President Trump on Tuesday confirmed that he is considering whether to push for a temporary payroll tax cut amid mounting concerns about an economic slowdown, rebutting numerous White House officials who had insisted that such an idea was not under review.

Trump’s remarks came one day after The Washington Post reported that several senior White House officials had begun discussing such a move.

“Payroll tax is something that we think about, and a lot of people would like to see that, and that very much affects the workers of our country,” Trump said Tuesday during an exchange with reporters at the White House.

The White House had previously disputed that a payroll tax was under consideration. But Trump said it is something he has considered, as well as other ideas, such as broadening capital gains tax benefits for many investors.

Trump’s comments pulled back the curtain on a freewheeling policy process within the White House. Senior administration officials are trying both to assess the real weaknesses in the economy while also determining whether they should take any steps to intervene before the 2020 elections. Trump and many of his advisers believe the economy’s strength could be key to his political success.

One of his top Democratic rivals, Sen. Elizabeth Warren of Massachusetts, has argued that Trump’s handling of the economy has been irresponsible and will push the U.S. into a recession. And former vice president Joe Biden has said Trump has botched a trade war with China in a way that has hurt many U.S. companies.


Last week, White House officials fervently rejected any sense that the economy was weakening, even in the face of numerous signals that the U.S. and global economy had begun to slow. Instead, they blasted the Federal Reserve, alleging that any weakness in the economy was the fault of central bankers who had raised interest rates last year.

In the past few days, however, a new process has kicked off within the West Wing. Numerous top officials have met with Trump and each other to try and determine what precisely is happening with the economy and what – if anything- they should do about it. Trump has also discussed the economy with a range of confidants and business leaders, and the content of those conversations hasn’t always been shared with senior White House officials.

The analysis of a payroll tax cut centers on a firm belief among White House officials that they need to do whatever they can to ensure that consumers continue spending money. Consumer spending has been a bright spot of the economy this year, and consumer spending and retail sales have helped pull the economy through weaker business investment numbers.

But passing a payroll tax cut could be unpopular with lawmakers from both parties. Many Democrats traditionally support payroll tax cuts, because they tend to disproportionately benefit middle-class Americans. But Democrats could be reticent to back another tax cut less than two years after Republicans pushed through a controversial $1.5 trillion tax cut package that has had mixed effects on the economy.

And Republicans have long resisted payroll tax cuts, believing the impact of such changes to be inefficient and temporary. Also, the last payroll tax cut that was put in place in 2011 and 2012 was very costly, pulling away more than $100 billion in federal revenue each year. The deficit is already projected to hit $1 trillion this year and worsen next year.

The White House scramble comes as senior administration officials grapple with dimming economic projections ahead of the 2020 elections. White House officials had insisted that the economy would grow at a roughly 3 percent pace this year, a clip that many economists believe is too rosy.


One of Trump’s top trade advisers, Peter Navarro, has estimated that the Dow Jones Industrial Average will hit 30,000 by Christmas. It is hovering at around 26,000 now and could slip.

White House officials have not presented a coordinated plan for how to deal with the changing economy. Just a few hours before Trump considered that he has thought about a payroll tax cut, spokesman Hogan Gidley flatly denied it.

“It’s not being considered at this time, but he’s looking at all options out there to try and give people back so much of the hard-earned money they’ve made,” Gidley said.

The White House is trying to juggle an effort to calm the public about the state of the economy while simultaneously search for ways to prop the economy up. They are specifically focused on buttressing consumer and business confidence, two fluid measurements that can determine how much spending occurs.

One reason for the weakening economy, many business leaders and economists believe, is the prolonged trade war Trump has launched against China. Trump has imposed tariffs against $250 billion in Chinese imports and he plans to impose tariffs on another $100 billion in goods at the beginning of next month. And he has announced that he will impose tariffs on another large batch of Chinese imports – many of which are popular consumer goods like laptops and phones – on December 15.

J.P. Morgan Chase issued a report on Tuesday that said these tariffs could cost the average American family roughly $1,000 each year.


Trump has given very conflicting signals about the prospect for cutting a trade deal with China. He has said he will impose stiff tariffs on China indefinitely and suggested that leaders in Beijing are going to wait until after the 2020 elections to decide whether to negotiate. But on Sunday, seemingly out of the blue, he wrote in a Twitter post that discussions with China had restarted. On Tuesday, he appeared less optimistic, saying the fight he had launched against the Chinese was necessary, but that his life would be easier if he hadn’t done it in the first place.

“The fact is, somebody had to take China on,” Trump told reporters. “My life would be a lot easier if I didn’t take China on. But I like doing it, because I have to do it, and we’re getting great results.”

He also acknowledged that the China fight could appear to hurt the U.S. economy in the short term, something that he had denied for months before recently saying that there is a cost to U.S. consumers. For example, he has recently delayed tariffs against many consumer imports from China because he thought it would drive up costs ahead of the Christmas shopping season for U.S. companies.

Still, Trump has insisted that China rips off U.S. consumers and businesses by manipulating their currency, unfairly subsidizing their domestic companies, and stealing intellectual property from U.S. firms. He has also demanded that China purchase billions of dollars in U.S. agriculture products, something that hasn’t yet happened. As the trade war has worsened, China has cut back on agricultural purchases from the U.S., and Trump has authorized more than $20 billion in payments to U.S. farmers in order to quell outrage in key states.

In the meantime, business spending has pulled back, in part because of fears about the trade war, but consumer spending has remained robust. If Americans begin to tighten their belts later this year, the economy could suffer new strain.

Millions of Americans pay a payroll tax on their earnings, a 6.2 percent levy that is used to finance Social Security programs. The payroll tax was last cut in 2011 and 2012, to 4.2 percent, during the Obama administration as a way to encourage more consumer spending during the most recent economic downturn. But the tax was allowed to reset back up to 6.2 percent in 2013.


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