President Donald Trump announced plans for a massive stimulus package that would involve direct cash payments to American workers, dropping the administration’s previously floated payroll tax cut that Democrats derided as ineffective and skewed to richer households.
“Payroll tax cut is one way but it does come over a period of months, many months,” Trump said. “We want to do something much faster.”
Treasury Secretary Steven Mnuchin, joining Trump in the White House briefing room Tuesday, called the proposal “business interruption payments.”
“Although the president likes the idea of the payroll tax holiday, I will tell you what we’ve heard from many people … the payroll tax holiday would get people money over the next six-eight months. We’re looking at sending checks to Americans immediately.” He said the checks could be distributed within two weeks.
“Americans need cash now, and the president wants to get cash now,” Mnuchin said. “And I mean now. In the next two weeks.”
It wasn’t immediately clear checks could be sent that quickly, however. In the 2008 economic aid package (PL 110-185) enacted during the Great Recession, checks weren’t distributed for several months as the IRS needed to time to ramp up the program.
Sen. Mike Braun, R-Ind., said after Mnuchin briefed Senate Republicans Tuesday that checks might not be ready to go out until late April.
The 2008 stimulus provided checks worth $300 to $600 per person, and double that for married couples filing jointly. Families also received $300 for each child under 17. The benefit phased out for individuals earning more than $75,000 and joint filers reporting more than $150,000.
A congressional aide said the tax measure could cost upwards of $500 billion, which based on prior cost estimates could potentially deliver more than $1,000 per person. Obama administration economic adviser Jason Furman recently floated a $350 billion proposal to distribute $1,000 checks to every U.S. citizen, with another $500 per child.
Mnuchin presented details to the Senate Republican Conference at Tuesday’s policy lunch. We look forward to having bipartisan support. We’re now working with the Senate to pass this legislation very quickly,” he said.
He also said he has spoken Tuesday with Speaker Nancy Pelosi, D-Calif. Pelosi’s deputy chief of staff, Drew Hammill, later tweeted that she won’t support cash payments without some type of cutoff based on income. “The Speaker supports Congress taking an approach targeted to those most in need,” he wrote.
Mnuchin earlier Tuesday said the payments wouldn’t flow to the wealthiest Americans. “We don’t need to send people who make a million dollars a year checks,” he said.
Speaking to reporters after presenting the plan to Senate Republicans, Mnuchin said that in concert with other parts of the aid request, including direct cash grants and loans, the White House proposal would inject $1 trillion in stimulus into the economy.
“It’s a big number,” he said. “This is a very unique situation.” He said with rock-bottom interest rates, it wasn’t the right time to worry about deficits.
Texas Republican Sen. John Cornyn said Tuesday before the lunch that he would consider supporting direct cash payments to Americans.
“There were mixed feelings about the payroll tax holiday because obviously that funds Social Security and when you quit the holiday it just looks like you’ve raised taxes on everybody,” Cornyn said, adding that he wants to hear details before making a final decision.
“I’d want to make sure we’re not throwing a lot money at people who don’t need the money and focusing on wage workers and people who work for tips, who through no fault of their own don’t have a job anymore,” Cornyn said.
Senate Appropriations Chairman Richard C. Shelby, R-Ala., on the other hand, said he and others had “misgivings” about sending out pricey stimulus checks.
Trump said rather than continuing to chip away at economic aid in smaller packages, he and Senate Majority Leader Mitch McConnell, R-Ky., agree there should be one huge bill that passes immediately.
“We want to go big, go solid. The country is very strong,” Trump said. “With this invisible enemy, we don’t want airlines going out of business. We don’t want people losing their jobs or not having money to live when they were doing very well just four weeks ago. So, we’re going big, and that’s the way it’ll be.”
David Lerman contributed to this report.