White House drops payroll tax cut after GOP allies object

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Treasury Secretary Steven Mnuchin speaks with reporters about the coronavirus relief package negotiations, at the White House, Thursday, July 23, 2020, in Washington. (AP Photo/Evan Vucci)

WASHINGTON – President Donald Trump on Thursday reluctantly dropped his bid to cut Social Security payroll taxes as Republicans stumbled anew in efforts to unite around a $1 trillion COVID-19 rescue package to begin negotiations with Democrats who are seeking far more.

Frustrating new delays came as the administration scrambled to avert the cutoff next week of a $600-per-week bonus unemployment benefit that has helped prop up the economy while staving off financial disaster for millions of people thrown out of work since the coronavirus pandemic began.

Trump yielded to opposition to the payroll tax cut among his top Senate allies, claiming in a Twitter post that Democratic opposition was the reason. In fact, top Senate Republicans disliked the expensive idea in addition to opposition from Democrats for the cut in taxes that finance Social Security and Medicare.

“The Democrats have stated strongly that they won’t approve a Payroll Tax Cut (too bad!). It would be great for workers. The Republicans, therefore, didn’t want to ask for it," Trump contended.

“The president is very focused on getting money quickly to workers right now, and the payroll tax takes time,” Treasury Secretary Steven Mnuchin said at the Capitol. Only Sunday, Trump said in a Fox News interview that “I would consider not signing it if we don’t have a payroll tax cut.”

The long-delayed legislation comes amid alarming new cases in the virus crisis. It was originally to be released Thursday morning by Senate Majority Leader Mitch McConnell. But the Kentucky Republican instead hosted an unscheduled meeting with Mnuchin and White House acting chief of staff Mark Meadows and delayed the planned release of the proposal until next week.

The rocky developments coincide with a higher-profile role by Meadows, a former tea party lawmaker from North Carolina with a thin legislative resume. The delays increase the chances that efforts to pass the COVID rescue, the fifth coronavirus response bill this year, could drag well into August as both parties are formally nominating their presidential candidates.

Mnuchin claimed there was “fundamental agreement” on the GOP side, but irritation was growing among Republicans with the Trump negotiating team, which floated the idea of breaking off a smaller bill that would be limited to maintaining some jobless benefits and speeding aid to schools. Democrats immediately panned that idea, saying it would strand other important elements such as aid to state and local governments.