GOP leaders and President Donald Trump are strategizing over how to incorporate revenue from new tariffs in their massive party-line domestic policy bill, with the goal of arguing the multi-trillion dollar legislation doesn’t add to the national debt.
Speaker Mike Johnson, Senate Majority Leader John Thune and other senior Republicans discussed the topic during their White House meeting Wednesday, according to two people familiar with the meeting. Republicans are still planning to keep the tariffs outside the final reconciliation package. But the group discussed how to score and eventually count the revenue as part of their plans for a deficit-neutral bill.
Hours after the White House meeting, Trump announced tariffs against Canada, Mexico and China would go into effect next month.
GOP leaders don’t have the votes to actually incorporate the tariffs into the massive Trump agenda bill. The politically sensitive topic would spark a messy internal GOP war between the free-trade and America First factions of the party that could derail the entire package, which is already rife with other sticky issues.
Many Republicans don’t see tariffs, which are traditionally only authorized by Congress but can be turned on and off in some circumstances by presidential fiat, as a viable spending offset. But as part of their considerations, GOP leaders are discussing how to estimate the revenue generated by Trump’s tariffs and then apply that figure to their assessment of how much the bill will cost.
Under that scenario, the Trump administration and GOP leaders would essentially just tell lawmakers how much money they expect to bring in from tariffs and count that to argue they have a deficit-neutral bill. They’re already counting on economic growth above and beyond what nonpartisan scorekeepers are estimating to make the numbers work. Some Republicans are likely to bristle at adding tariff revenue on top of that, but leaders believe they will eventually fall in line.
Speaker Mike Johnson on Thursday confirmed the topic came up in the White House meeting but said Republicans still needed to work through the strategy.
“We’re all talking about how all those will be scored, and how the new revenue will be accounted for, and all the budgeting,” Johnson said in response to a question Thursday. “But there’s still some questions out there about all of it. So they’ll be part of the equation.”
