President urges stimulus deal, but obstacles remain

Source: By Jeff Stein, Washignton Post • Posted: Sunday, October 4, 2020

White House officials have expressed optimism to outside advisers that Mnuchin and Pelosi can approach agreement next week

President Trump and Treasury Secretary Steven Mnuchin at a news conference at the White House in August. (Andrew Harnik/AP)
President Trump and Treasury Secretary Steven Mnuchin at a news conference at the White House in August. (Andrew Harnik/AP)

President Trump on Saturday called for Congress to pass a stimulus package, urging swift action while being treated for the novel coronavirus despite significant obstacles remaining between negotiators over an agreement.

White House officials have in recent days sought with increasing urgency to secure a stimulus deal amid new signs of weakness in the U.S. economy and Trump’s flagging polling numbers ahead of the election in November. The president’s sudden hospitalization on Friday threatened to inject a new element of uncertainty into the already delicate talks, although negotiations continued into the weekend.

“OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE,” Trump tweeted on Saturday afternoon from Walter Reed National Military Medical Center.

Trump’s push for a stimulus package comes as the pace of the economic recovery wobbles and evidence mounts of permanent job loss in certain sectors. American Airlines and United Airlines announced earlier this week that they would furlough as many as 32,000 workers, and the restaurant industry has warned of a wave of permanent small business closures in the winter without additional federal aid.

Adding further uncertainty to the talks, three Republican senators have tested positive for the virus in recent days. Senate Majority Leader Mitch McConnell (R-Ky.) announced Saturday that Senate floor proceedings would be postponed until Oct. 19 amid fears of the virus’s spread in the Capitol, but negotiations between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D-Calif.) are expected to continue. Mnuchin and Pelosi have so far tested negative for the virus. Mnuchin’s latest negative test was on Saturday, according to one person granted anonymity to share the treasury secretary’s test results.

Pelosi and Mnuchin revived bipartisan talks earlier this week and expressed optimism that an agreement could be reached. White House officials have in recent days privately expressed confidence that they could secure at least the outlines of a deal by the middle of next week, according to one person who spoke on the condition of anonymity to share details of private conversations.

But significant outstanding disagreements cloud the prospects for a deal. Congressional Democrats have pushed for this stimulus package to cost $2.2 trillion, while Mnuchin has said the administration is “in the neighborhood” of $1.5 trillion — a wide gulf of $700 billion that will be hard to close in a matter of days.

Substantial policy disagreements also remain. One issue under discussion is a Democratic proposal to expand eligibility for tax credits to the Affordable Care Act for people on unemployment, as many Americans have lost their health insurance along with their jobs because of the pandemic. Republicans may oppose such a provision on the grounds that it provides federal funds that can be used for abortion. A Democratic aide argued that Obamacare already has strict limits preventing federal funding from being used on abortions.

Federal unemployment benefits loom as an additional point of contention. Democrats have called for Congress to again provide a $600 per week federal benefit for the millions of unemployed Americans. Mnuchin instead has proposed providing the unemployed with $400 per week in federal benefits, but could face resistance to even that lower number among Republican lawmakers. Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, balked at the $400 and argued that it would encourage people to stay home rather than work.

Republicans have also strongly rejected Democratic calls to provide hundreds of billions in federal aid to states and local governments, perhaps the biggest sticking point to any deal. Democrats and many economists have said additional fiscal support is necessary to prevent local governments from laying off thousands of workers, while Republicans have characterized the measure as a “blue state bailout” that would reward Democratic-run states for irresponsible profligacy.

Erica Werner contributed to this report.