(Bloomberg) – The Trump administration is pulling out of negotiations on a new stimulus package and leaving Senate Majority Leader Mitch McConnell to restart long-standing talks with House Speaker Nancy Pelosi, according to people close to the situation.
While the White House would likely consult with GOP lawmakers on the details of a Covid-19 relief bill, it is now unlikely to take the lead in the talks, according to people, who spoke under cover of anonymity to discuss internal deliberations. The White House would only take over if negotiations were to be fully relaunched, the people said.
The White House did not respond to multiple requests for comment.
The move dramatically lowers the odds of a trillion dollar stimulus for the U.S. economy before January. President Donald Trump vowed to pursue a full-scale post-election stimulus, even claiming he would approve a $ 2 trillion bill, but has since focused on trying to reverse the president’s victories. elected Joe Biden in the Battlefield States.
This leaves the negotiations at an impasse, with neither McConnell nor Pelosi backing down from previous positions, even as the continued spread of the coronavirus threatens to weaken the recovery after earlier pandemic-induced shutdowns.
Federal Reserve Chairman Jerome Powell said earlier this month that further fiscal stimulus was “absolutely essential” to the US economic recovery.
Treasury Secretary Steven Mnuchin had conducted negotiations with Pelosi, but they found themselves at a stalemate before election day, with the administration proposing around $ 1.9 trillion in spending and Democrats at $ 2.4 trillion. A multitude of policy issues, ranging from aid to states and local governments to a Republican push for corporate liability protection, had also blocked a deal.
Senate Majority Leader Mitch McConnell continued to insist on a much smaller package of around $ 500 billion, and recently cited falling unemployment rate and progress on a Covid-19 vaccine as reasons to stick to this position.
He told reporters on Thursday that more stimulus was needed, but only a targeted package like the one he had previously proposed. As for the Democrats’ proposal for a much larger plan, he said, “This is not a place I think we’re ready to go to.”
His office declined to comment on the White House’s role in the negotiations.
Senate Minority Leader Chuck Schumer said on Thursday the $ 2.4 trillion bill passed by the House was to be the starting point for any new stimulus talks, deepening the stalemate with the Senate.
“We are in the same place,” Pelosi at a press conference with Schumer. “Even more with the pandemic because look at these numbers. Look at these numbers. Look at the predictions of the scientific community. “
Pelosi did not respond to whether she had spoken to anyone in the administration.
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