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Virus aid talks break down as White House weighs unilateral action

Democrats offered to cut cost of package by moving up expiration dates of relief programs; Mnuchin calls that a "nonstarter"

Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer conduct a news conference on coronavirus aid in the Capitol Visitor Center on Thursday, August 6, 2020.
Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer conduct a news conference on coronavirus aid in the Capitol Visitor Center on Thursday, August 6, 2020. (Tom Williams/CQ Roll Call)

Coronavirus relief negotiations have officially come to a halt, with both sides saying Friday they’ll only come back to the table when the other side has something new to offer.

With legislative talks at an impasse, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows said they will recommend President Donald Trump act unilaterally to extend enhanced unemployment benefits, eviction and foreclosure moratoriums and student loan relief as soon as this weekend.

“It’s going to take us a little bit of time for us to finalize these and process them, but we’ll do we’ll do them as quickly as we can because the president wants action,” Mnuchin told reporters after negotiations with congressional Democrats failed to produce progress on a legislative solution.

Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer said after the meeting that they reiterated their offer from the previous day to meet in the middle on the cost of the package. Democrats started with a $3.4 trillion bill the House passed in May and Republicans with a $1 trillion proposal released last week.

“They said they couldn’t go much above their existing $1 trillion,” Schumer said.

Added Pelosi: “I told them come back when you are ready to give us a higher number.”

Mnuchin and Meadows said Friday’s meeting didn’t yield any progress and they wouldn’t resume negotiations until Democrats had something new to offer.

“To the extent that they are willing to make new proposals, the chief and I will be back here,” Mnuchin said.

Democrats have said they’d cut the cost of the package only by moving up expiration dates of relief programs, not cutting the amount of aid they want to provide. Meadows dismissed that as a budget gimmick.

“They can’t come up with any significant cuts in their bill,” he said. “What they want is a $2.5 trillion blank check.”

Meadows said Democrats have not budged at all in their demands for giving state and local governments $915 billion or for extending enhanced unemployment benefits at $600 per week.

Republicans argue states and localities still haven’t used up the $150 billion appropriated in the March aid package; a Treasury report said through June 30 about 75 percent remained unspent, though the amount varied overall. On unemployment benefits, the GOP cites Congressional Budget Office and other studies showing many recipients of the $600 supplement earn more than they did while working as a reason to reduce that figure.

“I think if we can reach an agreement on state and local and unemployment, we will reach an overall deal,” Mnuchin said. “And if we can’t, we can’t.”

It’s unclear if negotiators will return to the table this month. The House and Senate have run through the legislative weeks they had scheduled for the summer and sent lawmakers home, though with plans to call them back as soon as there is a deal.

Now it’s unclear if there will be legislation that would require lawmakers to return to the Capitol this month.

A deal won’t be any easier to reach come September, when Congress will also be trying to figure out how to pass legislation to fund the government before the fiscal year ends Sept. 30. Mnuchin declined to speculate if the two spending bills would ultimately merge.

‘Not overplaying our hand’

A few hours before the negotiations broke down, Pelosi insisted that she and Schumer weren’t being unreasonable.

“No, we haven’t overplayed our hand,” Pelosi said Friday on MSNBC. “We are not overplaying our hand when we’re factually presenting what our needs are for our families, for our teachers, for our schools, for ending the virus.”

Both sides acknowledge Trump executive orders will not provide all the relief that is needed.

“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,” Meadows said.

Schumer said the executive orders would have limited power because Trump can’t spend money without congressional approval.

“It’s not going to be done in as good a way,” he said.

Pelosi dodged a question in the MSNBC interview about whether Democrats would pursue legal action to block Trump’s executive orders, saying Democrats are putting their energy into finding common ground.

Friday morning’s employment report underscored the need for further relief while giving both parties arguments for how much or little is needed.

While the economy added nearly 1.8 million jobs last month, the pace of growth slowed substantially and less than half of jobs lost in the early months of the pandemic have returned. Permanent job losses remained steady last month, but the number of unemployed for 15 to 26 weeks — after which typical state unemployment benefits are exhausted — more than tripled to 6.5 million.

The report showed a bright spot in state and local government employment in July, with 274,000 jobs gained, mostly in education. But some analysts say those gains could evaporate unless states and localities get relief from Congress soon.

It’s unclear even if Republicans had agreed to Democrats’ offer to cut the cost of the package by about $1 trillion if they could do that just by moving around expiration dates.

Pelosi said they’d be willing to move up the end date of provisions in the Democrats’ bill that last through Sept. 30, 2021, for instance. She acknowledged during the MSNBC interview that moving up expiration dates would likely lead to more congressional negotiations when those deadlines arrive.

“We could go for a shorter time and revisit the issue after the first of the year,” Pelosi said.

One obstacle to Republicans hoping that Democrats will be willing to come down further is that Schumer said House Democrats wouldn’t have the votes to pass a bill that dips below $2 trillion.

Even issues like school funding, where the parties should be able to find common ground, are proving to be difficult to negotiate.

“We had major disagreement between us on the schooling in terms of the dollar amount but also how the money would be spent,” Pelosi said on MSNBC. “The president is insisting that most of the money that they are allocating will go to schools that are opening, actually when the evidence is that across the country school districts are saying largely, overwhelmingly that they will be opening virtually or in a hybrid fashion.”

In the Senate Republicans’ relief package, out of $70 billion allocated to K-12 schools, two-thirds would be set aside to help schools reopen. Overall, Pelosi wrote in a letter to Democratic lawmakers Friday, the two sides are “a couple hundred billion dollars apart” on education funds.

Pelosi also said that while the parties agree on extending an eviction moratorium for renters, Republicans have offered zero money for rental assistance.

Mnuchin offered a different take Thursday night.

“We said we’d consider some payments on rental assistance as well,” he said.

David Lerman, Rachel Oswald and Doug Sword contributed to this report.

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