Mnuchin Says Trump to Take Executive Action After Talks Stall

(Bloomberg) -- Treasury Secretary Steven Mnuchin said he’ll recommend President Donald Trump move ahead with executive action on unemployment aid, evictions and student loans after another round of negotiations with Democrats on a virus relief plan ended without any agreement.

“The president would like to make a deal. Unfortunately, we did not make any progress today,” Mnuchin said after leaving a meeting Friday with House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer.

Because talks are at a standstill, Mnuchin said the president should follow through with plan to restore a few of the provisions of the last stimulus bill that have expired.

Trump said Thursday he is considering acting to extend enhanced unemployment benefits, restore a moratorium on evictions and forbearance on student loans and suspend payroll-tax collections if Republicans and Democrats can’t come to terms on a new stimulus bill. White House Chief of Staff Mark Meadows said Trump was likely to take action “over the weekend.”

“This is not a perfect answer -- we’ll be the first ones to say that,” Meadows said. “But it is all that we can do, and all the president can do, within the confines of his executive power.”

Unemployment Aid

Two people familiar with the matter said Trump would extend the supplemental unemployment insurance at a $400-per-week level, a reduction from the $600 in the last stimulus bill. It wasn’t clear what mechanism he would use to fund the extension or how long it would be in place.

Mnuchin and Meadows again rejected an offer from Pelosi to roughly split the difference in the price tags of the Democratic and Republican coronavirus relief plans. Heading into Friday’s meeting, Mnuchin called the idea “a non-starter.”

Pelosi and Schumer said Mnuchin and Meadows wouldn’t budge during the discussion. Schumer characterized the meeting as “disappointing.”

“I told them to come back when they are ready to give us a higher number,” Pelosi said.

The lack of any agreement leaves the negotiations on the brink of collapse. It was unclear whether there will be additional discussions, though Mnuchin said the administration wasn’t abandoning the talks.

Pelosi and Schumer said they again offered to cut $1 trillion from the Democrats’ $3.5 trillion proposal if Republicans would raise the top-line number of their plan by $1 trillion.

“We are willing to make compromises,” Schumer said at a news conference before going into the Friday session. “The speaker made a very fair offer.”

Mnuchin said that the White House has demanded concessions from Democrats on unemployment insurance and aid to state and local governments. That will be key to any further talks, he said. The state aid has been a particular sticking point with Trump, which he emphasized in a tweet Friday after the talks broke up.

Pelosi said Friday Democrats still demand $915 billion while Republicans are only offering $150 billion. Mnuchin said remains to some aid related to Covid-19 and to help firefighters and police.

There also are differences on the Democrats’ demand to extend the $600 a week supplemental unemployment bonus that has expired, and Senate Majority Leader Mitch McConnell’s insistence on a temporary liability shield for companies, schools and other organizations.

One of the biggest hurdles is disagreement on the overall size of the package. Schumer said a majority of Democrats won’t vote for a package of less than $2 trillion. The party controls the House and their votes would be needed to get any legislation through the Republican-led Senate, given internal GOP divisions.

Senate Republicans wouldn’t be able to back any deal of $2 trillion or more, given that as much as $1 trillion of the March stimulus package remains unspent, according to a GOP aide in that chamber. Schumer pointed out that some of Republican senators would be unlikely to support a bill regardless of size.

Friday’s talks took place after Labor Department reported a 1.76 million jump in payrolls in July, beating most estimates. The unemployment rate fell to 10.2%, though that’s still higher than at the peak of the Great Recession in 2009. And higher-frequency data are turning more negative, as businesses use up the last of their federal loans and reduced jobless benefits pressure consumer spending.

Read More: Employment in U.S. Increased by More Than Forecast in July

Both parties continued to send brickbats each other’s way all week, and that continued Thursday night with both sides assigning blame for the failure to make progress.

“They were unwilling to meet in the middle, they said it mostly has to be their way and they admitted that,” said Schumer.

Meadows said Trump may go through with taking executive action after “coming to the realization that perhaps some of our Democrats both in the House and Senate are not serious about compromise and are not serious about trying to meet the needs of the American people.”

The rest of Congress is in a period of suspended animation waiting for a resolution. Senators jetted home Thursday afternoon, joining House members who departed Washington last week.

McConnell is leaving the negotiating to the White House and Democrats, who control the House. He said senators would subject to recall for any votes.

House leaders have also said members would return with 24 hours notice once there’s a deal to vote on.

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