Way late, President Trump is waking to the seriousness of the coronavirus. He’s taking aim at its devastating impact on a once-thriving economy. But his brewing plan for a cut in the payroll tax is a knee-jerk reaction that won’t help laid-off workers and ailing industries.
The White House response remains vague for now though it looks like Trump is pleading with Congress to shave down the federal levy as a way to put more spending money to work. He had success pressuring the Federal Reserve to lower interest rates, but that spur hasn’t done enough. Cutting taxes sounds appealing but makes little sense when layoffs, closures and quarantines are the looming issue.
Better yet would be easing the hit on millions of workers who aren’t covered by paid sick leave. Democrats are pushing the idea, which was left out of an earlier $8.2 billion virus relief measure that dealt with medical care.
With the epidemic deepening, the economy is taking a hit as the feverish stock market shows. What’s needed is steadying leadership and a convincing response. Cutting one tax isn’t enough when a broad package that touches people directly is needed. If employees are worried about losing paychecks, they may run health risks reporting for work.
Even Republicans are said to be nervous. Cutting the payroll tax would undermine Social Security and deepen the deficit without a direct payoff to the economy, they fear. Democrats are already mulling their own stimulus plan designed to aid workers and businesses more directly. That might include more food stamps, jobless benefits and sick leave. Get ready for angry tweets and ripostes before a useful answer comes about.
Ignoring the economic picture comes with risks. If employees are worried about losing paychecks, they may run health risks reporting for work. That’s the opposite of health warnings to minimize contact with the fast-spreading bug. Containment will get harder, not easier, without the help of sick leave.
After downplaying the virus for too long, Trump is finally acknowledging the danger. He’ll need more than a tax cut to show results and convince a nervous nation that he’s serious at last.
