After two months of inaction on another multi-trillion-dollar pandemic relief bill, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have agreed to restart the stalled talks in an attempt to get something done before Congress breaks for the election next week.
The differences this time around are the sense of urgency by both sides and, most importantly, Donald Trump’s reluctant support for a bigger bill than the $1.3 trillion bill the GOP Senate proposed in late summer.
Trump tweeted support for the bipartisan deal offered by House members last week, but it was immediately rejected by the leadership of both parties. That bill, proposed by the Problem Solvers Caucus, was worth $1.5 trillion and would have included stimulus checks to individuals, extended unemployment benefits, and, significantly, aid to states whose budgets have been blown up by the coronavirus pandemic.
It appears that Pelosi is willing to accept less than the $3.3 trillion bill the House passed in May and Trump is willing to take more than the $1.5 trillion offered by the Problem Solvers Caucus. Therein lie the seeds of a deal.
The party aims to restart stimulus negotiations with the White House after talks fell apart last month. House Speaker Nancy Pelosi has repeatedly pushed Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows to boost the administration’s roughly $1.3 trillion offer by another trillion dollars.
Pelosi directed Democratic committee chairs to draft legislation, according to Politico, which first reported on plans to craft another bill. The House could vote on a bill as soon as next week, but Democrats have not yet decided on a plan, the outlet reported.
Democrats and Republicans have failed to come to agreement on more aid to combat the health and economic damage from the crisis, even after a $600 per week supplemental unemployment benefit, a federal moratorium on evictions and window to apply for PPP loans lapsed. Hopes for more legislation dwindled in recent weeks as Republicans grew wary of spending and election-year politics infiltrated the process.
The Democrats are still proposing half a trillion dollars to states and local governments to fill gaps in their budgets because of lost revenue. That puts the ball squarely in the court of Trump who, so far, has resisted the idea of including the aid to states in a pandemic relief bill. Trump wants the aid in a separate bill, and he wants a lot less than the trillion-dollar price tag Democrats planned for in the HEROES Act.
Trump’s complaint is that Democratic governors who have gotten their states in fiscal trouble — including failing public pension systems — want Washington to bail them out, even though those problems predate the coronavirus outbreak. It’s another example of Democrats not letting a crisis go to waste and Trump isn’t buying it.
Another reason Congress and the president may be moving closer toward a relief bill is that the economy is clearly slowing.
The discussions about a relief proposal come as concerns grow about the potential for the U.S. economic recovery, boosted by the trillions in relief Congress has passed this year, to falter. Federal Reserve Chair Jerome Powell, among other economic experts, has warned the economy could take a hit without more fiscal stimulus.
The psychological lift to stocks a stimulus bill would give, as well as the resumption of extended unemployment benefits and another stimulus check to individuals, just might shock the economy out of the doldrums.
The House is expected to take up a smaller $2.4 trillion pandemic relief bill next week. The two sides are getting closer — a trillion dollars apart now compared to $2 trillion early this summer — but there’s still a long way to go.
The bottom line is that if Trump wants a bill, it will happen sooner rather than later.