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White House shows flexibility on coronavirus aid; Pelosi holds firm

Speaker dismissive of suggestion from Democrats to have the House vote on another aid package even if Republicans don't back it

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 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, however.

Speaker Nancy Pelosi hasn’t been willing to go any lower than $2.2 trillion, however, and several House committee leaders panned the Problem Solvers plan as inadequate.

[Bipartisan House group unveils $1.5 trillion coronavirus relief plan]

On the biggest sticking point between the parties, the Problem Solvers offered up to $500 billion in direct aid to cash-strapped 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.

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State budget officers have refuted the Treasury Department’s figures, arguing the estimates are outdated and don’t account for funds that have been committed.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 “at least it 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.”

[‘Skinny’ coronavirus relief bill blocked in Senate]

‘Much higher numbers’

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,” Sen. Roy Blunt, R-Mo., a senior appropriator, said. “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.

[Despite pressure for COVID-19 relief deal, stalemate continues]

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 House-passed 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.”

Horn, who flipped a long-held Republican seat in 2018, is one of the most vulnerable Democrats up for reelection this cycle. Inside Elections with Nathan L. Gonzales rates her race a toss-up.

Rep. Max Rose, D-N.Y., another freshman whose race is ranked a toss-up, on Wednesday said Democratic leaders’ dismissal of the Problem Solvers plan is “laughable,” “idiotic” and “representative of why everyone hates this place.” He also told reporters the Senate GOP bill was too skinny and “not commensurate with the crisis we’re facing.”

“Stop the game, stop the stupidity and get to work,” Rose said.

Not just ‘checking a box’

It’s not just vulnerable Democrats who have spoken out. Many members of the Problem Solvers, as well as the moderate Blue Dogs and New Democrats and even Majority Leader Steny H. Hoyer, have said they want the House to vote on something.

Pelosi acknowledged her members’ concerns on MSNBC, but said there are differing schools of thought. Some want to bring up the May package again, and there are “those who say, ‘Just put something on the floor,’” she said.

The speaker, however, showed no indication she would support either of those strategies.

“We can put a bill on the floor, but we want to put a bill on the floor that can become law,” Pelosi said.

“I’m used to building consensus in my own caucus,” she added. “I’m proud of every statement our members are making. And I’m especially proud of our chairs, who’ve been solid.”

Pelosi also continued to reject suggestions of a piecemeal strategy, or passing something smaller now and coming back later to pass additional legislation: “You think the administration is going to do another bill?”

At the same time, Pelosi said Democrats believe they will have a new president to work with come January to bolster the $2.2 trillion. She said she thinks if the election were held today Democratic nominee Joe Biden would defeat Trump.

“Fortunately we’ll be able to correct some of it in January,” she said. “But right now we have to do more than just have the Republicans check a box.”

Peter Cohn and Jennifer Shutt contributed to this report.

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