Trump's big choice: Reopen economy with 'big bang' or just less-infected areas
President sounds optimism as strategy crafted behind the scenes: 'I would say we're ahead of schedule.'
The Facts Inside Our Reporter’s Notebook
As President Trump strategizes beyond the pandemic, he’s wrestling with whether to open a post-coronavirus economy nationwide with a “big bang” or more gradually with less-infected zones jump-starting the effort.
"We can do it phases, we could go to some areas, which you know, some areas are much less affected than others, but it would be nice to be able to open with a big bang and open up our country-- or certainly most of our country--and I think we're going to do that soon," Trump said Wednesday evening.
"I would say we're ahead of schedule. Now you hate to say it too loudly, because all of a sudden things don't happen. But I think we will be sooner rather than later."
Trump said he would not move to re-open the economy without consulting with his medical advisers. "I would rely very heavily on them," he said.
Multiple lawmakers, as well as Trump, have spoken favorably about passing an additional coronavirus stimulus package, including one focused on rebuilding infrastructure.
However, just 13 percent of registered voters said infrastructure was their top spending priority for a new coronavirus stimulus, according to the Just the News Daily Poll with Scott Rasmussen set for release Thursday. Voters in the Just the News poll placed "medical research and prevention" (36%) and putting "as money as possible into the pockets of Americans hurt by the downturn" (28%) as their top spending priorities.
Former Ronald Reagan economic adviser Arthur Laffer, a critic of the $2.2 trillion coronavirus stimulus package passed by Congress and quickly signed into law by Trump in March, is concerned that infrastructure packages and prolonged government payments to citizens and businesses will slow growth.
Laffer warned in a Wall Street Journal op-ed that “all this spending will decrease the number of Americans who return quickly to work after the crisis.
“A much simpler and more effective stimulus would be a pro-growth tax cut, such as a suspension of the payroll tax. In addition to boosting take-home pay, it would give 27 million small businesses an incentive to hire rather than fire,” he wrote.
Laffer, whom the president called “a brilliant man,” has spoken multiple times with Trump and his economic advisers.
“Mr. Trump would be wise to learn the lessons from Barack Obama’s $830 billion American Recovery and Reinvestment Act of 2009,” Laffer wrote in the Journal. “In the wake of the housing meltdown and financial crisis, Congress passed the largest stimulus-spending package in American history. The economic spark and job creation were supposed to appear almost immediately, as money flowed into ‘shovel ready’ construction projects. Vice President Joe Biden barnstormed around the country in 2010 promising a ‘Summer of Recovery’ that never came."
Rather than adopting new cash and loan stimulus packages--for infrastructure and other programs--Laffer says a payroll tax cut would do more to jolt the economy back to life.
“I would love to see a payroll tax cut,” Trump said at a press briefing Tuesday. “And I think, on behalf of the people, it would be quick. Now, it’s a longer term — you know, it’s a longer time, because it’s over a period of a year or whatever you want to make it. But I would love to see a payroll tax cut. There are many people that would like to see it as a permanent tax cut — payroll tax cut."
A payroll tax was proposed by congressional Republicans but blocked by Democrats in the $2.2 trillion stimulus bill. Democrats have said they supported such a cut a decade ago but did not believe it provided enough impact.
“You know, I don’t know if maybe they think it’s good politics to stop it,” Trump said. “The Democrats are stopping it, but I think it’s — I think there’s a certain flexibility. I think it’s something that we should do both for business and the people.
"But this would get money into the hands of small business immediately, money in the hands of people — the workers and people — immediately. And it would be over an extended period. And it would be simple to do. It’s so easy to do. It’s a great tax cut, and I’d love you to speak to the Democrats, and let’s get it done."