The talks on payroll taxes were reported to be in their early stages and officials have not decided whether to push Congress to formally approve a reduction, sources familiar with the matter told the Washington Post.
The Post did not say how large a tax cut officials were discussing. Payroll taxes were temporarily cut during President Barack Obama’s administration to boost consumer spending after the last recession, but they expired in 2013.
However, a White House official, speaking on condition of anonymity, pushed back against the report in comments to Reuters, saying: “As (White House economic adviser) Larry Kudlow said yesterday, more tax cuts for the American people are certainly on the table, but cutting payroll taxes is not something under consideration at this time.”
The report comes as President Donald Trump in recent days has lashed out over media reports about growing recession fears. He has hammered into the Federal Reserve and claimed concerns about a slowdown are fueled by Democrats and a sympathetic media ahead of his 2020 reelection bid.
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. Very Selfish! Our dollar is so strong that it is sadly hurting other parts of the world...— Donald J. Trump (@realDonaldTrump) August 19, 2019
The US Treasury bond yield curve also inverted last week for the first time since 2007 in a sign the economy could be headed toward a recession. Goldman Sachs lowered its fourth-quarter growth forecast by 20 basis points to 1.8%, citing a larger-than-expected impact of recent events related to the trade war between the US and China.