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Senate, Supreme Court opt out of Trump payroll tax deferral

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The U.S. Senate and Supreme Court are joining the House in not implementing President Donald Trump’s order allowing employers to defer payroll taxes owed by workers, Missouri Senator Roy Blunt said Tuesday.

“My belief is we are not moving forward with the payroll tax deferral in the Senate,” Blunt, a member of the Senate GOP leadership, told reporters. “We’re not going to do it and the House isn’t either. Nor is the Supreme Court.”

Kathy Arberg, a spokeswoman for the Supreme Court, confirmed that the court would not stop withholding payroll taxes from employees’ paychecks.

Blunt said that technical issues with the Senate’s payroll processing systems were partly to blame. The Democratic-controlled House of Representatives said last week it would not defer collecting payroll taxes for staff and other workers, adding that it was not in the best interest of the chamber or its employees. The Senate Disbursing Office, which handles payroll for the chamber, didn’t immediately respond to a request to comment.

The Office of Management and Budget has directed federal agencies, which are part of the executive branch, to stop withholding payroll taxes, which must be paid back next year unless Congress forgives the levies. That could mean sharply higher withholding for those workers in early 2021.

Few employers outside the federal government and the military have taken up the option, hobbling the intended effort to bolster incomes and spending. Costco Wholesale Corp., United Parcel Service Inc. and FedEx Corp. are among employers that have said they aren’t participating.

The deferral applies to those making less than $4,000 every two weeks, which amounts to about $104,000 a year. Senators wouldn’t qualify because they earn at least $174,000 annually, but many office staffers would qualify.

Trump had pushed the deferral and a tandem executive move on supplemental unemployment insurance benefits to make up for the failure of Congress to pass additional pandemic relief. With lawmakers increasingly unlikely to approve more stimulus before the election, the consequences of limited income support are growing more pronounced.

— With assistance from Greg Stohr

Laura Davison and Laura Litvan
Bloomberg News
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