Payroll tax cuts won't be in the "base bill" of the next phase of coronavirus relief legislation, as President Donald Trump is more focused on sending direct payments to Americans more quickly, Treasury Secretary Steven Mnuchin said Thursday.
"Let me be clear; we think the tax cut is a pro-growth policy," Mnuchin said on CNBC's "Squawk Box." "The president's focus is (that) he wants to get money into people's pockets now, because we need to reopen the economy."
With a payroll tax cut, people would "get that money over time," Mnuchin added. "The president's preference is to make sure we send out direct payments quickly so in August people get more money. There's no question this worked before...people spent that in small businesses and it's having a big impact. Now it's all about getting money for kids and jobs."
But, he added, there could still be another relief pack.age, a "CARES 5.0," later.
Late Wednesday Senate Republicans and the White House reached a tentative agreement for more money for COVID-19 testing, but still, there are deep disagreements in the scope of the $1 trillion for federal aid. Part of the hold up was Trump's push for the payroll tax cut, but according to a Republican who was granted anonymity to discuss the talks, almost no GOP senators supported the idea.
Mnuchin said Thursday that the White House is "on the same page" with Republicans for the bill, and the president's priority is "kids and jobs."
"We need to get kids back to schools safely," said Mnuchin. "They had $100 billion in their HEROES Act. We increased that to $105 billion."
There must still be a response to the enhanced unemployment insurance payments that will expire next week, said Mnuchin, stressing that the $600 weekly benefit will not continue in its current form, but will more likely be based on a 70% wage replacement plan.
"We're not going to pay people more money to stay at home than work, but we want to make sure that the people that are out there that can't find jobs get a wage replacement," said Mnuchin. "And we'll have tax credits to incentivize companies to hire people."
Meanwhile, Democrat presidential hopeful Joe Biden has been talking about steep hikes in corporate and individual tax rates, and that will not happen as long as Trump is in office, he said.
"We have no intention of raising the corporate tax rate," Mnuchin said, as the rate "spurred the greatest economic recovery. And Trump wants individual taxes to be "fair."
"Tax and spend is not the way to restore American workers," he added.