Trump Administration Considering Payroll Tax Cut, Other Bail-Outs To Support Economy During Coronavirus Scare

VIDEO — Trump Fights Back in Fiery CPAC Speech

( – The spread of coronavirus around the world has been rocking financial markets here and abroad for a few weeks. Now, with the virus beginning to make its way into the United States, with a few epicenters of concern, officials are wondering what federal measures, if any, need to be taken to protect the American economy.

Stock markets have been up and down recently, but the big news was Monday, when the markets experienced the largest single-day drop since the financial crisis of 2008. The major indices all rebounded slightly Tuesday morning, returning them to “bear market” territory.

President Donald Trump and his administration are trying to calm the fear of investors and stabilize the markets, at least somewhat, and he did so Monday night by announcing he is considering both “very substantial relief” for industries hardest hit by coronavirus, as well as a payroll tax cut.The president said he would soon announce on Tuesday “very dramatic” measures to support the American economy.

Trump is concerned about hard-hit industries — such as travel, tourism and the airlines — as well as hourly workers who may lose pay if they stay home to avoid the virus. He wants to make sure “they don’t get penalized for something that’s not their fault.”

This marks a reversal from what the administration said last week, when Steve Mnuchin, the treasury secretary said the market swings were occurring because “the markets struggle to assess new risks.”

“We will get through this,” he said on March 3, after announcing the Trump administration wasn’t considering a payroll tax cut.

With the virus continuing to spread and the financial ramifications becoming more dire, it appears Trump and his administration have decided to reverse course.

There’s no word yet on what the exact measures the Trump administration is considering to boost the economy, or at least stabilize the markets. The focus, according to Mnuchin, though, will be on workers who need to remain at home as well as small businesses that require liquidity.

At a White House news conference Monday, Mnuchin again deflected a bit, saying the current market turmoil “is not like the financial crisis” and said “an unprecedented move in the oil market” was one of the major reasons the U.S. stock market has been so volatile lately.

Saudi Arabia and Russia have been engaged in a price war recently, with the Saudis slashing prices this past weekend in an effort to apparently bring Russia to the negotiating table. That price war has caused oil prices to plummet and then increase rapidly in only a few days.

Jerome Powell, the chairman of the Federal Reserve, has been having daily conversations with Mnuchin about the economy, with the treasury secretary reiterating that Trump said he’d use “all our tools” to boost the economy during this challenging time.

A payroll tax cut would seem to have supporters in Congress from the Republicans but obvious detractors from Democrats. It’ll be interesting to see what Trump says on Tuesday when he plans to announce specific measures.