Trump’s tax cut dreams hit Republican resistance
While there’s plenty of GOP support for the liability provisions, the president’s beloved tax cut is another story. Republicans are not universally in favor of it. And McConnell hates dividing his conference because it weakens his negotiating hand.
When asked about Trump’s demand on payroll taxes on Tuesday, McConnell said “if there’s any red line, it’s on litigation.” And in interviews with a series of Republicans on Tuesday it was clear why McConnell was focusing on the liability angle rather than the payroll tax cut.
Sen. John Thune of South Dakota (R-S.D.), McConnell’s top deputy, said that protecting employers and employees from lawsuits is “straightforward.” But when asked about the payroll tax cut, he replied: “I’m not a particular fan of that.”
“I guess I’m open to being persuaded that it’s something that could be effective. But I think some of the things we’re currently doing are having a bigger impact,” he said, listing aid programs for small businesses and direct payments to the public. “The payroll tax cut only helps if you’re on the payroll.”
Congress in March deferred employers’ payroll taxes for the year. But Trump has been explicit that more needs to be done for workers.
“We’re not doing anything without a payroll tax cut,” Trump told Fox News over the weekend. On Tuesday he reupped that demand, adding in that he wants to eliminate sanctuary cities for undocumented immigrants and “perhaps” cutting capital gains taxes as well.
A White House official said the president is “passionate” about the idea of a payroll tax cut as one that gives workers more buying power and helps businesses more easily staff up moving forward. After failing to secure it in previous aid bills, Trump may be even more determined this time around.
“It should be on the table. The president supports it. You shore up the trust fund with a transfer,” agreed Sen. Steve Daines (R-Mont.). “This is a way to get more dollars into the hands of employees as well as employers.”
Democrats are averse to both the payroll tax cut and the liability reform. Asked about Trump’s declaration on the payroll tax during a Monday appearance on CNN, Pelosi said “no way” and that drawing a line in the sand was counterproductive. But she also said she wasn’t going to negotiate in the press.
Senate Minority Whip Dick Durbin (D-Ill.) said on Tuesday that it would be a “serious mistake” to embrace shielding companies from coronavirus lawsuits and that he would not rule out the payroll tax. But he also made clear that Democrats are “of the impression that Nancy Pelosi has the lead on the negotiation.”
Some Republicans said the war of words between Pelosi and Trump was all part of the dance.
“I heard the speaker say ‘no way’ and the president said he wouldn’t sign a bill without it. So it sounds like the beginning of a negotiation,” said Sen. John Cornyn (R-Texas). Still, he added that while there would be debate about the payroll tax cut, liability reform was an “imperative.”
Yet having two starkly different messages from the White House and Republicans in Congress often undercuts the GOP’s negotiating stance. And if Trump wants to win over his party he’s got work to do, even among strong allies.
Sen. Rand Paul (R-Ky.), who is close to the president, said he agreed with McConnell’s focus on liability protections and that while he liked the idea of cutting taxes, it weighed on him to draw down the Social Security accounts. Maybe, he said, the best thing for Congress to do was nothing at all.
“I’m not really for more stuff here. I’m here to oppose anything more coming from Washington,” Paul said. “Because there’s nothing to give.”
Marianne LeVine contributed to this report.