Mnuchin, Pelosi Try to Forge Stimulus Deal With Time Running Out
Steven Mnuchin and Nancy Pelosi plan to resume discussions Thursday on a new pandemic relief package.
(Bloomberg) -- U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi plan to resume discussions Thursday on a new pandemic relief package, racing against the clock to resolve their differences on another round of coronavirus stimulus.
Mnuchin and Pelosi held their first in-person talks since August on Wednesday, yet fell short of reaching an agreement that would bridge the gaps between the administration and Democrats on further aid for the U.S. economy. Both sides face increased pressure to act as more companies announce job cuts, including airlines that had received help under earlier rounds of federal support.
“The president has instructed us to come up significantly, so we have come up from the trillion-dollar deal,” Mnuchin said on Fox Business on Wednesday evening, adding that he and White House Chief of Staff Mark Meadows had met with President President Donald Trump before they went to Capitol Hill for negotiations.
Meadows, speaking to reporters as Trump returned from a campaign trip to Minnesota said, “I think that the president made a very good and generous offer that addresses most if not all — the vast majority of issues. And yet we’re still apart on money and the priorities for that allocation. Discussions will continue”
House leaders abruptly postponed a planned Wednesday vote on a $2.2 trillion Democrat-only stimulus bill that Pelosi had described as a “proffer” in negotiations with the White House. The proposal had no chance of getting Republican support, but it would give Democrats running for re-election something to tout to voters if talks failed. Some of them had been pressing Pelosi to hold the vote.
It was put off until Thursday to give the negotiations another shot.
Mnuchin offered Pelosi a maximum of $1.6 trillion, according to people familiar with the proposal. That would include $400 a week in additional unemployment insurance, less than the $600 the Democrats want, the people said, but more than the $300 the White House put forward earlier. The package would also provide $250 billion in assistance to state and local governments, $100 billion more than a previous White House offer, but not as much as Democrats say is needed.
Details of Mnuchin’s offer were reported earlier by Roll Call.
Meadows, on Air Force One, said the Trump administration’s counterproposal was “certainly above the $1.5 trillion that has been articulated to date,” but that “if it starts with a two, there’s going to be a real problem.”
Time is running short for any chance of getting a stimulus package through the House and Senate before the Nov. 3 election. The House is set to leave on a break until the middle of November.
Mnuchin and Pelosi met for about 90 minutes Wednesday. Both said afterward they had made progress and planned to continue discussions.
“We still have more work to do,” Mnuchin told reporters, adding, “We’ve made progress in a lot of areas.”
Pelosi, in a statement, said she and Mnuchin were seeking some “further clarification” on each others’ positions and that “our conversations will continue.”
Mnuchin said on CNBC earlier Wednesday that the administration’s counteroffer to Pelosi is similar to a plan put forward by a bipartisan group of House members -- which included an escalation in spending as much as $2 trillion if the coronavirus pandemic persists.
Trump has previously indicated he could accept the bipartisan proposal from the Problem Solvers group. Trump’s firm and public support will be necessary to get any agreement with Democrats on a stimulus through the Republican-controlled Senate.
But the Problem Solvers plan had previously been rejected by Pelosi as insufficient. The Democratic proposal up for a vote is less than the $3.4 trillion bill the House passed in May, but still more than Republicans have said they could accept. Senate Majority Leader Mitch McConnell said Wednesday that it was rife with “poison pills” that have nothing to do with pandemic relief.
The House is scheduled to leave Washington at the end of this week, though members will be on call to return if there is a stimulus vote. Most senators are also likely to leave town, with the exception of a late-October vote on the nomination of Amy Coney Barrett to the U.S. Supreme Court. They also could be called back if a deal is reached.
Officials in both parties have privately questioned whether the differences could be bridged. The lack of progress in Wednesday’s talks dimmed optimism in financial markets about a stimulus deal, as stocks closed well off their highs of the session.
Although Trump and his aides have continued to express confidence that the economy is recovering, the pandemic continues to reverberate for companies and workers. Walt Disney Co. said Tuesday it’s slashing 28,000 workers in its slumping U.S. resort business. American Airlines Group Inc. said Wednesday night that it would begin furlough 19,000 employees on Thursday, while United Airlines Holdings Inc. is planning to cut about 12,000.
“The biggest concern that I have right now is that we just learned that 19,000 people on American Airlines, there’s going to be another furlough. There’s probably other airlines in the mix,” Meadows said aboard Air Force One on Wednesday night.
Weekly data due Thursday are estimated to show filings for U.S. unemployment benefits in regular state programs remain far above pre-virus levels, and Friday’s jobs report -- the last before the Nov. 3 election for the White House and Congress -- is expected to reveal that employers added roughly a half-million fewer workers in September than in August.
Private economists have increasingly abandoned predictions for a stimulus deal before the election. JPMorgan Chase & Co. and Goldman Sachs Group Inc. recently cut their forecasts for growth next quarter as a consequence.
“While there is a chance a deal could be reached in the next day or so, the odds still seem stacked against additional pre-election fiscal stimulus,” Goldman analysts including Alec Phillips wrote in a note Wednesday. “The soft deadline for a pre-election deal is tomorrow.”
Clash Over State, Local Aid
A key point of disagreement has been the Democrats’ push for large-scale aid to local and state governments. Their plan released Monday has $436 billion for one year of assistance -- less than a previous demand for $915 billion, which triggered scorn from Trump administration officials who called it a bailout for poorly run states.
The Democratic plan includes new aid for airlines, restaurants and small businesses that wasn’t in the original House package but which both sides want as part of any package. It also has more than double the amount they originally proposed for schools.
The bill would provide another round of $1,200 direct relief payments to individuals and $500 per dependent -- less than the $1,200 for dependents Democrats originally proposed.
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