GOP may face choice on tax cut or stimulus checks

Senate Republicans are badly divided over whether to include stimulus checks or a payroll-tax cut in the new coronavirus relief package.

Some GOP senators warn that to stay around $1 trillion for the Republican bill they might have to pick between the two priorities, both of which have vociferous supporters and detractors.

As Republicans face pressure to keep the overall cost of the measure down, they are facing a difficult choice.

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“I think it gets complicated to try and do both, for sure, because you’ve got a limited amount of head room that you’re trying to work with here,” said Sen. John ThuneJohn Randolph ThuneMeadows says he wants Trump nomination speech 'miles and miles away' from White House The Hill's 12:30 Report: White House, Dems debate coronavirus relief package The Hill's Morning Report - Presented by the Air Line Pilots Association - Key 48 hours loom as negotiators push for relief deal MORE (S.D.), the No. 2 Republican senator. “I think in the end it’s probably going to come down to where the votes are and maybe picking and choosing.” 

Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyTrump puts trade back on 2020 agenda McConnell goes hands-off on coronavirus relief bill GOP chairmen hit back at accusation they are spreading disinformation with Biden probe MORE (R-Iowa), who characterized a payroll-tax cut as a political and PR headache, said, “I don’t think you can fit them both in.”

Sen. Roy BluntRoy Dean BluntSkepticism grows over Friday deadline for coronavirus deal GOP expects Senate to be in session next week without coronavirus deal House Republicans introduce legislation to give states 0 million for elections MORE (Mo.), a member of GOP leadership, questioned how Republicans could do both and still fit in a laundry list of other priorities. 

“I think both the direct payments and the ... elimination of payroll taxes would be a pretty big part of the package, either one would be. Both of them would be, my guess is, challenging to do and do much else under [a] trillion dollars,” he said.

If Republicans have to pick either checks or a payroll-tax cut, it could pit GOP senators against the White House, as President TrumpDonald John TrumpTrump suggests some states may 'pay nothing' as part of unemployment plan Trump denies White House asked about adding him to Mount Rushmore Trump, US face pivotal UN vote on Iran MORE is clamoring for the latter. And some senators have warned that even if a payroll-tax cut makes it into the first draft, it could still ultimately be removed.

Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellTrump signs executive orders after coronavirus relief talks falter Coronavirus deal key to Republicans protecting Senate majority Coronavirus talks collapse as negotiators fail to reach deal MORE (R-Ky.) has said Republicans want another round of direct assistance checks. He indicated during a floor speech this week that it would be in the forthcoming proposal but declined, during a weekly press conference, to say what the details of that provision would be. 

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A payroll-tax cut, however, is one of Trump’s first priorities. 

“I think it’s a very important thing. ... I think it’s an incentive for companies to hire their workers back. ... A payroll-tax cut, to me, is very important,” Trump told reports about the idea at the White House this week. 

The White House has been pushing for months to do a payroll-tax cut. As part of a concession to the White House, Congress waived the part of the payroll tax that employers pay into the Social Security Trust Fund through the end of the year as part of the March bill.

House Minority Leader Kevin McCarthyKevin Owen McCarthySunday shows preview: White House, congressional Democrats unable to breach stalemate over coronavirus relief A trillion stimulus, but Kevin McCarthy for renewable energy — leading businesses want to change that When will telling the truth in politics matter again? MORE (R-Calif.), Treasury Secretary Steven MnuchinSteven Terner MnuchinWhite House officials, Democrats spar over legality, substance of executive orders Sunday shows - Trump coronavirus executive orders reverberate Pelosi: 'Of course there's room for compromise' on 0-per-week unemployment benefit MORE and White House chief of staff Mark MeadowsMark Randall MeadowsMeadows says he wants Trump nomination speech 'miles and miles away' from White House Pelosi: 'Of course there's room for compromise' on 0-per-week unemployment benefit Pelosi, Schumer slam Trump executive orders, call for GOP to come back to negotiating table MORE have each indicated that the payroll-tax cut will be a part of the coming Republican proposal. 

But Mnuchin, asked if it had to be in there, hedged, telling reporters “we’ll see.” And McConnell, during a weekly press conference, was more circumspect, describing it as an unresolved point of discussion with the administration. 

“There are some differences of opinion on the question of the payroll-tax cut and whether that’s the best way to go, and so we’re still in discussion with the administration on that,” he said.

One idea would be to scale both of the proposals down and try to include both, potentially either through smaller checks and a partial payroll-tax cut or to make the payroll-tax cut a deferral, which would help with the immediate cost of the bill but have to be paid back later. 

“We’re challenged on … how big can the stimulus checks be if you’re also doing the payroll-tax cut,” said Sen. Kevin CramerKevin John CramerThe Hill's Coronavirus Report: iBIO Chairman and CEO Thomas Isett says developing a safe vaccine is paramount; US surpasses 150,000 coronavirus deaths with roughy one death per minute McConnell tees up showdown on unemployment benefits Senate panel scraps confirmation hearing for controversial Pentagon nominee at last minute MORE (R-N.D.).

Asked if he thought Republicans needed to pick, he added: “Either that or the checks are smaller and the tax cuts are more modest.” 

Republicans could also bust the roughly $1 trillion spending limit, something some senators expect will happen inevitably given how the price of other coronavirus bills creeped up during negotiations. But a growing number of Republican senators say they are concerned about the impact of the roughly $3 trillion already appropriated by Congress on the nation’s debt. 

Sen. Ted CruzRafael (Ted) Edward CruzOn The Trail: Pence's knives come out Pat Fallon wins GOP nomination in race to succeed DNI Ratcliffe The Hill's Morning Report - Presented by the Air Line Pilots Association - Negotiators 'far apart' as talks yield little ahead of deadline MORE (R-Texas) questioned the spending during a closed-door lunch this week, asking his colleagues, “What in the hell are we doing?” Sen. Rand PaulRandal (Rand) Howard PaulTrump-backed Hagerty wins Tennessee GOP Senate primary Senators introduce bill to block Trump armed drone sale measure The Hill's Campaign Report: Trump's visit to battleground Ohio overshadowed by coronavirus MORE (R-Ky.) compared his Senate Republican colleagues to a meeting of the “Bernie bros.” 

Sen. Mike BraunMichael BraunSkepticism grows over Friday deadline for coronavirus deal Negotiators hit gas on coronavirus talks as frustration mounts Lawmakers aim for COVID-19 relief deal this week MORE (R-Ind.) warned that if GOP leadership agrees to go above $1 trillion, they’ll risk losing conservatives, who are squeamish about the price tag.

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“If it ... gets beyond that, you’re going to lose a lot of conservatives,” Braun said. “I just think that’s going to be a hard threshold point where you get a lot of people starting to squirm.”

But the debate divides GOP senators because both ideas face opposition from some parts of the caucus. 

Some Senate Republicans have appeared skeptical about the need for a second round of checks. The first bill included a one-time check of $1,200 for individuals who make up to $75,000 per year. 

“I’m not sure that’s the best use of the money. ... That was a temporary measure in my view because of the lifeline we needed to give people who had no income. And now they’ve presumably had an opportunity to apply for and receive unemployment compensation,” said Sen. John CornynJohn CornynCOVID-19 bill limiting liability would strike the wrong balance From a Republican donor to Senate GOP: Remove marriage penalty or risk alienating voters Skepticism grows over Friday deadline for coronavirus deal MORE (R-Texas), who has also warned that a payroll-tax cut isn’t practical. 

GOP senators including Lindsey GrahamLindsey Olin GrahamSeveral GOP lawmakers express concern over Trump executive orders Graham says he appreciates Trump orders, but 'would much prefer a congressional agreement' Sunday shows preview: White House, congressional Democrats unable to breach stalemate over coronavirus relief MORE (S.C.), Steve DainesSteven (Steve) David DainesFrom a Republican donor to Senate GOP: Remove marriage penalty or risk alienating voters The Hill's Campaign Report: COVID-19 puts conventions in flux  OVERNIGHT ENERGY: Trump signs major conservation bill into law | Senate votes to confirm Energy's No. 2 official | Trump Jr. expresses opposition to Pebble Mine project MORE (Mont.) and Marsha BlackburnMarsha BlackburnThe Hill's Morning Report - Presented by the Air Line Pilots Association - Negotiators 'far apart' as talks yield little ahead of deadline Tennessee primary battle turns nasty for Republicans GOP may face choice on tax cut or stimulus checks MORE (Tenn.) have said they would support a payroll-tax cut. 

But the idea has several critics within the caucus. Thune noted that while stimulus checks have their own detractors, there is probably more support for them over a payroll-tax cut. 

“There are people who aren’t for the checks either, but my sense is ... there’s not much, I would say, support for the payroll-tax cut,” Thune said. “There is considerable support for stimulus checks if we’re going to do something on an individual, personal level.”