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Donald Trump sowed confusion over the stimulus talks on Tuesday, breaking up negotiations with Congressional Democrats on a new US aid package before changing course and trying to get lawmakers back to the discussions.
The conflicting messages from the president of the United States, delivered in a series of tweets, came a day after he returned to the White House after three days in the hospital where he was treated for coronavirus.
Trump had triggered a sell-off in US equity markets Tuesday afternoon when he called for an end to negotiations on additional stimulus until after the November 3 presidential election.
The move would leave many American homes and businesses, from restaurants to airlines to hotels, facing greater financial difficulties in the coming weeks. Jay Powell, Chairman of the Federal Reserve, and economists have warned that a lack of government support could jeopardize America’s recovery from the pandemic. A wide range of business groups have also resisted the president’s decision.
But on Tuesday night, Trump appeared to have backtracked after abandoning negotiations entirely. The president separately called for lawmakers to approve additional funding for airlines to avoid thousands of job cuts, more help to small businesses and direct government payments worth up to $ 1,200 for most people.
“If they send me an individual invoice for stimulus checks ($ 1,200), it will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening to Nancy? wrote in one cheep, referring to Nancy Pelosi, the Democratic speaker of the House of Representatives.
The S&P 500 Index closed down 1.4 percent Tuesday, after trading higher. Treasury yields fell as investors sought the relative safety of government debt.
Asian equity markets regained some ground after Trump’s reversal. Japan’s Topix was down 0.1 percent Wednesday afternoon and Hong Kong’s Hang Seng Index added 0.6 percent.
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Pelosi and Steven Mnuchin, the Treasury secretary, have tried to narrow the differences into a larger package, but failed to reach an agreement. Democrats have been pushing for $ 2.2 trillion in new spending, while the Trump administration has been willing to go up to $ 1.6 trillion, and many Republican lawmakers on Capitol Hill say even that was excessive.
Trump had asked Republicans to leave the negotiations after a call with senior administration officials and Republican members of Congress to discuss the talks.
The president said the biggest stumbling block in the negotiations was the Democratic demand for aid to cash-strapped state and local governments, without which they will have to push through aggressive budget cuts.
“I reject your request and look to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major stimulus bill that focuses on working Americans and small businesses, “Trump said in a statement. . cheep.
Trump’s subsequent statement that he was still interested in passing more federal aid in a piecemeal fashion is unlikely to be greeted with enthusiasm among Democrats, who have long pushed for a comprehensive package. But it may leave a small shred of hope that Trump can still commit.
The prospect of an end to talks on additional fiscal stimulus came just hours after Powell warned that “too little” fiscal support could create “unnecessary hardship” across the economy.
“The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work together to support the economy until it is clearly out of the woods,” Powell told the National Association for Business Economics, adding that It would be “tragic” if it exacerbated “existing disparities” in the US economy.
Congress and the White House agreed to $ 3 trillion of stimulus for the economy early in the pandemic, but negotiations on a second round of support have been much more difficult.
Democrats passed a House bill in May to inject another $ 3 trillion in fiscal support into the economy, but Republicans quickly rebuffed it as excessive. In recent months, Republican leaders tried to push for smaller packages of stimulus measures, but they also failed to garner enough support on Capitol Hill.
While some Trump administration officials, such as Mnuchin, continued to argue that a deal was needed, others, including Mark Meadows, the chief of staff, have been reluctant to move in the direction of the Democrats.
“Today, once again, President Trump showed his true colors: putting himself first at the expense of the country, with the full complicity of the Republican members of Congress,” Pelosi said in a statement after Trump’s tweets.
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