Treasury Secretary Steven Mnuchin. (Photo: AP) Treasury Secretary Steven Mnuchin. (Photo: AP)

Treasury Secretary Steven Mnuchin said Thursday morning that the next coronavirus relief package will not include a payroll tax cut.

"We think the payroll tax cut is a very good pro-growth policy, but the president's focus is he wants to get money into people's pockets now, because we need to reopen the economy," Mnuchin said on "Squawk Box," a CNBC program. "One of the issues I think you know about the payroll tax cut is people get that money over time. So the president's preference is to make sure that we send out direct payments quickly so that in August, people get more money."

The previous direct payments "worked before," Mnuchin continued, as "retail sales was up year-over-year 1 percent. People went out and spent that money in small businesses, and that's having a big impact in the economy. So, as I said, it's all about getting money now for kids and jobs."

A payroll tax cut, Mnuchin said, "won't be in the base bill," which will be called CARES 4.0, but "there could be CARES 5.0." The GOP is expected to release the bill Thursday, according to The Wall Street Journal.

Unemployment Benefits

As to unemployment benefits, the enhanced unemployment insurance expires next week, "so that's a priority; we need to respond to that," Mnuchin said. "As we've said before, we're not gonna continue within its current form because 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 do get a reasonable wage replacement, so it will be based on approximately 70 percent wage replacement."

Republicans said Wednesday afternoon that they were considering extending the enhanced unemployment insurance benefit "at a dramatically reduced level of $400 per month, or $100 a week, through the rest of the year," CNBC reported.

The current federal benefit of $600 per week is set to expire at the end of July. The payment is in addition to state jobless benefits.

A lot of tax credits will also be provided, he continued, "to incentivize companies to hire people."

As to the Paycheck Protection Program (PPP), Mnuchin stated that "there's a lot of bipartisan support for extending the PPP. I've had conversations with [Sens.] Cardin and Rubio, and we want to have second checks for companies whose revenues are down 50 percent or more, and who need more money to get people back to work."

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Melanie Waddell

Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.  

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