later this year.

President Donald Trump had been pushing to make the payroll tax cut a core feature of virus relief, it would have meant more money in paycheques of those who are working.

Mnuchin said he and White House Chief of Staff Mark Meadows would be going to Capitol Hill on Thursday morning to meet with Republican Senate Majority Leader Mitch McConnell to iron out terms.

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“One of the problems with the payroll tax cut is it takes time, so we are much more focused right now on the direct payments,” Mnuchin told reporters outside the White House.

“The unemployment insurance – we’re going back up to see the new language and work through that,” he said.

“We’re not going to pay people more to stay home than to work. So we’re looking at something that looks like a 70 percent wage replacement and working on the mechanics,” he said.

Among the sticking points between Republicans and Democrats is whether to extend a $600 a week emergency unemployment benefit provided by Congress in a previous rescue bill. Those benefits expire at the end of July, and have been criticised as an incentive to keep people from going back to work, as they sometimes are higher than a recipient’s salary.

Senate Democratic leader Chuck Schumer responded that the coronavirus bill being offered by Republicans is “unserious” and “unsatisfactory”.

Democrats are backing a $3 trillion spending package called the “HEROES Act” which was passed by the House of Representatives on May 15.

The Treasury secretary told reporters the proposal being worked out by Senate Republicans will include $16bn in new funding for coronavirus testing, for a total of $25bn.

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“We’re focused on putting another trillion in quickly, that’ll be CARES 4.0. If we’ve got to come back for CARES 5.0, for more money, the president will consider that at the time,” Mnuchin said in the interview.

“We should not be quibbling on $200, $400 or $600 when people are in desperate need and have great uncertainty,” House Speaker Nancy Pelosi said.

“You know how the markets and the business community doesn’t like uncertainty? We shouldn’t inject uncertainty further into the lives of America’s working families,” Pelosi said.

The two sides are trying to reach an agreement on the coronavirus spending measure before taking a scheduled month-long recess in August.

Congress previously passed four emergency measures responding to the coronavirus pandemic in March and April totalling more than $3 trillion in spending.

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