Blow for Trump as Republicans scrap plans for payroll tax in new stimulus bill

GOP Senator Charles E Grassley warned this week the cut would make president's party appear to be raiding Social Security and Medicare

In a blow to Donald Trump, Senate Republicans and White House officials have reached a handshake deal on a new coronavirus stimulus package that does not include the payroll tax cut the president demanded.

"Not in this" package, Treasury Secretary Steven Mnuchin told reporters on Thursday. "But we're going to come back again."

The president has blown up deals his team has brokered with lawmakers before, and he has yet to tweet about the emerging deal. As recently as in an interview that aired on Sunday morning, Mr Trump was threatening to veto any fifth recovery bill that excluded the payroll tax cut.

"I'll have to see, but yeah, I would consider not signing it if we don't have a payroll tax cut," he told Fox News Sunday host Chris Wallace during an often contentious interview.

The White House had not responded to an inquiry about whether the president has signed off on excluding the tax cut, and whether he would now sign a bill without one.

The shift came after a list of GOP senators expressed opposition to the idea, including Senate Finance Committee Chairman Charles E Grassley, whom Mr Trump has credited as being a tough-speaking and hard-nosed legislator.

"They're going to see a little bit of money. Are they going to spend it? Some people will," the Iowa Republican said this week. "Some people won't even notice they're getting it, if they're getting a lot of overtime or different hours that they're working."

The president's proposed cut would lessen the amount of taxes taken out of a worker's paycheck, meaning they would take home more money. But it also would take from the stream that fills coveted-by-voters programmes like Social Security and Medicare.

Mr Grassley warned this week that a payroll tax cut could come over as the GOP making cuts to those programmes.

That's risky business in an election year – and with Mr Trump losing supporters among older voters who depend on those very programmes. If he lacks coattails in states with vulnerable GOP senators, the Republican majority in the upper chamber is in jeopardy, political expert say.

Rather than use his morning tweets to get behind the bill and create momentum for its passage, Mr Trump spent the morning retweeting social media posts about gun-toting homeowners in Missouri, Black Lives Matter protesters, the media, congressional Democrats, and even a former GOP Department of Homeland Security chief. In so doing, he again revealed his penchant for communicating almost exclusively to his political base – and appetite for conservative cable news coverage.

"Recently watched failed RINO Tom Ridge, former head of Homeland Security, trying to justify his sudden love of the Radical Left Mayor of Portland, who last night was booed & shouted out of existence by the agitators & anarchists," Mr Trump wrote as news of the payroll cut exclusion was breaking. "Love watching pathetic Never Trumpers squirm!"

It was not until 12:09 p.m. that he weighed in, tweeting: "The Democrats have stated strongly that they won't approve a Payroll Tax Cut (too bad!). It would be great for workers. The Republicans, therefore, didn't want to ask for it. Dems, as usual, are hurting the working men and women of our Country!"

His top spokeswoman, Kayleigh McEnany, addressed it first during a morning television interview by also pinning the blame for the payroll cut's exclusion on Democrats – rather than sceptical Republicans like Mr Grassley.

"It's a real shame Democrats don't want to give our hardworking low- and middle-income Americans a tax cut," she told Fox News.