Top White House economic adviser Larry Kudlow said Thursday the next pandemic legislative package should provide incentives for medium- and long-term growth instead of focusing on relief.
“When we come back to negotiations, as we undoubtedly will, I think it’s very important that we move from rescue to reopening to more growth pouring into incentives for the medium- and longer-term,” he said during a Washington Post event.
Kudlow listed several policy initiatives that the White House would like to see in the next bill, including a payroll tax cut; a “large” tax deduction for dining, entertainment, sporting events, travel, and tourism; a corporate income tax break; and tax relief for businesses relocating operations in the United States. He also mentioned a tax exclusion on capital gains for all asset purchases.
“I’m not talking just about stocks — all assets: businesses, factories, oil fields,” Kudlow said. He did not provide specifies on how the exclusion would work.
White House officials say they’re not yet engaging with lawmakers on the next coronavirus-related bill and instead want to see how the economy reacts to the first three relief packages that Washington enacted in relatively quick succession. But Treasury Secretary Steven Mnuchin said Thursday that another coronavirus package would be needed despite many in the Trump administration and Republicans in Congress saying that consideration of such a bill is premature.
“I think there is a strong likelihood we will need another bill,” Mnuchin said during a virtual event with the Hill on Thursday.
Kudlow also cast doubt on the administration backing an extension of the $600 boost for unemployment benefits that is set to expire on July 31.
“I think many Americans want to go back to work,” he said. “I think we learned in the last recession, the Great Recession, that increasing unemployment benefits are disincentives to work.”
The Democratic HEROES Act, approved by the House last week, extends the aid to Jan. 31, 2021, for most unemployed workers. The Senate is not expected to take up the HEROES Act.
The $600 payment has become a partisan issue. Democrats say the benefits are needed to keep laid-off workers afloat to prevent the pandemic from turning into a lasting economic catastrophe. Republicans, though, say the benefits lead the jobless to forgo returning to work, an incentive that will prevent labor market recovery.
