Mark Meadows, right, listens as Steven Mnuchin speaks with members of the media after a meeting at the American Capitol in Washington, DC on August 7.
Photographer: Stefani Reynolds / Bloomberg
Photographer: Stefani Reynolds / Bloomberg
Two days after President Donald Trump moved to implement scaled-down coronavirus relief to support Congress in action, Republicans and Democrats remained deadlocked over an incentive plan and gave no indication that they were ready to return to negotiations.
Treasury Secretary Steven Mnuchin said Monday that he has spoken to “several Democrats,” but not House Speaker Nancy Pelosi or House Speaker Chuck Schumer since their last negotiating session on Friday ended without a single breakthrough.
Of the week, both sides have exchanged guilt, but no new ideas for talks have been restarted.
House Speaker Mitch McConnell accused Democrats of trying to impose political burdens on House Speaker United States of AmericaTo support a major stimulus package he said includes items without coronavirus. Schumer followed him, saying Democrats “remain ready to go back to the table,” but Republicans must “meet us halfway there.”
Mnuchin told CNBC earlier in the day that there were areas where a compromise was possible and a “fair deal” could be agreed upon. But he continued to dismiss Democrats’ call for nearly $ 1 trillion in support of state and local governments as “absurd.”
Chuck Schumer listens as Nancy Pelosi speaks at a meeting at the American Capitol in Washington, DC on August 7.
Photographer: Stefani Reynolds / Bloomberg
Schumer said he hopes Mnuchin and White House Chief of Staff Mark Meadows will have enough pressure on her party to return to talks that broke out last week, with lawmakers in the House of Representatives and House leaving Washington with plans to return only when a deal is reached.
Read more: Trump lowers unemployment rates for states with fiscal calamity
Republicans and Democrats began spending more than $ 2 trillion separately on general spending and on a number of key issues – including how much to transfer to state and local governments, how to protect virus prosecutions for businesses that reopen and how to expand from additional unemployment benefits to weekly payments of $ 600 stopped last month.
Democrats said they offered to reduce their $ 3.5 trillion proposal by $ 1 trillion if Republicans increase the $ 1 trillion plan by a similar amount and were repealed.
“We will not just divide the difference,” Mnuchin told CNBC.
The imposition on the size of the measure sets the potential for weeks more posturing and negotiations that despite record high unemployment levels may not deliver real progress. Lawmakers also have a Sept. 30 due date for the annual federal budget – setting a hard deadline to agree on a wide range of spending or the risk of a partial closure of government weeks before the election.
Unilateral action
Trump took action to separate money for disaster relief to leave a temporary bump in unemployment benefits for unemployed Americans up to as much as $ 400 a week, deferred payment payments and payments on federal student loans, as well as potential eviction protection.
Read more: Trump Jobless Aid Plan does not require additional state funds, says Agency
Questions remained about the implementation of some of the steps, including the benefits for unemployment insurance. New York Governor Andrew Cuomo said a requirement for states to have a quarter of the burden is irresponsible and unworkable. “States have spent a lot of money dealing with Covid,” he said. “They have serious financial problems.”
Democrats and some Republicans – including Sen. Ben Sasse of Nebraska – said Trump’s actions were unconstitutional. However, Pelosi and Schumer have not said whether they will challenge themselves in court. White House press secretary Kayleigh McEnany said the administration still wants funding for schools and direct payments to Americans – items not included in the executive orders.
The National Governors Association called on Congress to provide “$ 500 billion in unrestricted state aid,” Cuomo, a Democrat who leads the group, and Arkansas Republican Vice President Asa Hutchinson said in a joint statement Monday.
United Democrats
While Republicans are divided over the stimulus, Democrats have drawn a united front.
So far, Pelosi has not opposed calls from Democrats for re-election campaigns in swing districts to cut a quick deal. New Jersey Rep. Tom Malinowski was the lone Democrat who said in a Saturday call that failure could hurt vulnerable members in the November election, according to a person familiar with the matter.
But Malinowksi on Monday said he did not question Pelosi’s strategy. “I have made it clear to leadership that I want them to fight as hard as possible for the best possible agreement. We need an agreement, ‘he said.
Meanwhile, estimates of the impact of Trump’s executive orders have differed, with Goldman Sachs Group Inc. which accounted for “about $ 200 billion” in fiscal relief, and JPMorgan Chase & Co. at “less than $ 100 billion” in incentives. JPMorgan economist Michael Feroli said in a note Monday “we continue to believe Congress will get a deal.” Goldman analysts, including Alec Phillips, stressed that legislation “will still be necessary.”
Growth Threat
Failure to make a deal would trigger a wave of downgrades of growth on Wall Street, which has largely baked into a deal above $ 1 trillion. Financial markets initially did not show much concern, with the S&P 500 index closing down 0.3% on Monday.
“All policy instruments” will be needed to support the U.S. economic recovery, the executive board of the International Monetary Fund said in a statement Monday after an annual consultation with U.S. authorities. “An extra large fiscal package would be needed to strengthen health preparedness and increase demand sufficiently, including through increased federal transfers to state and local governments.”
(Updates with Mnuchin comments in second paragraph)
.
