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Negotiations over the next stimulus package concluded today without a deal. White House Chief of Staff Mark Meadows and Treasury Secretary Steve Mnuchin met with Speaker Nancy Pelosi and Minority Leader Chuck Schumer for several hours in an effort to reach what some hoped would be an overall agreement today.
Speaking after the discussions, Mr. Schumer described it as a “disappointing meeting.” He said they reiterated their offer to reduce the $3.4 trillion cost of the HEROES Act bill by $1 trillion if Republicans would increase the $1 trillion cost of the HEALS Act by $1 trillion. While this would still leave a gap of $400 billion, Mr. Schumer said they could then “begin to meet in the middle.” Mrs. Pelosi said that the cost of the HEROES Act could be reduced by limiting the time period of some benefits, although she didn’t provide specifics.
The key issues holding up a deal appear to be enhanced unemployment benefits and aid to state and local governments. On unemployment benefits, the HEROES Act calls for a continuation of the $600 federal benefit until January 2021. The HEALS Act proposed by Senate Republicans calls for a $200 benefit, later replaced with a system to give the unemployed 70% of their prior income.
Mr. Mnuchin said that they made a compromise offer on unemployment benefits, but that the Democrats were unwilling to compromise. He did not provide details of the offer.
As for state and local government aid, the HEROES Act calls for about $1 trillion in spending. While the Republicans are willing to provide some aid, it falls far short of what the Democrats have proposed. According to Mr. Meadows, two weeks ago Democrats wanted $915 billion for state and local aid, and their position hasn’t changed.
Both sides said they are willing to hear compromise proposals from the other side. Neither side indicated when they may meet again to continue negotiations.
President Trump’s Executive Orders
Having failing to reach either a comprehensive deal or a more narrowly targeted compromise, attention turns to President Trump. Mr. Mnuchin said that they will recommend to the President that he move forward with issuing some executive orders. They acknowledge that this is “not the first choice.”
Specifically, Mr. Mnuchin said that they will recommend that the President issue executive orders in three areas:
- Enhanced unemployment benefits
- Rental foreclosures
- Student loans
He didn’t provide specific details on what relief the President could or would provide in each of these areas. Mr. Schumer has said that such action by the President would result in litigation.
Based on a tweet President Trump made yesterday, he is also still considering a payroll tax cut:
Stimulus Check Update
In addition to unemployment benefits, many have been anticipating a second stimulus check. While there are some differences in the proposals under the HEROES Act and HEALS Act, these do not seem to be keeping the parties from reaching agreement.
Economic impact payments, however, will not go out until legislation is agreed upon and signed into law. As a result, the time table for the second round of stimulus checks is unknown.
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