Senate Democrats pan Trump’s payroll tax proposal as ‘huge mistake’

Senate Democrats say President Trump’s plan to dramatically cut payroll taxes as a response to the coronavirus outbreak’s hit to the economy is a “huge mistake” that will take a “wrecking ball” to Social Security.

They are vowing to oppose it even though many of them supported President Obama’s decision to cut payroll taxes in 2011 ahead of his 2012 reelection.

Democrats argue that tax cuts won’t help people who miss work because of the coronavirus.

Sen. Ron Wyden (Ore.), the senior Democrat on the Finance Committee, called Trump’s payroll tax proposal a “huge mistake” that would “amount to hundreds of billions of dollars in tax cuts for big corporations.”

“What they want to do is hit Social Security like a wrecking ball with a massive tax cut for the country’s biggest corporations,” Wyden added. “We are going to oppose this with everything we have.”

“With respect to the Senate Finance Committee and our Democrats this will not happen. Period. Full Stop,” he said, banging the podium at a Tuesday press conference.

Wyden said the situation is different than 2009 when Democrats supported a payroll tax cut to stimulate the economy.

“If you have lost shifts, for example, if you get tips, you don’t benefit. If you don’t have much in terms of sick leave … and you’re out of work,” he said, checking off a list of people who he said would be hurt by coronavirus but not helped directly by a payroll tax cut.

Senate Democratic Leader Charles Schumer (N.Y.) said Trump’s plan to cut taxes was too unfocused to help people hurt by the spread of coronavirus.

“We believe the help should be aimed at people not at corporations. We believe the help should be targeted at the people who have suffered from this coronavirus problem,” he said. “We don’t think they should just throw money out of an airplane and hope some of it lands on the people who are affected.”

Asked Tuesday if Democrats would oppose any stimulus package that contained a payroll tax reduction, Schumer said, “you heard our comments on that.”

Sen. Sherrod Brown (Ohio), the senior Democrat on the Banking Committee, also panned Trump’s payroll tax plan.

“I support helping those people that are getting hurt. It doesn’t mean more interest rate cuts, it doesn’t mean more tax cuts that favor the wealthy, which Trump always does,” he said.

Democrats instead are rallying round a broad, three-pronged plan that would provide emergency unemployment insurance and paid sick days for people who have to stay home from work because of the virus; grants to small businesses who lose profits and workers because of the pandemic; and housing, food and education assistance.

Democrats are proposing legislation that would allow employees to earn up to seven days of sick leave that would be available at the beginning of any public health emergency.

They are also calling for payment forbearance for a period of up to six months for federally insured or guaranteed mortgages and federal student loans.

Another idea is a disaster relief program whereby funding would be distributed through governors, mayors and county officials to deal with local economic crises.

“[For] many of these ideas, we consulted the state and local officials who are going through this problem,” Schumer said. “And lots of what we proposed comes exactly from them. So this is not just something we’ve thought up on our own. We’ve talked to them.”

He and other Democrats have proposed for direct grants for eligible small businesses and supplemental funding to public transportation agencies and Amtrak to help efforts to limit virus transmission on public transportation and prevent reductions in services.

Democrats have drafted a variety of housing, food security and education proposals to further target emergency assistance.

They want emergency rental assistance and emergency mortgage assistance to help people struggling to make rent and mortgage payments.

Their food security proposals include waiving restrictions on the Supplemental Nutrition Assistance Program and on free school lunches.

They also want to provide additional funding to support food banks and schools that provide free and reduced-cost meals.