Trump rejects Democrats’ COVID-19 stimulus offer, says no deal until after the election. Pelosi says White House in ‘complete disarray’

Nicholas Wu

Christal Hayes
 
| USA TODAY

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COVID-19 stimulus: Trump signs new executive orders despite stalemate

President Trump signed four executive orders for COVID-19 relief but American’s may not see benefits without congressional approval.

WASHINGTON — President Donald Trump put an end to months of negotiations over a COVID-19 stimulus package Tuesday, rejecting the Democrats’ latest offer and saying he wanted to postpone negotiations until after the November election. 

In a Tuesday afternoon tweet, Trump said Democrats were “not negotiating in good faith.” He told Senate Majority Leader Mitch McConnell, R-Ky., to instead “focus full time” on confirming Trump’s Supreme Court nominee Amy Coney Barrett. 

“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump tweeted.

The president’s rejection and insistence on restarting negotiations after Nov. 3 means both parties head into a crucial election without more relief for Americans struggling as a result of the coronavirus pandemic, which has led to unprecedented levels of unemployment and caused businesses to suffer as states impose social distancing measures.

In a statement, House Speaker Nancy Pelosi said Trump had put his interests above the country’s and said he was “unwilling to crush the virus.” 

“Clearly, the White House is in complete disarray,” she said.

Hours before Trump spiked the talks, Federal Reserve Chairman Jerome Powell urged Congress to pass more stimulus relief, saying inadequate support would weaken recovery from the coronavirus recession. 

Markets, which had been bolstered by the hopes of a stimulus deal, plunged after Trump’s announcement. The Dow Jones tumbled by about 350 points after rising about 200 points earlier on expectations for an agreement while the Standard & Poor’s 500 index was down about 1.2%.

The president ended negotiations the day after he returned to the White House Monday evening after spending three days at Walter Reed National Military Medical Center, where he was being treated for COVID-19. He faced heavy criticism Monday for telling Americans not to fear the virus, saying “Don’t let it dominate your life.”

House Democrats were holding a call as Trump tweeted that negotiations on another bill were being halted, according to a Democratic aide that spoke on the condition of anonymity to discuss internal conversations. Pelosi had spent part of the call telling fellow Democrats that she was planning to speak with Treasury Secretary Steven Mnuchin later Tuesday and that the biggest hurdle was funding for state and local governments, the aide said.

After Trump’s tweet, Pelosi responded on the conference call by questioning whether Trump’s use of steroids to treate COVID-19 was affecting his thinking, according to a Capitol Hill source who spoke on the condition of anonymity to freely discuss the contents of the call.

Forty-five minutes after Trump posted his tweet, Pelosi and Mnuchin spoke “briefly” on the phone again, and Mnuchin told Pelosi Trump had “walked away” from the talks, said Pelosi spokesman Drew Hammill.  

The collapse of negotiations “puts the American economy at risk of a double-dip recession” and “flies in the face of new recommendations from the Federal Reserve and IMF,” said Josh Lipsky, director of programs and policy at the Atlantic Council’s GeoEconomics Center and a former senior advisor at the International Monetary Fund.

Congress hasn’t approved additional coronavirus relief since Spring, when both chambers came to bipartisan compromises on a handful of bills that totaled more than $3 trillion, including one-time $1,200 checks to Americans and a $600 weekly unemployment boost. But most of that relief dried up, including a loan forgiveness program for small businesses called the Paycheck Protection Program. Airlines have warned of mass layoffs and furloughs after their billions of dollars in federal payroll assistance expired.

The latest bill that received bipartisan support was passed in July and did not include more funds, but rather an extension that offered small businesses several more weeks to apply for federal loans under the Paycheck Protection Program.

After negotiations fell apart in August, Trump issued several executive orders aimed at providing relief. But negotiations stalemated as both sides remained unable to agree on issues like the amount of the federal boost to unemployment insurance and state and local funding. Republicans argued the unemployment benefit could work as a disincentive to working if it were too much money.

Both sides also had deadlocked over the amount of aid to give to state and local governments as well. Republicans were wary of adding to the deficit and said the money would bail out mismanaged local governments.

Trump’s tweet seemed to indicate the state and local funding provisions of a stimulus deal remained a major sticking point, writing that Democrats wanted money to “bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19.” 

More: Pelosi ‘optimistic’ of a stimulus deal, saying Trump’s COVID-19 diagnosis ‘changes the dynamic’

More: ‘You know that your dream’s ending’: Flight attendants bid tearful goodbyes as they’re furloughed

Trump’s tweet is a major shift in tone on negotiations. Democrats had grown bullish about a deal going into last weekend. Pelosi said Friday on MSNBC she was “optimistic” about a deal, saying Trump’s positive COVID-19 diagnosis “changes the dynamic.” She and Mnuchin talked Monday as they continued to work through remaining areas of disagreement.

Trump, who had urged Republicans to accept more aid, appeared to encourage talks in a Saturday tweet, saying, “OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE.” White House negotiators had most recently proposed $1.6 trillion in relief, but Democrats held fast at $2.2 trillion for their plan, leaving the two sides hundreds of billions of dollars apart. 

More: Stocks fall after Trump tweets he’ll delay stimulus talks until after election

Trump’s stance to end negotiations could be a gamble for both him and congressional Republicans just four weeks before Election Day. Senate Republicans hold a 53-47 majority and polling suggests Democrats have a chance of taking several seats and with it, the majority in the chamber.

Republicans have for weeks blamed Democratic leadership for the lapse in aid and the impasse over future relief, but now their party’s top leader is publicly spiking  discussions over another bill. 

Democrats had been feeling the pressure back home. Vulnerable House Democrats, especially those in seats that Trump won in 2016, have repeatedly attempted to sway congressional leadership into coming to a deal and have asked Pelosi to take on smaller bills to tackle some of the immediate priorities, such as unemployment or refueling the small business loan program, a suggestion she opposed. A bipartisan group of moderate lawmakers, known as The Problem Solvers Caucus, even proposed their own legislation to offer a middle ground in hopes of fueling negotiations. 

One House Republican, Rep. John Katko, R-N.Y., who faces a tough reelection race, wrote on Twitter he disagreed with Trump’s decision to end negotiations. “With lives at stake, we cannot afford to stop negotiations on a relief package,” he said. Katko is a member of the Problem Solvers Caucus. 

Both the Democratic-controlled House and the Republican-controlled Senate have tried to pass their own proposals, but both failed to advance a bill that could become law. Last week, the House passed a smaller, $2.2 trillion relief bill, a scaled-back version of the Heroes Act, a $3 trillion proposal that passed the House in May, but was never voted on in the Republican-controlled Senate.

The scaled-down bill helped serve as a way to appease moderate lawmakers, who had pushed Democratic leaders to act on stimulus before lawmakers left to campaign. 

In September, Senate Republicans advanced their own $300 billion stimulus bill which would have included additional unemployment benefits for out-of-work Americans, funding for schools and liability protections for businesses and health care facilities, but Senate Democrats blocked the proposal.

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