The Independent View: GAO Clears Way for Democrats to Try Overturning Trump's Payroll Tax Deferral

The Government Accountability Office (GAO), on Tuesday Sept. 15th, cleared the way for Democrats to try to Overturn IRS Guidance Implementing Trump's Payroll Tax Deferral Order.

In a Tuesday Letter to Senate Minority Leader, Charles Schumer (D-NY) and Senate Finance Committee Ranking Member, Ron Wyden (D-OR), GAO General Counsel, Thomas Armstrong, said that the Office considers the IRS Guidance to be a Rule for Purposes of the Congressional Review Act (CRA).

The Finding that the, Guidance is a Rule under the CRA, allows Senate Democrats to Force a Vote on a Resolution to Disapprove of the IRS Notice. CRA Resolutions can get a Senate Floor Vote with just Signatures from 30 Senators.

Rep. John Larson (D-CT, 1st District), the Chairman of a House Subcommittee on Social Security, has introduced a CRA Resolution to Overturn the Guidance in the House.

Under the IRS Guidance, released late last month, Employers can choose to Stop Withholding Employee-Side Social Security Payroll Taxes through the End of 2020 for Workers making under $4,000 Biweekly or $104,000 per year. Employers will then need to Recoup the Deferred Taxes by Increasing the Amount Withheld from Workers' Paychecks by April 2021. If you make $137,700 or more and Pay the Tax of 6.2% up to the Wage Base Limit, you'll Pay the Maximum Tax of $8,537.40.

Trump Mandated that Federal Employees and the Military will Not Pay the Social Security 6.2% until 2021.

Democrats have Strongly Criticized Trump's Payroll Tax Deferral, arguing that it will Hurt Workers who end up with Smaller Paychecks in 2021.

Schumer said Earlier this Month that they wanted a GAO Determination on whether the IRS Guidance was a Rule for CRA purposes in Order to "move forward with the CRA process and ultimately protect lower and middle-income Americans' hard-earned wages and retirees' Social Security benefits from Trump's plan."

Armstrong said that the GAO considers the Guidance to be a Rule because the IRS submitted its Guidance to the Office under the CRA.

While the GAO Letter allows Democrats to Proceed with their Effort to Overturn the Payroll Tax Deferral Guidance, the Effort is Unlikely to Succeed.

A Resolution to Overturn the Guidance needs a Majority to Pass the Republican Majority Senate, and Trump would likely Veto a Passed Resolution to Overturn the Guidance.