Republicans Throw a Wet Blanket on Trump’s $2,000 Tariff Refund Checks

Reuters
By Michael Rainey

Good evening. The Senate officially sent a bill to the White House today that requires the Justice Department to release more information about the late convicted sex offender Jeffrey Epstein. President Trump has vowed to sign the legislation, but the timing is unclear, and his signature does not guarantee the release of all the relevant files.

After meeting with Saudi Arabia's Crown Prince Mohammed bin Salman yesterday, Trump today spoke at a Saudi-U.S. investment summit, where he defended his support for providing visas to skilled foreign workers.

Also on Wednesday, the Bureau of Labor Statistics announced that it will not publish an employment report for October, which means no monthly unemployment rate will be calculated for the first time in 77 years.

Here's what's happening on the fiscal front.

Republicans Throw a Wet Blanket on Trump's $2,000 Tariff Refund Checks

Some Republicans in Congress are expressing doubts about President Donald Trump's proposal to send $2,000 checks to most Americans from the revenues generated by his new tariffs on trading partners around the world.

The checks, which Trump said could arrive next summer, could give Republicans a big boost in the elections next year, but some lawmakers are worried about the effect on the deficit and the debt, as well as the risk of inflation when millions of beneficiaries start spending their payments.

Senate Majority Leader John Thune said this week that he would like to see tariff revenues be used to reduce the $38 trillion national debt. "I've ... heard suggestions that they would apply any tariff revenue to debt repayment, which I think is a really good idea," Thune said. "The amount of revenue coming in from the tariffs is considered to be substantial at this point and hopefully can be put to a useful purpose, in my view one of which would be repaying the debt."

Sen. James Lankford agreed. "Any income that's coming in from anywhere is reducing the deficit at this point," he said. "Whatever dividend that would be paid ... would still add to our debt."

Sen. Rand Paul called the checks a "crazy idea," since the government is still running a budget deficit, even with the bump in tariff revenues. "It has to be borrowed from China," he said this week. "Maybe we should call them and ask them if they'll send the checks directly from China."

In the House, Reps. Vern Buchanan and David Schweikert also cited the deficit as a prime concern. "I can't make that math work," Schweikert said.

House Speaker Mike Johnson noted that the details of the plan are hazy at best, making it hard to evaluate. "I'm not sure what's being proposed," he said. "It's sort of a hypothetical."

Some conservative policy mavens have their doubts, as well. "Sending out checks to people is a bad way to stimulate the economy," Stephen Moore, a former Trump economic adviser, told CNN. "If there is tariff revenue, that should be used to cut income taxes across the board. Stimulus checks only stimulate inflation."

Asked about the possibility that refund checks could boost inflation, Treasury Secretary Scott Bessent offered an unusual solution to the potential problem. "Maybe we could persuade Americans to save" the money rather than spending it, he suggested to Fox News.

Quotes of the Day

"By giving the patient the money herself ... she becomes a wiser consumer. And just think about it, if she goes and gets two types of shampoo and one is a dollar cheaper, she'll get the cheaper one and the other one lowers their price. Once you give her the power of the purse, of making the decision, she's gonna shop, get the lower price. That begins to save her money and squeezes waste out of the healthcare system. That ultimately translates into lower premiums."

  • Republican Sen. Bill Cassidy speaking about his proposal to provide Americans with direct payments from the federal government to help restrain the rising cost of healthcare.

Facing a huge increase in prices in January for millions of people who get their insurance under the Affordable Care Act, Republicans are looking for an alternative to providing another year of enhanced subsidies. Cassidy is pitching a plan aligned with President Trump that would give some Americans health savings accounts instead of subsidies, under the assumption that direct payments to consumers would spark competition and bring prices down. Healthcare experts have their doubts about the efficacy of such a system, and so far, Democrats have shown no interest in pursuing the proposal.

"In the last several weeks, Republicans expressed a sudden willingness to take on big insurance. ... As we start this discussion, put me down as a bit skeptical."

  • Democratic Sen. Ron Wyden, speaking at a hearing on health care affordability Wednesday.

Wyden said the plans being discussed by Republicans amount to little more than a recipe for "junk insurance" that does little to protect people against massive bills when things go wrong. He also blamed Republicans for refusing to address the issue until now.

"Instead of working to avoid these devastating premium increases for Americans," Wyden said, "Republicans devoted months to jamming through massive tax breaks for billionaires, and at the same time, cut more than $1 trillion from the health care system that will result in 15 million people losing their coverage, hospital closures and higher costs for all."

US Trade Deficit Drops 24%

The U.S. trade deficit tumbled 24% in August as imports fell significantly in the wake of higher tariffs imposed by President Donald Trump.

In a report that was delayed by more than a month due to the government shutdown, the Commerce Department said exports of goods and services rose slightly by 0.1% in August, but imports saw a much larger decrease of 5.1%.

In dollar terms, the gap between imports and exports fell from $78.2 billion in July to $59.6 billion in August.

Pulling back for a longer view, the trade data show considerable bumpiness since the start of the year, reflecting Trump's on-again, off-again tariff hikes. Imports surged in the spring to get ahead of the new tariffs and are now falling back as tariffs make imports more expensive.

Overall, the trade deficit in 2025 is larger than it was a year ago. The deficit from January to August comes in at $713.6 billion, up 25% from the $571.1 billion deficit recorded in the same time period in 2024.

The report noted that the release date for the next batch of monthly data is uncertain due to the lingering effects of the shutdown: "Report delayed due to recent lapse in federal funding."

Fiscal News Roundup

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