The White House pushes for tax cuts to help the economy hit by the virus

Donald Trump made an opening offer to Congress to cut payroll taxes until the end of the year, despite Democratic objections, as the administration launched talks with the Congress on a stimulus package to protect the economy from the coronavirus epidemic.

Larry Kudlow, director of the White House National Economic Council, said Trump had raised plans to cut payroll taxes beyond the November elections as the centerpiece of his economic response to the spread of the disease during a lunch with Republican senators. Tuesday.

During a briefing at the White House later today, Mr. Kudlow said that administration officials were still working on the details of the package, but the payroll tax relief was " probably the most important and powerful element of this "and would bring" big payroll growth ".

Mr Trump himself did not appear at the press conference, although he said on Monday that he would do so to personally announce a "very dramatic" package of emergency measures "at the event.

The White House proposals met with immediate resistance from Democrats on Capitol Hill, casting doubt on Washington's ability to quickly merge around a big package to protect the U.S. economy from the ;epidemic.

"The best way to prevent economic damage is to stop the spread of the virus. President Trump is not going to scramble to tackle this growing public health crisis with tax cuts, "said Ron Wyden, the largest Democrat in the Senate finance committee, who added that a reduction in payroll taxes would not help workers without paid sick leave or who had lost shifts and tips. Tax is paid by employers and workers on their wages to fund government pensions and health care, and generates $ 1.2 billion in income annually.

This crisis requires a series of much more complicated solutions, it is not just a matter of tax cuts

Payroll tax cuts have already been used for stimulus by the Obama administration after the financial crisis, but many Democrats say there are better ways to target economic relief.

A Republican lawmaker said that a complication surrounding any negotiation was that Democrats were aware that providing too much economic stimulus could help Mr. Trump as he campaigned for re-election in November. He said one of the ideas under discussion was to stagger any stimulus package – adopt a first version soon, then consider other measures if the coronavirus epidemic worsens .

"This crisis requires a series of far more complicated solutions, it is not just a matter of tax cuts," Richard Neal, the Democrat who heads the Ways and Means Committee, told the Financial Times. the Chamber, which drafts tax legislation.

He said the committee "was working on legislation on paid emergency leave and unemployment insurance, and we want to make sure that coronavirus tests can be obtained for free".

The possibility of compromise on certain aspects of the package could not, however, be excluded. Steven Mnuchin, the Secretary of the Treasury, was separately optimistic after a meeting with Nancy Pelosi, the Democratic Speaker of the House. Last year, the pair negotiated a budget deal to finance the government and lift the US debt limit.

"We are discussing different policies," said Mnuchin. "There is a lot of interest on a bipartisan basis to do something."

Trump faced Democrats' skepticism over another idea some officials have put forward, namely targeted tax breaks for certain industries affected by the epidemic, including airlines, hotels, cruises and energy.

A U.S. government official has said that Mr. Trump is also considering federal assistance for the shale oil and gas production industry, but that this would not constitute a rescue.

Shale energy is an important part of the economy in several states, especially Pennsylvania, which will be critical in the November presidential election. But any effort to help shale producers was likely to be faced with a difficult question on the part of Democrats, particularly those without shale production in their districts.

"Instead of filling Big Oil's pockets, Democrats are working on legislation to protect the financial security of working families affected by the spread of the coronavirus," said House Credit Committee spokesman Evan Hollander. .

Although Mr. Trump wants to help shale businesses, it would likely trigger a jockey among other players in the energy sector. John Berger, managing director of Sunnova Energy, a Texas-based solar energy company, said any aid to the oil and gas industry should be matched with aid for renewable energy , including preserving expiring tax credits.

Berger said that Vladimir Putin, President of Russia, and Mohammed bin Salman, the de facto leader of Saudi Arabia, had carried out a "state intervention" in the markets with their war of price that warranted a response from the United States government. "If they do [however], they must treat us the same way because we are just as important in terms of national security," he said.

Although the U.S. economy remained strong in February, the sharp increase in coronavirus cases across the country, to 959 according to Johns Hopkins University, raised fears of a sharp drop in growth, as events and travel being canceled, people work from home and from the consumer, and business confidence declines. Anthony Fauci, an infectious disease specialist at the National Institutes of Health, told reporters that in order for the United States to fight the epidemic, the lifestyle of Americans must change.

"We would like the country to realize that as a nation, we cannot do the kinds of things that we could have done a few months ago," said Mr. Fauci.

Trump is under pressure to contain economic damage after being criticized for downplaying the coronavirus threat.

"[Coronavirus] has hit the world, and we are ready and we are doing a great job with it," Trump said after meeting with lawmakers. "It will go away, stay calm."

Additional reporting by Lauren Fedor in Washington