Monday, September 28, 2020

Stimulus talks near brink of collapse after rancorous meeting

Aug 07. 2020
House Speaker Nancy Pelosi, D-Calif., speaks while Senate Minority Leader Chuck Schumer, D-N..Y., listens during a news conference on Capitol Hill in Washington on Aug. 6, 2020. MUST CREDIT: Bloomberg photo by Sarah Silbiger.
Location: Washington, United States
House Speaker Nancy Pelosi, D-Calif., speaks while Senate Minority Leader Chuck Schumer, D-N..Y., listens during a news conference on Capitol Hill in Washington on Aug. 6, 2020. MUST CREDIT: Bloomberg photo by Sarah Silbiger. Location: Washington, United States
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By Syndication The Washington Post, Bloomberg · Erik Wasson, Steven T. Dennis, Laura Litvan 

Negotiations on a new coronavirus relief bill edged toward the brink of collapse after a meeting Thursday between White House officials and top congressional Democrats ended with each side accusing the other of being unwilling to compromise and the biggest issues far from resolved.

The four negotiators, House Speaker Nancy Pelosi, Senate Democratic leader Chuck Schumer, White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin, emerged from a more than three-hour meeting with little to show and with no guarantee they would resume talks on Friday.

Mnuchin and Meadows said that while talks made progress on a few areas of possible compromise, there still are disagreements on the topline numbers for a stimulus bill and on the biggest individual provisions, including aid to state and local governments that Democrats want.

"The differences are still significant," Meadows said.

Pelosi said Republicans are not facing up to the gravity of the economic calamity confronting the U.S. Schumer said the meeting was "disappointing" because the White House wasn't willing to meet them in the middle.

"We are very far apart," Pelosi said. "It's most unfortunate."

The talks began under the pressure of expectations from financial markets and the threat from President Donald Trump that he'll act unilaterally to restore some of the stimulus measures that ran out during a stalemate in Congress.

Meadows and Mnuchin said they will consult with Trump and call Pelosi and Schumer Friday to determine if it makes sense to meet. Schumer made clear Democrats are willing to keep talking.

A bigger-than-expected gain in American jobs in July, shown in a government release Friday morning, may influence the direction of any further talks. While high-frequency data have indicated a slowdown in economic activity in recent weeks, the report showed a 1.76 million jump in payrolls, 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.

In the meantime, the $600 a week supplemental unemployment insurance payment from the last stimulus has run out for millions of jobless Americans and remains one of the biggest sticking points in the talks. Republicans want to cut the benefit, while Democrats are demanding it be extended. Other provisions of the March stimulus also have run dry or are about to.

Wall Street is hoping for a deal. U.S. stocks climbed Thursday on optimism that the two sides will come to terms on a stimulus deal. But any hint that negotiators won't be able to resolve differences over a new U.S. relief package will spark jitters."Anything that we can do to continue to provide a bridge to people as we get through this crisis is going to be really important," said Chuck Cumello, president and chief executive officer of Essex Financial Services. "The U.S. consumer is driving two-thirds of the economy."

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."

Democrats have proposed a $3.5 trillion dollar package that passed the House in May, while Republicans countered last week with a $1 trillion proposal.

Aid for state and local governments was a major source of the antagonism Thursday night.

Mnuchin said Trump won't agree to a "bailout" of state and local governments with existing budget difficulties, though he is open to some aid related to Covid-19 and to help firefighters and police. Democrats are demanding nearly $1 trillion in aid and warn of massive public sector layoffs in revenue starved areas.

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. Majority Leader Mitch 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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