Even as President Donald Trump insists the U.S. economy is “the best in the world,”, the president sent mixed messages on Tuesday about whether he was considering a payroll tax cut as a way to stimulate the economy.
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"I've been thinking about payroll taxes for a long time," the president told reporters in the Oval Office during a photo-op with Romanian President Klaus Iohannis. "Whether or not we do it now, it's not being done because of recession."
In saying so, the president contradicted his own aides who had pushed back on the notion that a payroll tax cut was under consideration.
"It is not being considered at this time," White House deputy press secretary Hogan Gidley said during an interview with FOX News earlier Tuesday. "He's looking at at tax cuts again -- we think that spurs on the economic expansion."
The idea of a payroll tax cut has also been floated in recent days and was discussed during a White House policy meeting on Monday, officials said, but they said it had been tabled and was not under active consideration.
At the photo-op, Trump floated a host of ideas he said are under consideration as it relates to tax cuts -- saying there’s been discussion about indexing and a capital gains tax cut -- but also said he’s not doing anything right now.
“I'm not talking about doing anything at this moment,” he said in response to a question about whether the country can afford tax cuts.
Publicly, the president continues to strike an optimistic tone about the strength of the U.S. economy and has sent his top economic aides on television to further amplify the White House message.
“We have the strongest economy, by far, in the world,” Trump insisted to reporters on Sunday. “I don’t see a recession. I mean, the world is in a recession right now. And -- although, that's too big a statement.”
To the extent Trump does acknowledge weakness in the economy, he points blame at the broader global landscape and at Federal Reserve Chairman Jerome Powell, whom he hand-picked for the job but has since fallen out of favor with Trump, who believes the Fed should further lower interest rates.
.....The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!— Donald J. Trump (@realDonaldTrump) August 19, 2019
The president’s renewed interest in another round of tax cuts comes after his previous pledge, in the weeks just before the 2018 midterm elections, to pursue a 10 percent tax cut for the middle class. After the election, the president dropped all discussion of the promised tax cuts.
Trump continued to insist that the economy is in great shape but also continued to harshly criticize the Federal Reserve, saying the Fed needs to “do its job” and cut rates.
“We're far from the recession,” Trump said. “If the fed would do its job, I think it would have a tremendous spurt of growth. A tremendous spurt, the fed is psychologically very important, less so actually, but very psychologically important, if the fed would do its job, which it's done poorly over the last year and a half, you would see a burst of growth like you've never seen before."