Updated: Aug 13, 2020
From Erica Werner and Jeff Stein, Washington Post
A new attempt to restart economic relief negotiations between the White House and Democrats ended just minutes after it began on Wednesday, with President Trump appearing to cast doubt on the whole process by announcing a deal is “not going to happen.” Just a few days earlier, he had suggested the he was open to a new round of talks.
In declaring the whole process over, Trump used a news conference to criticize Democrats’ proposals for funding election preparations and the Postal Service as part of a broader spending measure. Those were among multiple issues that divided the parties during two weeks of negotiations that initially collapsed Friday before a failed attempt to revive them Wednesday. “The bill’s not going to happen because they don’t even want to talk about it, because we can’t give them the kind of ridiculous things that they want that have nothing to do with the China virus,” Trump said at the White House during an evening news briefing, using a term criticized as racially insensitive. His comments came hours after House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin spoke for the first time since the talks fell apart last week. But their conversation did not break the impasse, instead leading to another round of finger-pointing.
Pelosi and Senate Minority Leader Charles E. Schumer (D-N.Y.) issued a statement after Pelosi’s conversation with Mnuchin, accusing the administration of “refusing to budge.” That was followed by a statement from Mnuchin, accusing Pelosi of mischaracterizing their conversation and proclaiming that Democrats “have no interest in negotiating.” At the center of the relief negotiations was an effort to renew key parts of the $2 trillion Cares Act, which Congress passed in March. That law offered enhanced unemployment benefits to 30 million Americans, extended eviction protections, and included other provisions meant to soften the economic impact of the coronavirus pandemic. The jobless aid and eviction protections expired at the end of July. During his news conference, Trump touted executive actions he took over the weekend, which he claimed would limit evictions, extend a new form of jobless aid and defer payroll taxes, among other things. Because these measures were done by executive action and without the approval of Congress, it’s unclear how they will work.
In fact, Trump overstated how much his actions are expected to achieve, claiming, for example, that his executive action on unemployment would provide an additional $400 a week to individuals in enhanced benefits. The proposal would provide only an extra $300 weekly in federal benefits, while calling on states to chip in another $100 — or counting money states already are spending — to get to $400. The provision on unemployment insurance is intended to partially replace the $600 weekly federal benefit that was approved by Congress in March. The new money would come from funds maintained by the Federal Emergency Management Agency but could run out within weeks. Trump also repeated his claim that deferring payroll taxes would be a great benefit for Americans and that he would make the cut permanent if reelected. He insisted this would not damage the Social Security system, even though payroll taxes go to pay the Medicare and Social Security trust funds.
“We’re taking it out of the general fund,” Trump said of how he would pay for Social Security if the payroll tax cut was temporarily eliminated. Asked how that would work in light of the ballooning deficit, he replied, “We’re going to have tremendous growth.”
The deficit for this fiscal year is expected to breach $3 trillion, according to new figures issued Wednesday by the Treasury Department. That means the government will have spent $3 trillion more than it brought in through tax revenue, a dynamic that requires it to borrow more money by issuing debt. Trump also claimed the economy was rebounding tremendously, displaying some charts that purported to back this up.
“It’s coming back at a level that’s far greater than anybody anticipated,” Trump said. Congress passed four bipartisan coronavirus relief bills in March and April, pumping around $3 trillion into the economy, but Democrats and many Republicans believed additional stimulus was necessary given the fragile economy. But as they launched serious negotiations last month, the parties were far apart. Democrats backed a $3.4 trillion bill the House passed in May, while Senate Republicans eventually put forward a $1 trillion bill that even some in their own ranks opposed. A substantial group of Senate Republicans do not want to any more money. “Democrats have compromised. Repeatedly, we have made clear to the administration that we are willing to come down $1 trillion if they will come up $1 trillion,” Pelosi and Schumer said in their statement Wednesday, after Pelosi’s conversation with Mnuchin. “However, it is clear that the administration still does not grasp the magnitude of the problems that American families are facing.” In his own statement, Mnuchin disputed Democrats’ version of events but confirmed — effectively — that talks are dead. “Earlier today, Speaker Pelosi and I spoke by phone,” Mnuchin said. “Her statement is not an accurate reflection of our conversation. She made clear that she was unwilling to meet to continue negotiations unless we agreed in advance to her proposal, costing at least $2 trillion.”
He added that “The Administration is willing to move forward with legislation that allows for substantial funds for schools, child care, food, vaccines, hospitals, for small businesses, rental assistance, broadband, airports, state and local government assistance, and liability protection for universities, schools, and businesses.” He closed his statement by saying, “The Democrats have no interest in negotiating.” The two parties are not in the same ballpark on the overall cost of the bill, which Democrats have said cannot be less than $2 trillion. Republicans, including Mnuchin, have said $2 trillion is too high.
The Senate has nominally been in session this week, after Majority Leader Mitch McConnell (R-Ky.) delayed a planned August recess in hopes of voting on a coronavirus relief bill. But there are few senators in the Capitol, and no negotiations or votes have been taking place. The House is out of session.
The Senate appears likely to recess on Thursday for the remainder of the month. It looks increasingly possible that there will be no new deal on coronavirus legislation until September, when an Oct. 1 government shutdown deadline will force legislative action of some kind.
Asked Wednesday if it was possible that there would be no deal until that deadline approached, Pelosi said, “I hope not, no. People will die.”