President Donald Trump and top economic officials pitched Senate Republicans on a payroll tax cut and other policy proposals meant to ease the economic fallout from the coronavirus outbreak during a closed-door lunch on Tuesday, but multiple sources told CNN no consensus was reached on the proposals.
Trump made the rare trip to Capitol Hill on Tuesday after promising “major” and “dramatic” economic steps. But while sources familiar with the lunch said a multitude of options were discussed, members emerged without a concrete plan.
After the hour-long meeting in the Capitol, where the conversation included proposals of payroll tax holidays for workers, targeted relief for hard-hit industries – like airlines, cruise ships, restaurants and retail – tax cuts to help small businesses better afford sick leave for their workers and other proposals, some GOP senators remained skeptical about quickly passing an expensive stimulus package.
Senate Majority Leader Mitch McConnell said afterward that Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, a Democrat, would have “ball control” on negotiations that could take place in the coming weeks and that Senate Republicans would defer to them to see if they could cut a deal.
“Ultimately, it’s a decision between the President of the United States and Speaker Pelosi because she has to get something through the House,” explained Sen. John Barrasso of Wyoming, a member of the Republican leadership.
Several senators said the most pressing item for Congress to take up was passing a law to help certify additional masks for use in hospitals, a bill that’s sponsored by GOP Sen. Deb Fischer of Nebraska.
“Like this week. Like right now. Like yesterday,” said Republican Sen. John Kennedy of Louisiana, who said there was hope the Senate would pass it this week.
Sen. Ron Johnson, a Wisconsin Republican, said that senators talked about “a host of things we can do.”
“We talked about infrastructure, we talked about that specific problem right now with a law regarding the certification of those masks. We talked about, obviously, payroll tax relief,” Johnson said.
“He wants action,” Johnson said about Trump. “He realizes this is an extraordinary event and might require extraordinary action.”
Payroll tax cut
During the lunch, presentations were given by Mnuchin, Vice President Mike Pence, Larry Kudlow, the director of the National Economic Council, and Trump. But they were just a starting point as Republican members also threw ideas at the wall. It was a conversation, participants said.
Some Republican senators have been skeptical of a payroll tax cut, which would put extra cash into people’s pockets in hopes of boosting the economy. Several lawmakers have questioned how effective it would be during the outbreak, when more people are being encouraged to stay home.
According to several sources familiar with the lunch, Trump floated the idea of a permanent payroll tax cut, but also weighed having a temporary cut that lasted for several months.
While some assumed it would be limited, Trump suggested he wouldn’t want the tax cut to expire before the November presidential election, noting at one point that he would get credit from voters if it passed, according to one person familiar.
Regarding the idea of a permanent tax cut, Indiana Sen. Mike Braun later told CNN, “It’s probably something I wouldn’t do.”
Sick leave tax credits
One GOP senator said there was a discussion about a proposal to extend tax credits for small companies that want to provide family and sick leave to their employees, a key issue during the outbreak since some workers who don’t get sick pay might refuse to stay home when they are ill if it means missing a paycheck.
The senator said they also discussed actions the administration could take on its own that would help the economy, like waiving the requirement that people make their estimated tax payments. The idea would be relatively inexpensive, the senator said, because interest rates are low and it would “keep a lot of money in the economy that otherwise would have gone to pay quarterly taxes.”
Trump’s top economic advisers raised the idea of paid family sick leave and targeted relief for industries hardest hit by the outbreak, like hotels, airlines and cruise lines.
‘I wish I had a list’
A lot of Republicans emerging from the meeting were sensitive that the President is clearly troubled by the downturn in the stock market, a fact that was clear during lunch Tuesday. But, Republicans are also struggling to square the President’s worries with traditional Republican orthodoxy that government intervention in the economy – especially this early – could be seen as a shift in GOP policy given some of the Republican backlash to the bailouts of 2008.
Sen. Pat Roberts, a Republican from Kansas, said he wished there had been a bit more detail about what was actually on the table.
“I don’t have a list. I wish I had a list,” Roberts said adding that Trump was “determined” to get something done on the economy.
Sen. Richard Shelby, the chairman of the Appropriations Committee, said GOP senators asked Trump how the package would be paid for but they didn’t get an answer.
Some Republican senators were still cautious about the idea of an economic stimulus even after Trump’s sell. The bottom line is that some of these are not traditional Republican ideas. Mandatory paid sick leave, for example, isn’t necessarily widely accepted within the GOP conference and the length and scope of the payroll tax cut was also considered controversial for some.
Braun said he was skeptical of a package of economic stimulus items that were aimed at propping up large corporations from the oil industry to the airlines.
“You got to be careful even here that we aren’t doing this based off of hysteria or overdramatization,” he warned.
Braun added: “If it is aimed at small businesses you know I would probably look at it differently. If it is trying to help an oil industry, then I think they can take care of themselves.”
Leaving the lunch, Trump offered no details on the discussions, but said, “You’ll be hearing about it soon.”
This story has been updated with additional developments Tuesday following Trump’s meeting with lawmakers.
CNN’s Jeremy Diamond, Veronica Stracqualursi, Phil Mattingly and Kevin Liptak contributed to this report.
