WASHINGTON (Reuters) - U.S. Senate Finance Committee Chairman Chuck Grassley said on Wednesday that a payroll tax cut was just one of the options under consideration to offset the economic impact of the coronavirus pandemic.
“If you’re going to negotiate in good faith, you’re going to listen to everybody and pick out what you think can do the most good to help the economy over a hump,” Grassley, a Republican, told reporters as Democrats in the U.S. House of Representatives rushed to advance a broad package of proposals to help Americans affected by the outbreak.
“It’s on the table,” Grassley said, when asked about his views on a payroll tax cut. “It’s something that at least has bipartisan support because it was used during the Obama administration.”
Payroll taxes are used to fund Social Security for retirees and Medicare, the government healthcare plan for the elderly, which provides 18% of the U.S. population with health insurance.
Nearly 90% of Social Security’s budget came from payroll taxes in 2018, according to U.S. government figures. Medicare was 36% funded from payroll taxes in 2018, reported the Peter G. Peterson Foundation, a Washington think tank.
An aide to Grassley said a Bloomberg News story reporting that Grassley had said there was not enough support for President Donald Trump’s idea of easing payroll taxes was not correct.
Asked if he thought a payroll tax cut would be an effective way to stimulate the economy, Grassley said he had not read any deep analysis on that issue since 2009 and was not sure if it would help the economy.
He said he did not see any pitfalls with the Trump administration’s proposal to extend the April 15 tax deadline, and that it had been done before. Such a move would keep money circulating through the economy longer.
Grassley said he had not seen the full package of proposals being advanced by House Democrats, but he did not expect the Republican-controlled Senate to back it unless it won support from the White House.
Reporting by Andrea Shalal and Susan Heavey; Editing by Chizu Nomiyama and Peter Cooney