Kudlow: Payroll tax deferral will give employed Americans ‘a huge wage increase’
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White House economic adviser Larry Kudlow said Sunday that the payroll tax deferment in President Trump’s executive order will give millions of employed Americans “a gigantic wage increase.”
“There are roughly 140 million people who are working. There are roughly 15 million or 16 million unemployed. The unemployed is too high. There’s a lot of heartbreak there. That’s why we want to help them with the unemployment assistance,” Kudlow said. “But, the 140 million some odd, they’re going to get a gigantic wage increase, probably $1,200 between September 1st and December 31st. And, again, we’d like to — we will do everything we can to forgive those loans. So I think that’s an incentive to work for those who are heroes during the pandemic and also for the unemployed it gives them an incentive to come back to work so we can offset some of the excesses of unemployment assistance.”
The payroll tax deferral, one of four executive orders relating to coronavirus relief signed by Trump Saturday night after congressional negotiations fell apart, has been criticized for doing nothing to help the unemployed and harming the Social Security and Medicare funds. Democrats have also said companies would likely continue collecting payroll taxes to avoid a shocking bill for employees when the deferral period ends.
But Kudlow on Sunday pointed out that Trump would like to make the payroll tax deferral permanent.
“I do think the president, and it’s in the executive order, would like very much to make the deferral a permanent deferral. In other words, he will essentially let it go in future months rather than a payback. So it will be, you know, loan forgiveness in effect, that’s what this really is, is loan forgiveness,” he said. “And I think businesses will come on.”