Kudlow says Trump isn't 'bluffing' and will move ahead without Congress if relief deal isn't reached

"People should not believe the president is bluffing on using his executive authority. He is not bluffing," Kudlow said in an interview on Fox Business. "And since we can't seem to get a deal done with the other team right now, he will take his executive authority to the fullest."

Kudlow spoke the morning after talks between Trump administration officials and top congressional Democrats essentially collapsed at the Capitol, with each side pointing to seemingly irreconcilable differences in the size and scope of the deal they were trying to strike.

The status of talks was unclear on Friday. House Speaker Nancy Pelosi, D-Calif., said Democrats were calling on the White House to resume negotiations but haven't received a response yet.

"We haven't overplayed our hand," Pelosi said. "We aren't overplaying our hand when we are factually presenting what the needs are."

One major sticking point has been a call by Democrats for $1 trillion in aid to cities and states, which have seen their budgets hammered by the downturn. The White House has called this a "bailout" for poorly run local governments and opposed such a big figure.

A positive jobs report Friday morning appeared to harden the administration's posture against further engagement with the Democrats, with Kudlow pointing to the 1.8 million jobs added in July as evidence of a "self-sustaining recovery."

With millions still unemployed, however, Pelosi and Senate Minority Leader Chuck Schumer, D-N.Y., said the jobs report shows the economy losing steam and the need for more investment. More than 30 million Americans are receiving unemployment benefits, and additional aid expired two weeks ago.

"Millions of Americans are still hurting and yet, despite this reality, President Trump and Republicans appear ready to walk away from the negotiating table to do unworkable, weak and narrow executive orders that barely scratch the surface of what is needed to defeat the virus and help struggling Americans," Pelosi and Schumer said in a statement.

Trump and White House officials have been eyeing the possibility of unilateral action all week, and Kudlow confirmed Friday that they were looking at "repurposing" hundreds of billions of dollars that have not yet been spent from earlier coronavirus relief legislation passed this spring.

The legality of such a move is questionable, with Democrats insisting the White House can't spend money without Congress' approval. But Trump has pushed the boundaries of executive authority in the past, including his move to declare a national emergency at the U.S.-Mexico border so he could raid Pentagon funds to build his wall.

It's unclear to what degree Trump could move on his own to restore emergency unemployment benefits that were authorized by Congress in March and then expired at the end of July. Kudlow said the executive actions under consideration include moves to "reform unemployment" by providing a benefit for re-employment and a retention tax credit for employers.

He said Trump also intends to extend a lapsed moratorium on evictions, a move Democrats have encouraged even while saying it has little value without funding for rental assistance attached. The moratorium, which expired last months, covers renters who live in homes with federally backed mortgages, which the Urban Institute estimates to be 12.3 million households.

Cutting the payroll tax, which comes out of workers' salaries and goes to fund Medicare and Social Security, has been a longstanding goal for Trump. Lawmakers in both parties question the value of such a move, partly because it would do little to help workers who are not actually employed. In recent days, White House officials have not been clear as to whether Trump believes he has the power to unilaterally defer the tax or actually cut it.

White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin have had multiple meetings over the past two weeks with Schumer and Pelosi, only to come up empty-handed on a deal. Their meeting Thursday night last more than three hours but ended in finger-pointing.

Democrats have been pushing for a wide-ranging $3.4 trillion bill the House passed in May, which extended the enhanced $600 weekly unemployment benefits through January, among many other provisions. Republicans were reluctant to spend more than $1 trillion after already signing off on about $3 trillion in stimulus for the economy and support for the health care system this spring -- an unprecedented sum.

Progress was made on some issues, but the two sides remained far apart on some key questions, including aid to state and local governments. Democrats wanted close to $1 trillion for states and localities but the administration was unwilling to support more than a fraction of that sum.

In their statement Friday, Schumer and Pelosi called on White House negotiators to return to the table, while insisting, "We will not go along with the meager legislative proposals that fail to address the gravity of the health and economic situation our country faces."