(Bloomberg) — President Donald Trump said he’d support a virus relief package in excess of $1.8 trillion — his administration’s most recent negotiating proposal — and blamed House Speaker Nancy Pelosi for delaying a deal.
“We’re not holding it up, she’s holding it up,” Trump said in an interview Thursday on Fox Business. “She wants to wait until after the election. She thinks it hurts the Republicans.”
Pelosi is scheduled to have another call with Treasury Secretary Steven Mnuchin Thursday in a continuing saga of talks on another stimulus for the economy. Democrats want a $2.2 trillion aid plan, including a number of priorities that Republicans reject. Pelosi has accused the administration of not taking the impact of the coronavirus pandemic seriously.
“Absolutely I would” go over $1.8 trillion, Trump said Thursday, echoing his recent mantra “go big or go home.”
However, Trump faces another hurdle beside Pelosi to getting such a deal — Republicans. Senate Majority Leader Mitch McConnell and other GOP lawmakers have resisted any plan of much more than $1 trillion. Some Republican senators have questioned whether any additional stimulus is needed.
McConnell, speaking in Kentucky Thursday, reaffirmed his plan to put a narrow bill worth roughly $500 billion on the Senate floor next week. He said the proposal is “what we think is appropriate to tackle this dread disease.”
He said he doesn’t expect Democrats to support it. “They still are insisting on upwards of a $2.5 trillion grab bag,” McConnell said of the larger package passed by House Democrats. He has been among those expressing skepticism about getting anything done before Election Day.
Investor disappointment over the continuing impasse in the U.S. and new virus restrictions in Europe have contributed to declines in the S&P 500 Index this week. The gauge was down 0.6% as of 11:19 a.m. New York time, heading for a third consecutive drop.
‘Not Giving Up’
Mnuchin said earlier Thursday that Pelosi’s “all or nothing approach doesn’t make sense for the American people,” but that the administration is “not giving up” trying for an agreement.
Trump indicated he’d be open to calling Pelosi on the stimulus but doubted it would result in a deal. The two haven’t spoken directly in about a year.
Trump, who canceled negotiations last week and only days later reversed course to advocate a bigger stimulus than congressional Republicans support, said that Pelosi has “a lot of mental health problems and it’s going to be very hard to do anything with her.”
The president and speaker have each been questioning each other’s mental faculties. Pelosi said last week that Trump was “in an altered state right now,” and she suggested to colleagues that his thinking might be affected by the steroids he was given as treatment for Covid-19.
Trump and Mnuchin both said they’d like to deploy leftover funds from the March stimulus act. McConnell’s proposal would use such money to help small businesses, though Democrats have opposed a piecemeal approach to providing assistance.
Mnuchin said that there is $300 billion left from the Cares Act that is “sitting in the Treasury bank account right now, ready to go” if Congress could approve it for repurposing.
The Treasury chief also said, speaking on CNBC, that he wouldn’t let differences with Pelosi on a national coronavirus testing plan get in the way of a deal. The House speaker said Wednesday that she was hoping to get “better language back” on that issue Thursday.
Other roadblocks to a deal have included differences on tax credits for lower-income families and for real-estate and other businesses, along with the magnitude of support for state and local authorities.
Meanwhile, the economy continues to show evidence of the impact of a withdrawal of past fiscal stimulus — just as anticipated by Federal Reserve policy makers and private economists alike.
Applications for U.S. state unemployment benefits unexpectedly jumped last week to the highest since August, a report showed Thursday. Initial jobless claims in regular state programs totaled 898,000 in the week ended Oct. 10, exceeding all forecasts in a Bloomberg survey, Labor Department data showed Thursday.
Trump said Thursday that he did still think a stimulus deal is possible before Nov. 3 — “because I think there’s a lot of pressure on Pelosi.”
Yet when Trump was asked whether he told Mnuchin to seek a bigger stimulus package, the president expressed frustration with his main negotiator.
“I’ve told him,” Trump said on Fox Business. “So far he hasn’t come home with the bacon.”
Trump’s own undermining of his team, by endorsing a bigger package than they have fought for — and that Senate Republicans oppose — has encouraged the Democrats to hold out.
“Pelosi suggests that she has the leverage in negotiations with Mnuchin since President Trump seems anxious for a big pre-election deal,” said Sarah Binder, a political science professor at George Washington University and a senior fellow at the Brookings Institution. “The closer to the election a deal might be reached, the better for Democrats and the worse for Trump.”
(Updates with McConnell quotes in the sixth paragraph and Trump quotes under the ‘Pelosi’s Leverage’ subhead.)
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