New stimulus relief talks collapse
Trump halts push on virus aid package until after election
WASHINGTON — President Donald Trump on Tuesday called an abrupt end to negotiations with Democrats over additional COVID-19 relief, delaying action until after the election despite ominous warnings from his own Federal Reserve chairman about the deteriorating conditions in the economy.
Trump tweeted that House Speaker Nancy Pelosi was “not negotiating in good faith” and said he’s asked Senate Majority Leader Mitch McConnell to direct all his focus before the election into confirming his U.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 unexpected turn could be a blow to Trump’s re election prospects. Trump is quarantining in the White House with a case of COVID-19, and the latest batch of opinion polls shows him significantly behind former Vice President Joe Biden with the election four weeks away.
The collapse of talks means that Trump and down-ballot Republicans will face reelection without delivering aid to voters — such as a preelection batch of $1,200 direct payments to most individuals — even as the national jobless rate is about 8% with millions facing the threat of eviction.
Sen. Susan Collins, RMaine, said “waiting until after the election to reach an agreement on the next Covid-19 relief package is a huge mistake.”
Trump’s move came immediately after he spoke with the top GOP leaders in Congress, who had been warily watching talks between Treasury Secretary Steven Mnuchin and Pelosi. Many Senate Republicans had signaled they would not be willing to go along with any stimulus legislation that topped $1 trillion, and GOP aides had been privately dismissive of the prospects for a deal.
Just Saturday, tweeting from Walter Reed National Military Medical Center, Trump said, “OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE.” But any Pelosi-sponsored agreement of close to $2 trillion raised the potential of a GOP revolt if it came to a vote.
Last week, the White House said it was backing a $400 per week pandemic jobless benefit and dangled the possibility of a COVID-19 relief bill of $1.6 trillion. But that offer was rejected by Pelosi, who continued to take a hard line in the talks, including insisting on repeal of a $254 billion GOP business tax break passed in the March package as a way to finance additional relief.
Pelosi had spoken with Mnuchin earlier Tuesday. After Trump’s tweets spiking the negotiations, Pelosi said Trump was “unwilling to crush the virus” and “refuses to give real help to poor children, the unemployed and America’s hard working families.”
Trump broke off talks after Federal Reserve Chairman Jerome Powell warned earlier Tuesday that the economic recovery remains fragile seven months into the coronavirus pandemic without further economic stimulus.
Stocks dropped on Wall Street after Trump ordered a stop to negotiations. The Dow Jones Industrial Average swung from a gain of about 200 points to a loss of 376 points at closing.
Trump cited Pelosi’s demands for state and local governments as a key reason for pulling out of the talks. Pelosi and Mnuchin were far apart on that issue — with Trump offering $250 billion while Pelosi was holding out for more than $400 billion. And Pelosi was asking for a higher weekly jobless benefit and refundable tax credits for the working poor, among other provisions.
The negotiations started in July and were on pause for weeks before reheating recently. Pelosi was insisting on an aid package exceeding $2 trillion — roughly the cost of the landmark CARES Act in March.
Early rounds of COVID relief passed by overwhelming margins as the economy went into lockdown in March. After that, Trump and many of his GOP allies focused more on loosening social and economic restrictions as the key to recovery instead of more taxpayerfunded aid.
Still, the decision to halt negotiations could be risky.
Tim Murtaugh, a Trump campaign spokesman, pushed back against the notion that breaking off negotiations could hurt the president at the ballot box.
“Nancy Pelosi, Chuck Schumer and congressional Democrats have not been honest brokers,” Murtaugh said. “They would rather have a political issue to help Joe Biden than act to help Americans. It’s despicable.”
While Trump said he’ll restart talks in November if he wins reelection, a Biden victory could mean the economy would go without further stimulus until February.
Campaigning in Pennsylvania, Biden said “this pandemic is not a red-state or blue-state issue.”
The virus “doesn’t care,” he added, “where you live, what political party you belong to. It affects us all. It will take anyone’s life. It’s a virus — it’s not a political weapon.”