Pelosi, Mnuchin cite progress in economic relief talks but eye obstacles with Senate Republicans

Source: By Erica Werner and Jeff Stein, Washington Post • Posted: Friday, October 16, 2020

During a nearly 90-minute call, the two negotiators said they continued to exchange proposals on stimulus, virus testing

Treasury Secretary Steven Mnuchin speaks during a television interview at the White House on Oct. 14.

House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin cited progress Thursday in their ongoing coronavirus-relief negotiations less than three weeks before the November elections, though the Democratic leader raised concerns about whether any big spending package could pass Congress given fierce resistance in the GOP-controlled Senate.

Pelosi and Mnuchin have been discussing a new spending deal between $1.8 trillion and $2.2 trillion, although President Trump has said he would support even more.

The rapidly developing changes came late Thursday after a nearly 90-minute conversation between the two negotiators. They both cited progress in resolving one of Pelosi’s top demands, for a national strategic testing plan to better detect the coronavirus. Mnuchin told her that the White House would accept the Democrats’ proposal with some “minor” modifications, according to Pelosi’s spokesman — confirming comments Mnuchin himself had made earlier in the day.

However, opposition from Senate Republicans emerged Thursday as a formidable obstacle to any deal passing Congress before Election Day.

Majority Leader Mitch McConnell (R-Ky.) and Senate Republicans had already made known their discomfort with any big new spending plan. McConnell next week plans to put a roughly $500 billion package on the Senate floor, close to a quarter the size of the package Mnuchin and Pelosi are working on. The Senate GOP leader spent much of Thursday doubling down on his opposition, publicly denouncing the White House deal taking shape and swatting away Trump’s directive to “Go big or go home!!!”

“He is willing to go higher than my members are,” McConnell said of Trump while speaking at a medical center in Princeton, Ky., Thursday afternoon. McConnell said he didn’t think Pelosi and Mnuchin would reach a deal, anyway. And at an earlier event the majority leader all but ruled out a vote on a large-scale relief bill.

“You’re correct we’re in discussions with the secretary of the Treasury and the speaker about a higher amount,” McConnell told a reporter. “That’s not what I’m going to put on the floor.”

The drastically divergent views come as the economy is showing new signs of strain and the coronavirus is beginning to spread rapidly again through numerous corners of the United States. Pelosi raised the issue of McConnell’s opposition in her call with Mnuchin, according to her spokesman, Drew Hammill. “The Secretary indicated that the President would weigh in with Leader McConnell should an agreement be reached,” Hammill wrote on Twitter.

However Trump’s erratic approach to the negotiations makes it uncertain whether he can or would exert the necessary political pressure to move Senate Republicans to take a vote many of them do not want to take, especially at a moment when the president is down in polls and some Republicans have begun to distance themselves from him.

On Thursday, for example, Trump called for even more stimulus spending than the $1.8 trillion Mnuchin has offered Pelosi — but at a rally later in North Carolina he never raised the issue, despite speaking for more than an hour in a state with a hotly contested Senate race and a vulnerable GOP incumbent.

The shifting events Thursday seemed to raise prospects that Pelosi and Mnuchin could somehow pull together a deal, even while making the ultimate outcome more uncertain than ever.

Trump began the day by calling into Fox Business Network, where he criticized Mnuchin and announced he wanted more spending than what’s on the table.

“I’ve told him. So far, he hasn’t come home with the bacon,” the president said of Mnuchin.

Around the same time McConnell appeared on camera in Louisville, where he is campaigning for reelection. He cast his ballot at an early voting site and at a news conference afterward issued the first of multiple denunciations of any giant spending bill. Questioned about Trump’s directive to “Go big,” McConnell detailed his plans to try again to advance a narrowly targeted bill and said, “I’m proposing what we think is appropriate.”

Trump seemed unaware of or indifferent to the GOP objections to big new spending.

“The Republicans are very willing to do it,” Trump said, insisting that Pelosi is standing in the way and “she’s got a lot of mental problems.”

“Nancy Pelosi doesn’t want to give anything. She thinks it helps her with the election. … We’re not holding it up. She’s holding it up,” Trump said.

Trump added that Pelosi is “asking for all sorts of goodies — she wants to bail out badly run Democrat states and cities. … She wants money for things you could — your pride couldn’t let it happen.”

Several hours later Trump spoke at a rally in North Carolina where he riffed on any number of topics — but not the stimulus.

Not long after that, though, the president tweeted: “Pelosi is holding up STIMULUS, not the Republicans!”

Trump’s uneven posturing appears to have only strengthened Pelosi’s determination to hold out for a bigger and better deal, despite pressure from a number of House Democrats to reach an agreement now.

On a private call with members of her caucus on Thursday afternoon, Pelosi said that House Democrats have “maximum leverage” now, according to several people on the call who spoke on the condition of anonymity to discuss it. She said the Mnuchin proposal remains inadequate, and said she could not accept something that the administration can’t even sell to the Senate.

“The president’s even said this morning that he wants more. He said the night before that, ‘Go big or go home,’” Pelosi told her members.

“So, this is not the time to say, ‘Okay, let’s fold.’ This is what we have been building up to.”

In an interview on CNBC earlier, Mnuchin confirmed that he intended to essentially meet Pelosi’s demands on testing, saying, “This issue has been overblown.”

He expressed concerns about overall prospects for a deal as negotiations draw out, saying that “unfortunately politics has gotten in the way.” But, Mnuchin said, “I will continue to negotiate until we can get a deal done that makes sense.”

The conversations took place amid worsening economic conditions.

After a huge wave of layoffs in March and April, there has been a noticeable increase in the past few weeks, as well, following the expiration of a number of federal aid programs. The airline and travel industry have been particularly hard hit, while restaurants and other businesses continue to close nationwide. The number of new unemployment claims jumped last week, the Labor Department reported on Thursday.

Congress passed about $3 trillion in emergency aid in March and April, but a number of those programs have run their course.

Mnuchin and Pelosi have agreed on several measures to include in a new stimulus plan, including a desire to send another round of $1,200 stimulus checks, more small- business aid and help for the airline industry. They also have sought to extend emergency unemployment insurance, although there have been differences on how to structure such assistance. And multiple other issues remain unresolved, such as corporate liability protections Democrats oppose, money for cities and states, and child care.

Defending his call for higher spending, Trump repeatedly asserted without evidence or explanation that China would pay for the nearly $2 trillion stimulus package. “I’d like to see more money — because it comes back,” he said on Fox Business Network. “We’re going to take it from China. I’ll tell you right now: It’s coming out of China.”

The president has repeatedly made false claims about foreign nations paying for domestic spending projects, for instance claiming that Mexico would fund construction of a wall along the southern U.S. border.

Asked how he would get China to pay for the stimulus package, Trump asserted: “Well, there’s lots of ways. Okay? There’s a lot of ways. And I’ll figure all of them out. I already have them figured out.”

Meanwhile coronavirus cases are on the rise across the United States and there is a downturn on Wall Street.

More than 20 states hit new highs in their seven-day case average, while 40 states have seen week-to-week increases in infections. The Dow Jones industrial average fell sharply Thursday morning before recovering most of its losses.

— Rachael Bade contributed to this article.