No deal after Pelosi, Mnuchin meet on economic relief, but talks will continue

Democrats pulled back plans to vote on their $2.2 trillion stimulus bill, which is opposed by House and Senate Republicans and has no chance of becoming law. Democratic leaders delayed that vote to allow more time for a bipartisan deal to emerge.

It remained uncertain whether a deal could be reached. Senate Majority Leader Mitch McConnell (R-Ky.) said the sides were “very, very far apart,” leaving it unclear whether any agreement struck by Pelosi and Mnuchin could pass muster with Senate Republicans.

But after weeks in which talks had stalled completely, Wednesday’s developments offered a glimmer of hope that Congress and the administration might come together after all to agree on new economic relief ahead of the election.

Mnuchin told reporters before leaving the Capitol: “We made a lot of progress over the last few days. We still don’t have an agreement, but we have more work to do. And we’re going to see where we end up.” Speaking on Fox Business Wednesday evening, Mnuchin said Trump had instructed his negotiators “to come up significantly” from the White House’s initial $1 trillion stimulus ask. He said that he would be speaking to Pelosi again on Wednesday evening but that meaningful progress would probably not be made until Thursday.

“It’s the first time we’ve seriously re-engaged in what has been several weeks,” Mnuchin said. “The president would like to do a deal.”

The early-afternoon meeting in Pelosi’s office at the Capitol was the first in-person discussion between the House speaker and the treasury secretary since bipartisan talks collapsed in early August.

It came with the House days away from adjourning through the election and with the two sides still at odds on key issues including aid to cities and states, liability protections for businesses and the overall cost of the bill.

Mnuchin described the counteroffer he was delivering to Pelosi as similar to an approximately $1.5 trillion proposal developed by the bipartisan Problem Solvers Caucus in the House earlier this month. That proposal included provisions allowing the price tag to increase to around $2 trillion based on the progression of the coronavirus, which would bring the two sides close in terms of overall spending levels.

Senate Republicans, however, have balked at spending more than $1 trillion. McConnell, who struggled to get his conference united behind a bill containing only around $300 billion in new spending several weeks ago, said it was “outlandish” to think Senate Republicans would agree to anywhere near the $2.2 trillion Democrats want to spend.

Nevertheless, if no deal is reached, House Democratic leaders still intend to push forward this week with a vote on their new bill, which is a slimmed-down version of the $3.4 trillion Heroes Act the House passed in May.

It includes new stimulus checks, unemployment insurance, state and local aid, and money for schools, the U.S. Postal Service, election security and more. It also includes payroll assistance for airlines that are facing the prospect of widespread furloughs as soon as Thursday unless a new aid package is passed.

Pelosi has been under pressure from moderates in her caucus, including some in tough reelection fights, to take new action to address the continued economic and public health damage from the coronavirus.

House Majority Leader Steny H. Hoyer (D-Md.) has been among those pushing for the chamber to vote on a new bill, since it has been months since House Democrats pushed through the Heroes Act, which the White House and Senate Republicans ignored. Hoyer said that he hoped Pelosi and Mnuchin could reach agreement but that either way, the House should vote, allowing members to return home to campaign for reelection able to show that at least they tried.

“We’re going to do the best we can, and we’re going to make sure the position of our party is known to the American people in terms of trying to help them at this time of great crisis,” Hoyer told reporters on a conference call.

Pelosi has shown little sign she is willing to back down from her $2.2 trillion price tag, with Democrats contending they have already compromised. On a private call with House Democrats on Wednesday morning, Pelosi said the American people are worth the $2.2 trillion, according to two people on the call who spoke on the condition of anonymity to describe the private discussion.

She also said that state and local aid and legal liability protections continue to be obstacles to a deal. Republicans and the Trump administration favor liability protections Democrats oppose, while opposing the generous state and local aid Democrats want. The Democrats’ new bill has about $500 billion for state and local governments, about half as much as the original Heroes Act.

The negotiations on state and local aid center on three pots of money: education aid, which Republicans can support; general money for revenue shortfalls, which many Republicans oppose; and funding to increase the federal share of state Medicaid spending, which Democrats are demanding but is a tough sell for the GOP, according to a person with knowledge of the talks who spoke on condition of anonymity to describe them.

Congress passed four bills totaling an unprecedented $3 trillion in aid in the spring, but since then the bipartisan urgency that existed at the beginning of the pandemic has dissipated and the Senate has not passed a related bill. Talks involving Mnuchin and Pelosi collapsed in August and were renewed only a few days ago.

Millions remain unemployed and deaths from the coronavirus continue to mount, but the Trump administration continues to sound bullish about the economy.

“The economy is doing much better than anyone expected,” Mnuchin said Wednesday. “You’ve seen a very good rebound, and you’re going to see a very good quarter,” he said, while contending that “more fiscal response will help the economy.”

Stephen Moore, an outside economic adviser to the White House, said he told President Trump at a meeting at the White House about 10 days ago that a stimulus deal would do little to boost the president’s electoral prospects. Moore said he told the president the benefits of any stimulus deal reached now would not boost the economy until 2021 or December at the earliest.

“I told him, ‘Mr. President, there’s no deal you can get that will help the economy before the election,’” Moore said.

Still, depending on the timing of a new deal, it is conceivable that Trump’s administration could still send out millions of stimulus checks before the election. The IRS sent payments to as many as 80 million households within two weeks after the passage of the Cares Act in March.

Separately Wednesday, the Senate voted 84 to 10 to approve a stopgap spending bill to avert a government shutdown at midnight, when the 2020 fiscal year ended and agency funding expires. The legislation extends government funding through Dec. 11. The House already passed the bill, so the Senate’s action sent it to Trump, who signed it into law early Thursday after returning from a campaign rally in Minnesota.

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