Pelosi favored payroll tax cut under Obama as a ‘victory for all Americans,’ opposes it under Trump

The payroll tax was cut in 2010, under President Obama's leadership, and extended in 2011 and 2012.

Published: August 10, 2020 12:29pm

Updated: August 11, 2020 11:47am

House Speaker Nancy Pelosi supported the payroll tax cut under former President Barack Obama but opposes it under President Donald Trump.

In the absence of a stimulus deal in Congress, Trump authorized a payroll tax deferral by executive order on Saturday. The order instructs the Treasury Department to look at forgiving the deferred taxes.

Pelosi referred to the executive action as unconstitutional and argued that the payroll tax cut will harm Social Security and Medicare.

"While he says he's going to do the payroll tax, what he's doing is undermining Social Security and Medicare, so these are illusions," Pelosi said on Sunday.

In 2010, Obama signed a payroll tax reduction, and Congress extended the cut in 2011 and 2012. Pelosi supported the payroll tax cut at the time.

"Today is a victory for all Americans — for the security of our middle class, for the health of our seniors, and for economic growth and job creation. The American people spoke out clearly and, thanks to President Obama's leadership, 160 million Americans will continue to receive their payroll tax cut," Pelosi said in a statement in 2011.

In 2012, Pelosi applauded the extension of Obama's payroll tax cut as "a temporary measure to help give us a boost."

"This is necessary because our economy and our people need this boost," she said in an interview with PBS.

House, Senate and White House negotiators were not able to reach an agreement on a fourth stimulus package prior to Trump's payroll tax executive action.

To defend the $3.7 trillion price tag of the stimulus bill that the House passed in May (the HEROES Act), Pelosi often says that the Trump tax cuts enacted in 2017 added $2 trillion to the national debt. However, the $2 trillion estimated loss in tax revenue is measured over a 10-year period, while the HEROES Act would be spent in one lump sum.

To put the cost of the HEROES Act in perspective, the entire annual federal budget for FY2020 was about $4.79 trillion.

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