Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi met again today after making some glacial progress in agreeing to another round of economic stimulus.
Democrats have come down from a $3 trillion bill passed in the House over the summer to $2.2 trillion that’s currently on the table. Pelosi stopped a vote on that measure when talks with the administration resumed.
Mnuchin told Fox Business News that both sides had agreed to include another round of individual payments to taxpayers. That would mean another $1200 check to most taxpayers. Mnuchin hedges on the amount because Republicans may wish to fiddle with the income requirements.
In the CARES Act, the $1200 checks were sent to taxpayers making less than $75,000 a year, with a ceiling of $150,000 for couples. There was also a $500 payment for each child. The benefit phased out for taxpayers making over $99,000 a year. Senate Republicans may want to lower the income threshold of those getting the largest amount, although that won’t fly with most Democrats.
The Republicans have raised their offer to $1.5 trillion.
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.
Again, as in past negotiations, the big sticking point appears to be aid to state and local governments. Democrats insist on giving their fellow Democratic governors a trillion dollars to bail them out of trouble they got into long before the coronavirus pandemic hit. Republicans and Trump are refusing, and want a bill to assist states and local government in dealing with the budget shortfalls caused by revenue losses during the pandemic only. And they don’t want the money included in the stimulus bill. They want a separate, stand-alone bill to vote on.
The White House plan, offered Wednesday, gave ground with a $250 billion proposal on funding for state and local governments and backed $20 billion in help for the struggling airline industry. Both areas are of great interest to Democrats’ union backers.
But Pelosi wasn’t taking the bait.
Pelosi responded Thursday, saying the administration is still far short on aid to state and local governments. And she said she won’t agree to take half a loaf now.
“Some of you have asked, ‘Isn’t something better than nothing?’ No,” Pelosi told reporters, citing the “opportunity cost” for provisions sought by Democrats but potentially lost in any rush to agreement.
When you’re talking trillions of dollars, $600 billion doesn’t seem like a huge obstacle to overcome. Indeed, the history of these negotiations is full of staunch positions melting away as deadlines approach. But the election throws everything into the air. Congress is going to break to resume campaigning in a few days. It would be surprising if the two sides could close the gap before then.