Northwest Arkansas Democrat-Gazette
Stimulus talks stall; Trump poised to act
WASHINGTON — President Donald Trump signaled Friday that he planned to forge ahead without Congress to address lapsed relief measures for millions of Americans after two weeks of negotiations with Democrats collapsed.
Trump, in a Twitter post, accused Democrats of trying to extract “Bailout Money for poorly run Democrat cities and states” as part of the failed talks. “Nothing to do with China Virus!” he wrote, adding “No interest. We are going a different way!”
That “different way” appears to be preparing a series of executive orders that would address the lapsed unemployment benefits and eviction moratorium that Congress authorized in March but that expired last month.
It’s unclear what legal apparatus Trump would use to authorize emergency benefits without congressional approval, but his aides said they feel confident that Trump has the standing to intervene.
The White House is also looking at executive orders that could extend flexibility for student loan borrowers, a provision that is set to expire next month. Trump also wants to sign an order that
would defer or somehow suspend the payroll tax, something that hasn’t been part of the negotiations in the past week.
White House Chief of Staff Mark Meadows said, “This is not a perfect answer — we’ll be the first ones to say that — but it is all that we can do, and all the president can do within the confines of his executive power.”
Democrats insisted that they are still open to negotiations and said they had already tried to make concessions, but White House officials suggested that — absent a new approach from the Democrats — they were done trying to craft a deal and wanted to move ahead with the executive orders.
“The president would like us to make a deal, but unfortunately we did not make any progress today,” Treasury Secretary Steven Mnuchin said Friday after he and Meadows met for the fifth day in a row with House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Charles Schumer, D-N.Y., at the Capitol.
“At this point we are going to recommend to the president that over the weekend we move forward with some executive actions,” Mnuchin said.
Among other things, White House officials are looking at moving funds from the Federal Emergency Management Agency into a program that could pay jobless benefits, people briefed on the discussions said.
OFFER REJECTED
Democrats said Friday that they had offered to reduce the price tag of their $3.4 trillion bill by $1 trillion, but administration officials rejected the offer. Republicans dismissed the Democrats’ offer as budget gimmickry because they achieved the price reduction largely by shortening the time frame of proposed benefits, not by reducing specific demands.
The Democrats’ demand for nearly $1 trillion in state and local aid remained a major sticking point.
“There’s a lot of areas of compromise,” Mnuchin said after Friday’s meeting. “I think if we can reach an agreement on state and local and unemployment, we will reach an overall deal. And if we can’t we can’t.”
“If you’re talking about compromise, even with their trillion-dollar Washington, D.C., magical way of saying they are coming down a trillion, they can’t come up with any significant cuts in their bill,” Meadows said.
Chances for a deal appeared to have all but evaporated, and no further meetings were scheduled.
“They said they couldn’t go much above their existing $1 trillion. And that was disappointing,” Schumer said. “We’re hopeful that they will think about it and come back and tell us they’re willing to meet us halfway.”
Congress has already spent close to $3 trillion this year on its response to the coronavirus pandemic, but many of the most popular programs — such as $1,200 stimulus checks and extra unemployment benefits — have run their course. Democrats and many Republicans agree that more aid is needed, but they are split over how to proceed.
Democrats say they cannot accept a bill that provides less than $2 trillion in new spending, while Senate Republicans believe no bill that large can pass in their chamber. That left no clear legislative path forward, even as some 30 million jobless Americans have gone two weeks without emergency federal unemployment benefits that expired.
A Sept. 30 deadline when government funding expires will force another reckoning.
FOUR ISSUES
There are at least four issues that White House officials have said they’d like to target through executive orders.
One is to attempt to provide some relief to jobless Americans whose enhanced $600 weekly unemployment aid expired at the end of last month. White House officials have looked at potentially redirecting money from other programs toward unemployment benefits.
Another target is to provide eviction relief for Americans who had been protected by a congressionally authorized eviction moratorium, but it expired last month, as well.
The moratorium covered renters who live in homes with federally backed mortgages, which the Urban Institute estimates to be 12.3 million households. Democrats agree that the administration can unilaterally extend the eviction moratorium, but argue that it is of limited value without providing financial support to renters.
White House officials are also looking to extend student loan flexibility to certain Americans, cognizant that a congressionally approved program for those borrowers expires next month.
White House economic adviser Larry Kudlow also said Trump is poised to sign executive orders deferring payroll taxes, but the logistics of that are unclear. It could not be immediately learned, for example, if Americans would ultimately have to repay any deferred tax cut.
A positive jobs report Friday morning appeared to harden the administration’s posture, with Kudlow pointing to the 1.8 million jobs added in July as evidence of a “self-sustaining recovery.”
Trump and White House officials have been eyeing the possibility of unilateral action all week, and Kudlow confirmed Friday that they were looking at “repurposing” hundreds of billions of dollars that have not yet been spent from coronavirus relief legislation that was passed this spring.
Democrats insist that the White House can’t spend money without approval from Congress, but just as presidents before him have done, Trump has pushed the boundaries of executive authority.
Kudlow said the executive actions under consideration also include moves to “reform unemployment” by providing a benefit for reemployment and a retention tax credit for employers.
Cutting the 7.65% payroll tax, which comes out of workers’ salaries and goes to fund Medicare and Social Security, has been a long-standing goal for Trump. Lawmakers in both parties question the value of such a move, partly because it would do little to help workers who are not actually employed.
STRAINED ATMOSPHERE
Schumer, Pelosi, Meadows and Mnuchin have met almost a dozen times in the past two weeks. Despite small signs of incremental progress, the atmosphere had grown increasingly strained.
Before Friday’s meeting even started, Schumer and Pelosi heaped insults on Republicans in general and Meadows in particular, in comments that did not seem designed to engender fruitful negotiations.
“Basically, what’s happening is Mr. Meadows is from the tea party … and they don’t want to spend the necessary money,” Schumer said of the former North Carolina congressman, who was a leader of anti-spending conservatives when he served in the House.
Pelosi said for the second day in a row that Republicans don’t give “a d***” about people in need.”
Republicans accused Democrats of trying to get a political outcome instead of a deal, with the election approaching.
“Rather than be part of the solution, they have chosen to be part of the problem,” Sen. John Cornyn, R-Texas, said Friday on Twitter.
Democrats have been pushing for a wide-ranging $3.4 trillion bill that the House passed in May, which extended the enhanced $600 weekly unemployment benefits through January, among many other provisions. Republicans are reluctant to spend more than $1 trillion after already signing off on unprecedented stimulus spending this spring.
On a private call with GOP senators earlier Friday, Mnuchin and Meadows identified the dispute over state and local aid as the biggest sticking point, according to a person familiar with the discussion who spoke on condition of anonymity to describe it. Democrats want $915 billion to help states and local governments whose budgets have been decimated by plummeting tax revenue, but Republicans offered only $150 billion.
There was also disagreement on money for schools, testing, housing, child care, the U.S. Postal Service, the U.S. census and voting, according to Pelosi.
Republicans believe Pelosi was counting on them to cave in the end, after she struck a series of deals with Mnuchin in the spring that some Republicans ultimately opposed. Most of those occurred before Meadows came on as chief of staff, and this time the GOP side did not cave, at least not yet.
In an interview on MSNBC, Pelosi denied that she’d overplayed her hand.
“We haven’t overplayed our hand,” Pelosi said. “We aren’t overplaying our hand when we are factually presenting what the needs are.”
Ahead is uncertainty. Members of both the House and Senate have left Washington, with members sent home on instructions to be ready to return for a vote on an agreement. With no deal in sight, their absence raises the possibility of a prolonged stalemate that stretches well into August and even September.
Information for this article was contributed by Erica Werner, Rachael Bade and Jeff Stein of The Washington Post; and by Andrew Taylor of The Associated Press.