NEW YORK -- U.S. President Donald Trump's push for a payroll tax holiday in response to the coronavirus outbreak has cheered financial markets but faces skepticism in Congress, even among Republicans.
Trump went to Capitol Hill on Tuesday to pitch to Republican senators a stimulus package, including the tax cut, which he wants to last through the November elections.
But while the Dow Jones Industrial Average rose on Trump's gesture, closing more than 1,000 points higher, the proposal drew a cool response from even some of his staunchest backers in Congress, including South Carolina Sen. Lindsey Graham, who was quoted as saying he needs to "think about" whether a payroll tax holiday would be justified.
"We just had a great meeting. Tremendous unity in the Republican Party," Trump told reporters afterward. The president brushed off a question about lawmakers' apparent reluctance, saying, "There's a great feeling about doing a lot of things."
"We want to protect our shipping industry, our cruise industry," Trump said. "We want to protect our airline industry -- very important. But everybody has to be vigilant and has to be careful."
Trump's drive for tax relief comes on the heels of crashing oil prices on Monday, with the market seeing its biggest sell-off since the 2008 financial crisis.
Larry Kudlow, Trump's economic adviser, conceded that the tax holiday is "a bold proposal."
"We are consulting with leaders in the House and the Senate with respect to this package," Kudlow said at a White House news conference on Tuesday, where Trump was expected to unveil details of the stimulus plan.
Todd Mariano, U.S. director at political risk consultancy Eurasia Group, said Trump has always had his eye on a payroll tax cut. "You still have this question as to whether it's matched to the underlying economic issue, but a payroll tax cut is something Trump has wanted for reelection forever, and until the coronavirus came around he was not going to get it because Democrats control the House of Representatives," Mariano told the Nikkei Asian Review.
News of the stimulus rippled through the New York Stock Exchange, with stock prices moving up and down as details came out from the White House and Congress. The Dow saw a 900-point rally Tuesday morning, only to sink back into negative territory as investors nervously awaited further news.
U.S. airlines also rallied in early trade Tuesday in anticipation of help for the beleaguered sector.
American Airlines closed 15.3% higher despite announcing before the market opened that it was cutting its trans-Pacific capacity by 55% during the peak summer season, and a 7.5% cut to domestic capacity in April. American Airlines' shares have lost about half their value over the past month.
Delta Air Lines ended the day 4.5% higher after warning of a 65% reduction in Pacific capacity, part of a 15% overall capacity cut.
Major hotel stocks Hilton, Marriott, Wyndham and Hyatt climbed 4% or more before the market turbulence hit. Hyatt last week withdrew its 2020 earnings outlook, citing the coronavirus.
Trump on Tuesday morning again called on the Federal Reserve to cut interest rates, after the central bank lowered rates by 50 basis points early last week.
"Our pathetic, slow moving Federal Reserve, headed by Jay Powell, who raised rates too fast and lowered too late, should get our Fed Rate down to the levels of our competitor nations," Trump tweeted, not long before the Dow started plummeting.
In a separate Tuesday tweet, Trump said his administration "has been doing a great job" in response to the coronavirus outbreak.
There are now over 700 confirmed cases of COVID-19 in the U.S., more than a tenfold increase compared with the week before, according to Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases.