WASHINGTON - The Trump administration is prepared to make a roughly $1.8 trillion offer to House Speaker Nancy Pelosi, D-Calif., as it has begun to urgently seek a new economic relief package just three days after the president declared negotiations over.
“Covid Relief Negotiations are moving along. Go Big!” President Donald Trump wrote on Twitter Friday.
One of Trump’s top economic advisers, Larry Kudlow, said on Fox Business Network that Trump had just approved a new package, and that Treasury Secretary Steven Mnuchin would be speaking with Pelosi “hopefully to put the final touches on this.”
“The gap is narrowing. The bid and the offer, if you will, has narrowed significantly,” Kudlow said. “And, therefore, in Wall Street terms, there may be a trade for some additional assistance for the American recovery from this pandemic contraction.”
A person familiar with the situation, who spoke on condition of anonymity to discuss private negotiations, said Trump had signed off on a counter-offer to Pelosi with a pricetag around $1.8 trillion. Aside from the dollar figure, it was not immediately clear what had changed from the White House’s most recent offer of around $1.6 trillion, which Pelosi dismissed as too meager. Democrats have demanded hundreds of billions of dollars in new aid for states and cities, something Trump has long opposed.
The stock market moved slightly higher on reports of the new Trump offer, as some investors were hopeful that a new spending deal could be reached.
It was unclear if Pelosi would accept the new Trump offer. Pelosi had been pushing legislation around $2.2 trillion in the talks with Mnuchin before Trump abruptly pulled the plug on negotiations Tuesday -- only to reverse course after the stock market sunk and some in his own party objected.
“Because it is so necessary to meet the needs of the American people I do hope that we will have an agreement soon,” Pelosi said on MSNBC Friday. She confirmed she would be speaking with Mnuchin later in the day.
As the coronavirus pandemic intensified in March and April, Congress approved $3 trillion in new spending to try and arrest some of the economic fallout. They have struggled since then to approve another package, though, amid new signs that parts of the economy are weakening.
But with Trump down in the polls a month from Election Day he is suddenly pushing aggressively for a big new package, in a turnaround almost as abrupt as when he suddenly announced the cancellation of talks on Tuesday.
“He got a terrible backlash from it, including in the stock market, which is what he cares about,” Pelosi said. “And so then he started to come back little by little, and now a bigger package. So we’ll see what they have to offer today.”
There was no guarantee, however, that any deal struck between Pelosi and Mnuchin would pass muster with Senate Republicans. Senate GOP leaders have said any bill larger than $1 trillion would be difficult for many Senate Republicans to accept, and Majority Leader Mitch McConnell, R-Ky., could be reluctant to put legislation on the floor that would divide his conference -- especially as he tries to focus on confirming a new Supreme Court justice ahead of the election.
At an event earlier Friday in Kentucky, McConnell appeared to throw cold water on prospects for a deal, saying it was “unlikely in the next three weeks.”
Kudlow said the new offer would contain aid to airlines, small businesses and the unemployed. Both sides had also previously agreed on the need for a new round of $1,200 stimulus checks to individuals. They also had appeared to settle on $75 billion for coronavirus testing and tracing, although Democrats continued to push the administration for language on a comprehensive testing strategy, something Pelosi said Friday remained unsettled.
Talks have been on again and off again in a startling series of events this week and any outcome remained far from assured.
The new $1.8 trillion offer is the latest twist in a chaotic chain of events over the past week. From the hospital on Saturday, Trump wrote on Twitter that Congress should pursue a giant stimulus bill.
On Tuesday, he called talks off, saying he instead wanted to focus on having the Senate confirm a new Supreme Court justice. That statement, made in a series of Twitter posts, sent the stock market down sharply.
Later Tuesday, he called for $1,200 stimulus checks, airline aid, and small business assistance. Wednesday, Pelosi and Mnuchin began negotiating an airline aid bill, only to have Pelosi say that airline assistance could only come as part of a broader package.
On Thursday, the White House sent mixed signals, with Mnuchin pursuing a broader deal with Pelosi and other White House officials saying they were only interested in a piecemeal approach.