Aug. 20 (UPI) — President Donald Trump said Tuesday afternoon he would consider a temporary payroll tax cut even though he believes the economy is strong and there’s no recession on the horizon.
This comes after several denials from the White House on Monday and Tuesday morning that no such idea was being considered. The tax cut would give Americans more take-home pay. But payroll taxes fund Social Security and Medicare. The tax cut could be a hard sell for the Democratic-controlled House.
“I’ve been thinking about payroll taxes for a long time,” Trump said. “Many people would like to see that. We’re looking at various tax reductions. But I’m looking at that all the time anyway.”
The Dow Jones Industrial Average fell significantly last week, raising concerns of a possible recession. But on Friday, the Dow Jones and other economic indicators rebounded, creating more optimism.
The mixed signals within the Trump administration could mean they are taking a measured approach to economic stimulus because the strength of the economy remains one of the main pillars of his 2020 reelection campaign. Reacting to bad economic news is also an acknowledgement that there are problems with the economy.
Trump has maintained confidence in the economy, blaming the mainstream media for causing panic of a recession. He also blamed the Federal Reserve for holding the economy back, urging the Fed to cut interest rates by 1 percent over time.
Some economists have blamed the potential recession on the trade war with China.
But Trump remains undeterred, saying the tariffs with China are more crucial than the short-term drawbacks.
“I am doing this whether it’s good or bad for your statement about ‘will we fall into a recession for two months,'” Trump said. “The fact is somebody had to take China on.”