White House officials, despite President Donald Trump saying a recession is unlikely, are considering slashing some federal taxes to avoid an economic slowdown, according to an official with knowledge of planning.
“As Larry Kudlow said yesterday, more tax cuts for the American people are certainly on the table,” a White House official told Roll Call Monday afternoon, referring to the president’s top economic adviser.
But the same official poured cold water on a Washington Post report that the White House is mulling a temporary payroll tax reduction as an attempt to avoid an election-year recession.
“But cutting payroll taxes is not something under consideration at this time,” the White House official said.
Trump at the end of 2017 signed a sweeping package that lowered individual and corporate tax rates, removed some deductions and expanded other breaks, such as the child tax credit.
That package was approved with only Republican votes, however. Since January, the House has been controlled by Democrats, meaning Speaker Nancy Pelosi would have to sign off before any package is sent to Trump.
Still, the internal deliberations about an economy-boosting tax cut amount to yet another public contradiction in the president’s rhetoric and his staff’s actions.
Trump told reporters in New Jersey Sunday as he ended his summer vacation that he does not view warning bells about a possible recession as valid.
“I don’t see a recession,” Trump told reporters Sunday.
But the president appears to have an idea just whom he will tell voters to blame if the economy does sputter before Election Day.
Namely: Federal Reserve and China’s bait-and-switch on a trade pact that Beijing torpedoed earlier this year. The latter set off a tariffs tit-for-tat that Trump himself last week admitted could make the Christmas season painful for American consumers.
“It would be because I have to take on China and some other countries,” Trump said Sunday of a possible recession.
He returned to his lauding the economy under his watch on Monday, firing off several tweets meant to cool fears about a recession.
“Our Economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed, but the Democrats are trying to ‘will’ the Economy to be bad for purposes of the 2020 Election,” he wrote, referring to the central bank chairman. “Very Selfish!”
The White House deployed two of the president’s top economic advisers, Kudlow and Peter Navarro, to the Sunday morning political shows to say a recession is unlikely and describe he American economic engine as purring with Election Day 15 months away.
The president also tweeted his most direct advice for the typically independent Federal Reserve, saying: “The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well.”