President Trump said Wednesday he is no longer looking to cut payroll taxes, pivoting away from an option he’d confirmed was under consideration a day earlier.
Hours after taking to Twitter to needle the Federal Reserve and its chairman, Jerome H. Powell, to cut interest rates — a common refrain — Trump told reporters at a White House briefing there was no need to cut payroll taxes.
“I’m not looking at a tax cut now,” he said. “We don’t need it. We have a strong economy.”
The flip-flop comes amid a larger debate on whether the country is headed toward a recession and, if so, when. Trump has habitually described the economy as “strong,” “terrific” and the “greatest in the history of our country.” But a recent poll found that nearly 3 out of 4 economists believe the United States will tip into recession by 2021, pointing to the U.S.-China trade war and stock market tumult as indicators the economy is shakier than Trump projects.
On Tuesday, Trump confirmed he was weighing a temporary payroll tax cut and other measures, seemingly acknowledging that rising fears of a slowdown extended to the Oval Office. In the past, he has praised the strength of the economy while also floating steps that are usually reserved for periods of economic struggle, such as doubling down on the Fed to cut interest rates.
Trump’s acknowledgment of the payroll tax plan came one day after The Washington Post reported that several senior White House officials had begun discussing the option. At the time, the White House publicly denied those discussions.
In a string of tweets on Wednesday, Trump lashed out at the media for “doing everything possible [to] ‘create’ a U.S. recession, even though the numbers & facts are working totally in the opposite direction.” And while repeating his rallying cry that the economy is strong, Trump again poked fingers at Powell and the Fed, accusing the chairman, a former investment banker, of performing like “a golfer who can’t putt.”
“Wake up Federal Reserve,” Trump wrote. “Such growth potential, almost like never before!”
Trump followed up shortly after with another tweet asking “WHERE IS THE FEDERAL RESERVE?”
Some within the administration have said that if the public were aware of the internal discussions about how to stimulate the economy, it could be a cause for further concern. Still on Tuesday, Trump said he was open to new options, including a potential change to capital gains taxes that would give many investors an additional break.
“Payroll tax is something that we think about, and a lot of people would like to see that, and that very much affects the workers of our country,” Trump said Tuesday during an exchange with reporters at the White House.
Millions of Americans pay a payroll tax on their earnings, a 6.2 percent levy that is used to finance Social Security programs. The payroll tax was last cut in 2011 and 2012, to 4.2 percent, during the Obama administration as a way to encourage more consumer spending during the most recent economic downturn. But the cut was allowed to reset back up to 6.2 percent in 2013.
Damian Paletta and Taylor Telford contributed to this report.