Trump’s payroll tax cut draws mixed reviews

WASHINGTON — One of President Donald Trump’s key proposals to confront the economic fallout of the novel coronavirus — a payroll tax cut — got mixed reviews from Senate Republicans on Tuesday during a Capitol Hill strategy-planning lunch that ended without agreement on the details of a possible stimulus plan.

But in the first sign of bipartisan cooperation to address the growing health crisis, Treasury Secretary Steven T. Mnuchin was dispatched to begin negotiating an economic package with House Speaker Nancy Pelosi.

The pairing of Mnuchin and Pelosi, D-San Francisco, on a coronavirus bill comes as Republicans and Democrats are at loggerheads on an economic response. In addition to the payroll tax cut, the White House supports tax relief for the travel and tourism industries.

But Democrats balked at tax cuts without financial support for sick or quarantined workers who may miss paychecks or currently receive no sick pay.

Even some Republicans are skeptical about whether a payroll tax cut is the best approach right now, according to Sen. Lindsey Graham, R-S.C., and other senators. The White House floated a payroll tax holiday — designed to boost the paychecks of workers — that could be valued at more than $300 billion, according to one Republican senator in the room.

“At this point I am not ruling anything out. But obviously whatever we do, there has to be a really good rationale for it,” said Sen. John Thune of South Dakota, the Republican whip.

At the lunch, senators said Trump — joined by Mnuchin and economic adviser Larry Kudlow — said the meeting was more about discussing options than about laying out a specific stimulus plan.

“We talked in general about the tools in our arsenal. If the administration has decided on the specific tools, they didn’t share that with us. That is not a criticism. This was to allow us to have the input,” said Sen. John Kennedy, RLa.

Though Trump said Monday he would unveil “major” economic stimulus proposals on Tuesday, no specific plan was released. Kudlow said only that the president wanted a “temporary payroll tax cut holiday, which I think he would prefer to last until the end of the year.” Kudlow gave no details about how large a cut it would be or how much it would cost.

The new bipartisan negotiating team is a reunion of sorts for Pelosi and Mnuchin, who is one of the only Trump administration officials who has successfully negotiated with the Democratic House.

Pelosi and Mnuchin worked well together last year to enact a budget deal. During the process of crafting that bill — which raised caps on spending and lifted the federal debt ceiling — Pelosi and Mnuchin built a mutual trust and respect. Mnuchin is a relatively apolitical member of Trump’s Cabinet with a laserlike focus on the economy. Pelosi is a longtime legislator well practiced in crafting political deals.

The talks mark the start of what is likely to be a massive piece of legislation to approve billions of dollars to stimulate the economy and help American workers impacted by self-quarantines and school or work closures in the coming months.

“Everybody ought to understand this is going to cost us billions and billions of dollars,” Sen. Richard Burr, R-N.C., said.

Mnuchin has been given “ball control” for the administration on the issue, Senate Majority Leader Mitch McConnell, R-Ky., told reporters on Tuesday, putting Senate Republicans’ seal of approval on Mnuchin-Pelosi negotiations as well.