WASHINGTON — President Donald Trump’s proposal to send checks to millions of Americans hurt by his tariff policies is running into resistance from some Republican lawmakers on Capitol Hill who’d like to pay down the deficit instead.
Last week, Trump said he was considering providing consumers with financial relief from the tens of billions of dollars his administration has collected since it instituted its higher duties earlier this year on nearly every good the U.S. imports. The U.S. Treasury has reported raising about $150 billion from the program so far.
“We’re thinking about a little rebate. But the big thing we want to do is pay down debt. But we’re thinking about a rebate,” Trump said at the White House, adding that it would likely include an income threshold.
Congress would have to approve any such move, and Sen. Josh Hawley (R-Mo.) introduced legislation this week that would provide $600 tariff rebates in the form of a tax credit.
“Why not reward the working people who have taken it in the shins for the last four years and give them something out of this? I think they need it, deserve it,” Hawley told HuffPost on Tuesday.
In reality, the money pouring into the U.S. Treasury is coming from American businesses and consumers, who are the ones actually paying for Trump’s tariffs. So the idea of a tariff rebate is similar to putting a Band-Aid on a wound one intentionally gave oneself.
Coincidentally, Congress is essentially doing the same thing by providing financial assistance to rural hospitals hurt by the GOP’s recent law cutting funding to Medicaid.
Other Republican senators told HuffPost the tariff revenue would be better used to pay down the national debt, as Trump had also suggested in his remarks last week. After all, that was initially one of the reasons the Trump administration gave for instituting the tariffs in the first place.
“We’re $37 trillion in debt, running a $2 trillion-a-year deficit. No, we shouldn’t be rebating,” said Sen. Ron Johnson (R-Wis.).
“That would defeat the purpose that the president may be looking at in terms of reducing the size of the deficit,” added Sen. Mike Rounds (R-S.D.). “Nonetheless, the reality is tariffs are basically a national sales tax on a lot of products that come from overseas, and it’s something that would be worth considering.”
The nonpartisan Congressional Budget Office projected that Trump’s tariffs could shave $2.8 trillion off the federal debt over the next decade, if they remain in place. However, the CBO also forecast that Trump’s tariffs would reduce the size of the U.S. economy by lowering the rate of real GDP growth, and would increase annual average inflation.
Other Republicans poked holes in another rationale Trump had given for levying tariffs: to lower U.S. trade deficits with other countries.
“Why do we need rebates if foreign nations are paying the tariffs?” Marc Short, who served as senior adviser to former Vice President Mike Pence, asked in a social media post. “And how about Congress exercises its constitutional authority and eliminates tariff tax rather than trying to be central planners redistributing $. ?”
Earlier this year, Trump also proposed a similar rebate for Americans that would be paid for with the savings generated by billionaire Elon Musk’s so-called Department of Government Efficiency. That idea didn’t go anywhere, either.
It’s not clear if GOP congressional leadership would allow a vote on legislation to give consumers tariff rebates. But some lawmakers on the left seemed at least open to the idea.
“I think we should give them to consumers,” Sen. Jeanne Shaheen (D-N.H.) said before clarifying that she needed to see Hawley’s proposal first.
Sen. Bernie Sanders (I-Vt.), who previously partnered with Hawley on COVID-19 relief checks, declined to comment, while calling the idea of tariff rebates a “complicated” question.
Most Democrats, however, criticized the Trump administration for levying tariffs in a chaotic fashion and then rushing to find a solution to the problem it had created.
“They clobber people with deeply flawed ideas after they said they care about costs, and then they got to run around and invent something to undo the damage,” Sen. Ron Wyden (D-Ore.) said.
“This is a tax across the board on ordinary people. And by the way, that tax is larger than $600,” added Sen. Raphael Warnock (D-Ga.).