Trump calls off relief talks until after poll
Stimulus delayed despite ominous warnings about deteriorating economy
US President Donald Trump has called off talks on a new stimulus plan for the coronavirus-ravaged US economy until after the November election, sending Wall Street plunging and upending recent progress made in the long-delayed negotiations.
A Tuesday afternoon tweet by the president undid the optimism that had developed in recent days after US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed talks on a follow-up measure to the $2.2 trillion CARES Act that was passed in March to blunt the downturn caused by the pandemic.
Earlier on Tuesday, Federal Reserve Chair Jerome Powell had called for additional spending to help the United States weather the downturn that has caused tens of millions of layoffs and a historic contraction in second-quarter annualized GDP.
But Trump accused the Democratic House leader of negotiating in bad faith, and said he’d asked Senate Majority Leader Mitch McConnell to focus instead on confirming his appointed judge to an opening on the Supreme Court.
“Nancy Pelosi is asking for $2.4 trillion to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19,” Trump tweeted, citing an incorrect figure for the Democrats’ latest proposal.
“We made a very generous offer of $1.6 trillion and, as usual, she is not negotiating in good faith. I am rejecting their request, and looking to the future of our country.”
Trump’s tweet sucked the enthusiasm from Wall Street traders who had been hoping for another injection of congressional cash, dropping the Dow 1.3 percent at the close.
“Today, once again, President Trump showed his true colors: putting himself first at the expense of the country, with the full complicity of the GOP members of Congress,” Pelosi said in a statement released after the president’s tweet.
Trump also announced on Tuesday that he will take part in the second presidential debate in Miami on
Oct 15 against his Democratic challenger Joe Biden. However, Biden said that the second debate should not be held if Trump still tests positive for the virus.
“I think we’re gonna have to follow very strict guidelines,” Biden told reporters in Maryland. “Too many people have been infected and it’s a very serious problem.”
Should Trump win the Nov 3 election in which polls show him trailing Biden, the president added he would work with Congress to “pass a major Stimulus Bill that focuses on hardworking Americans and Small Business”.
Earlier in the day, Powell told an economics conference the US recovery from COVID-19 would be “stronger and faster” with more government aid to protect against the possibility of accelerating job losses.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said.
‘Door has shut’
The CARES Act included extra $600 weekly payments to the unemployed as well as a program of loans and grants for small businesses.
However both programs expired around the end of July, and despite weeks of talks, Pelosi, Mnuchin and other top officials remain far apart on how much more to spend in another bill.
Art Hogan of National Securities said that hopes for additional spending from Congress played a key role in Wall Street’s recent gains but the “door that was open a sliver has shut”.
Labor Department data released last week showed the pace of hiring in September slowing compared to the month prior, with a disappointing 661,000 jobs added.
Meanwhile, data shows more than 800,000 US people filing new claims for jobless benefits each week, still above the worst single week of the 2008-10 global financial crisis more than six months after the business shutdowns began.