White House shows flexibility on coronavirus aid
WASHINGTON – The Trump administration is willing to consider another $1.5 trillion in relief for the U.S. economy and health care system, White House chief of staff Mark Meadows said Wednesday, including more aid to state and local governments than top GOP officials have been comfortable with to date.
Meadows spoke with President Donald Trump before a CNBC appearance Wednesday, where he said Trump was “encouraged” by the bipartisan Problem Solvers caucus proposal unveiled the previous day.
Meadows said the $1.5 trillion price tag was higher than Republicans would like, but “not a showstopper at this point,” while Trump tweeted that Republicans should “go for the much higher numbers” under discussion.
Meadows added that he was “probably more optimistic about the potential for a deal in the last 72 hours than I have been in the last 72 days.” He said, however, a deal would likely need to come together in the next “week to 10 days” in order for a further aid package to have an impact this year.
Speaker Nancy Pelosi hasn’t been willing to go any lower than $2.2 trillion, and several House committee leaders panned the Problem Solvers plan as inadequate.
On the biggest sticking point between the parties, the Problem Solvers offered up to $500 billion in direct aid to cashstrapped state and local governments. Republicans have offered $150 billion; Democrats are at $915 billion.
Meadows said the midway point proposed by the bipartisan House group was “more than what we’re seeing in terms of lost revenue,” which he said was in the $250 billion to $300 billion range. It wasn’t clear whether Meadows was endorsing that figure, however, because he also reiterated a GOP talking point that some $100 billion of the original $150 billion from the March relief law hasn’t yet been spent.
State budget officers have refuted the Treasury Department’s figures, arguing the estimates are outdated and don’t account for funds that have been committed.
The Problem Solvers proposal contains a trigger mechanism that would cut the amount of direct state and local aid by $130 billion if certain metrics on hospitalizations and vaccine development are met. Such metrics could result in faster reopenings, and therefore less state and local health care spending and more tax revenue.
“If we’re talking about trying to replace some of the lost revenues, hopefully that number is closer to the” $250 billion to $300 billion range, Meadows said, while adding that the Problem Solvers plan “gives us something to talk about, and I’m encouraged.”
Notably, in a departure from the prior negotiations that have been mainly between Meadows and Treasury Secretary Steven Mnuchin on one side and Pelosi and Senate Minority Leader Charles E. Schumer on the other, Meadows told CNBC it would be up to Congress to find the “sweet spot” on state and local aid.
GOP senators have been adamant about lower funding for states and localities. Majority Whip John Thune, R-S.D., told reporters Wednesday that $500 billion “would probably be a nonstarter over here,” and that the higher overall $1.5 trillion figure would “create a lot of heartburn.”
Senate Republicans introduced a $1.1 trillion package in late July that went nowhere, in part because of some 20 potential GOP defections. Last week they united around a “skinny” plan with a net cost of just $300 billion that Democrats called “emaciated.”
Trump nonetheless tweeted his encouragement Wednesday, urging Republicans to “go for the much higher numbers” while accusing Democrats of being “heartless” for refusing to cut a deal that includes another round of direct payments to U.S. households.
Both House Democrats and Senate Republicans offered more direct tax rebates and checks, worth up to $1,200 per person, in recent proposals. But it was Senate Republicans that dropped those payments from their skinny plan.
Some Republicans acknowledge that if a deal is going to come together before the elections, it’s likely to involve spending more than they prefer.
“My concern is that the window probably closed at the end of this month and we need to get busy finding out what we can all agree on,” said Sen.
Roy Blunt, R-MO., a senior appropriator. “And I think the number is going to be higher than our trillion dollars.”
Even if Republicans coalesced around $1.5 trillion, there’s still a $700 billion gap to bridge with Democrats. Pelosi says her party has already compromised at $2.2 trillion, which is down substantially from the $3.4 trillion package the House passed in May.
“We have come down, but with the needs of the America people we can only go so far,” Pelosi, D-calif., said on MSNBC Wednesday, adding that additional needs for “restaurants, airlines and the rest” that weren’t evident in May also need to be considered.
Pelosi has not publicly commented on the Problem Solvers framework, but had her committee chairs issue a joint statement that dismissed it. The plan “falls short of what is needed,” retreats from “critical policies” of the Housepassed bill and “fails to respond to additional issues that have emerged since May,” the chairs said.
Some Democrats involved in the Problem Solvers effort were furious.
“What truly ‘falls short’ is doing nothing,” Rep. Kendra Horn, D-okla., shot back on Twitter. “It is flatly unacceptable that congressional leadership is not at the table when businesses are closing, Americans are out of work, and families need help.
The political games have to stop.”