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| Trump’s Payroll Tax Cut Would Dwarf the 2008 Bank Bailout | Trump’s Payroll Tax Cut Would Dwarf the 2008 Bank Bailout |
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| WASHINGTON — Almost overnight, President Trump has gone from insisting the economy would not need fiscal help to weather the coronavirus to proposing a stimulus plan that would cost more than the 2008 Wall Street bank bailout or the 2009 stimulus bill aimed at digging the United States out of a deep recession. | WASHINGTON — Almost overnight, President Trump has gone from insisting the economy would not need fiscal help to weather the coronavirus to proposing a stimulus plan that would cost more than the 2008 Wall Street bank bailout or the 2009 stimulus bill aimed at digging the United States out of a deep recession. |
| The centerpiece of Mr. Trump’s stimulus proposal, which remains a work in progress, is a temporary tax cut that by itself would add nearly $1 trillion to the national debt: a suspension of all Social Security payroll taxes through the end of the year. Some economists have cheered the idea as the right move at a fraught moment when workers are quarantined, schools are closing and large gatherings are being canceled. | The centerpiece of Mr. Trump’s stimulus proposal, which remains a work in progress, is a temporary tax cut that by itself would add nearly $1 trillion to the national debt: a suspension of all Social Security payroll taxes through the end of the year. Some economists have cheered the idea as the right move at a fraught moment when workers are quarantined, schools are closing and large gatherings are being canceled. |
| But others — including those who have called for aggressive congressional action — say the plan would be an inefficient way of stoking consumer demand at a time of supply shortages and a growing number of quarantines. | But others — including those who have called for aggressive congressional action — say the plan would be an inefficient way of stoking consumer demand at a time of supply shortages and a growing number of quarantines. |
| Lawmakers on both sides of the aisle have given the proposal a cool reception. Senator Charles E. Grassley of Iowa, the Republican chairman of the Senate Finance Committee, told reporters on Wednesday that he did not see a need for immediate action on a payroll tax cut. Representative Steny H. Hoyer of Maryland, the second-ranking Democrat in the House, said Wednesday that the proposal was a “nonstarter.” | Lawmakers on both sides of the aisle have given the proposal a cool reception. Senator Charles E. Grassley of Iowa, the Republican chairman of the Senate Finance Committee, told reporters on Wednesday that he did not see a need for immediate action on a payroll tax cut. Representative Steny H. Hoyer of Maryland, the second-ranking Democrat in the House, said Wednesday that the proposal was a “nonstarter.” |
| Mr. Trump and his top advisers have pitched the cut as a much-needed lift for consumers and businesses at a time when the spreading virus is beginning to chill economic activity. “The payroll tax holiday is probably the most important, powerful piece of this,” Larry Kudlow, the director of the National Economic Council, told reporters on Tuesday. | Mr. Trump and his top advisers have pitched the cut as a much-needed lift for consumers and businesses at a time when the spreading virus is beginning to chill economic activity. “The payroll tax holiday is probably the most important, powerful piece of this,” Larry Kudlow, the director of the National Economic Council, told reporters on Tuesday. |
| Under Mr. Trump’s plan — as described by Peter Navarro, one of his economic advisers — the government would, through the end of the year, stop collecting the 6.2 percent Social Security tax currently taken out of workers’ paychecks and the 1.45 percent tax taken for Medicare. It would also suspend equally large taxes paid on behalf of workers by their employers. Self-employed workers would be relieved of the entire 15.3 percent tax they currently pay. | Under Mr. Trump’s plan — as described by Peter Navarro, one of his economic advisers — the government would, through the end of the year, stop collecting the 6.2 percent Social Security tax currently taken out of workers’ paychecks and the 1.45 percent tax taken for Medicare. It would also suspend equally large taxes paid on behalf of workers by their employers. Self-employed workers would be relieved of the entire 15.3 percent tax they currently pay. |
| For workers, earnings that are no longer subject to the payroll tax would now be subject to federal income taxes. Because lower-paid workers have lower marginal income tax rates, they would see a slightly larger percentage increase in their pay than workers with higher salaries. Some extremely high-paid workers would not see an increase at all because payroll taxes are capped by income, and some workers are close to — or have already reached — that limit. This means they are not set to have any Social Security taxes taken out for the rest of the year. | For workers, earnings that are no longer subject to the payroll tax would now be subject to federal income taxes. Because lower-paid workers have lower marginal income tax rates, they would see a slightly larger percentage increase in their pay than workers with higher salaries. Some extremely high-paid workers would not see an increase at all because payroll taxes are capped by income, and some workers are close to — or have already reached — that limit. This means they are not set to have any Social Security taxes taken out for the rest of the year. |
| As a general rule, the largest percentage income gains would go to households earning up to $250,000 a year, according to calculations by the Tax Foundation, a nonprofit in Washington. The largest gains in dollar figures would go to households earning more than $123,000 a year, according to an analysis by the Institute on Taxation and Economic Policy in Washington. | As a general rule, the largest percentage income gains would go to households earning up to $250,000 a year, according to calculations by the Tax Foundation, a nonprofit in Washington. The largest gains in dollar figures would go to households earning more than $123,000 a year, according to an analysis by the Institute on Taxation and Economic Policy in Washington. |
| How much individual workers would save depends partly on their employers. If an employer’s half of payroll taxes was lifted, they would need to decide whether to pass those savings directly to workers in the form of higher pay. Some economists see both sides of that equation as beneficial at a time of slowing economic activity. | How much individual workers would save depends partly on their employers. If an employer’s half of payroll taxes was lifted, they would need to decide whether to pass those savings directly to workers in the form of higher pay. Some economists see both sides of that equation as beneficial at a time of slowing economic activity. |
| The full payroll tax suspension “would not only increase workers’ take-home pay but would ease cash flow constraints for employers who are likely to face a rough patch in the incoming months,” said Karl Smith, the vice president of federal tax and economic policy at the Tax Foundation, which traditionally supports cutting taxes to spur economic growth. Mr. Smith said he supported the Trump proposal, though the Tax Foundation had not taken an official position. | The full payroll tax suspension “would not only increase workers’ take-home pay but would ease cash flow constraints for employers who are likely to face a rough patch in the incoming months,” said Karl Smith, the vice president of federal tax and economic policy at the Tax Foundation, which traditionally supports cutting taxes to spur economic growth. Mr. Smith said he supported the Trump proposal, though the Tax Foundation had not taken an official position. |
| “The payroll tax would be great,” Mr. Trump said on Wednesday. “Dems are not in favor of it. I’m trying to figure out why.” | “The payroll tax would be great,” Mr. Trump said on Wednesday. “Dems are not in favor of it. I’m trying to figure out why.” |
| Democrats are opposed for several reasons. Many economists, including liberals and conservatives who have called for stimulus measures, say there are much more effective ways to stoke demand and support growth during a viral outbreak. They note that cutting payroll taxes only helps Americans who are still working — and not those who are furloughed by quarantines or laid off amid floundering sales. The benefits would arrive gradually across paychecks instead of in one stimulative burst. | Democrats are opposed for several reasons. Many economists, including liberals and conservatives who have called for stimulus measures, say there are much more effective ways to stoke demand and support growth during a viral outbreak. They note that cutting payroll taxes only helps Americans who are still working — and not those who are furloughed by quarantines or laid off amid floundering sales. The benefits would arrive gradually across paychecks instead of in one stimulative burst. |
| “A payroll tax cut like the president wants wouldn’t help the elderly, non-employed, who are at the most risk from the virus,” Michael R. Strain, an economist at the conservative American Enterprise Institute, wrote Wednesday on Twitter. “It would provide a larger benefit to the well off. And it isn’t targeted on those who need it.” | “A payroll tax cut like the president wants wouldn’t help the elderly, non-employed, who are at the most risk from the virus,” Michael R. Strain, an economist at the conservative American Enterprise Institute, wrote Wednesday on Twitter. “It would provide a larger benefit to the well off. And it isn’t targeted on those who need it.” |
| Claudia Sahm, an economist at the liberal Washington Center for Equitable Growth, said Thursday that lawmakers could still ward off a recession with stimulus, but “a payroll tax won’t do it.” She and Mr. Strain both favor giving cash assistance to Americans. | Claudia Sahm, an economist at the liberal Washington Center for Equitable Growth, said Thursday that lawmakers could still ward off a recession with stimulus, but “a payroll tax won’t do it.” She and Mr. Strain both favor giving cash assistance to Americans. |
| Updated June 12, 2020 | |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Cutting payroll taxes “will be too slow, and its effects too small,” Ms. Sahm said. “So small most won’t even notice it. Those who don’t have or will lose their jobs won’t get it at all.” | Cutting payroll taxes “will be too slow, and its effects too small,” Ms. Sahm said. “So small most won’t even notice it. Those who don’t have or will lose their jobs won’t get it at all.” |
| The political calculations around payroll tax cuts are fraught. The tax feeds the Social Security Trust Fund; while administration officials said they would most likely divert other money to avoid robbing the fund, cutting payroll taxes would further balloon the rising budget deficit. | The political calculations around payroll tax cuts are fraught. The tax feeds the Social Security Trust Fund; while administration officials said they would most likely divert other money to avoid robbing the fund, cutting payroll taxes would further balloon the rising budget deficit. |
| The Committee for a Responsible Federal Budget estimates that suspending the tax through December would reduce federal revenues by $840 billion; the Tax Foundation said it could top $900 billion. The initial price tag for the 2008 Wall Street bailout was $700 billion, though less than $500 billion was actually spent and taxpayers ultimately recouped most of the funds. President Barack Obama’s 2009 stimulus package cost about $800 billion over the course of several years. | The Committee for a Responsible Federal Budget estimates that suspending the tax through December would reduce federal revenues by $840 billion; the Tax Foundation said it could top $900 billion. The initial price tag for the 2008 Wall Street bailout was $700 billion, though less than $500 billion was actually spent and taxpayers ultimately recouped most of the funds. President Barack Obama’s 2009 stimulus package cost about $800 billion over the course of several years. |
| The full cost of Mr. Trump’s proposals, including assistance to affected industries like tourism and sick pay for quarantined workers, is likely to be tens — if not hundreds — of billions of dollars larger than the payroll tax cut alone. | The full cost of Mr. Trump’s proposals, including assistance to affected industries like tourism and sick pay for quarantined workers, is likely to be tens — if not hundreds — of billions of dollars larger than the payroll tax cut alone. |
| If enacted, such a package would most likely push the federal budget deficit to over $2 trillion for the year. Data released Thursday by the Treasury Department show the deficit — which has grown significantly in recent years in part because of Mr. Trump’s 2017 tax cuts — is on pace to reach nearly $1.1 trillion for the 2020 fiscal year. | If enacted, such a package would most likely push the federal budget deficit to over $2 trillion for the year. Data released Thursday by the Treasury Department show the deficit — which has grown significantly in recent years in part because of Mr. Trump’s 2017 tax cuts — is on pace to reach nearly $1.1 trillion for the 2020 fiscal year. |
| The record in nominal dollars for an annual deficit in the United States is $1.4 trillion, during the depths of the financial crisis. | The record in nominal dollars for an annual deficit in the United States is $1.4 trillion, during the depths of the financial crisis. |