House Speaker Nancy Pelosi (D-Calif.) pressed Treasury Secretary Steven Mnuchin for a swift White House response over coronavirus stimulus disputes, showing a continuing partisan divide that’s prevented Congress to pass a massive relief bill since April.
In a letter to Mnuchin on Thursday, released just five days before the presidential election, Pelosi cited a pack of coronavirus stimulus issues that the two couldn’t resolve during back-and-forth negotiations that have lasted for months, as the speaker noted she’s “still awaiting” answers on state and local aid, school funding, child care, tax credits, enhanced unemployment benefits, liability protections for businesses and stronger worker protections.
“Your responses are critical for our negotiations to continue,” the speaker wrote. “The President’s words that ‘after the election, we will get the best stimulus package you have ever seen’ only have meaning if he can get Mitch McConnell to take his hand off the pause button and get Senate Republican Chairmen moving toward agreement with their House counterparts.”
Pelosi also pushed President Donald Trump’s administration for a response on the national coronavirus testing strategy—an issue that fell in the spotlight last week as the two sides of the aisle couldn’t reach an agreement on specific language related to the provision.
Both Pelosi and Mnuchin have pinned the blame on the other for no progress on the next emergency funding stimulus bill, which has likely curbed a smooth economic recovery, as more small businesses permanently shuttered, millions of Americans filed for unemployment and families fellow below the poverty line as the CARES Act relief dried out.
“A delayed (or no) deal means that the labor market recovery will stall and that unemployed workers, firms in the industries most affected by the public health crisis... and state and local governments will face unnecessary financial dire straits,” Stan Veuger, a resident scholar in economic policy studies at the American Enterprise Institute (AEI), said.
Desmond Lachman, a resident fellow also at AEI, echoed Veuger’s concerns, noting “Such a delay would be very bad for the economic recovery, which is already showing signs of slowing down and which is now going to be seriously challenged by what health experts are calling a dark Covid-19 winter.” Lachman emphasized that the unemployed and small businesses will be the hardest hit without added federal relief.
But the letter clashes with the speaker’s optimism from last week when she wrote to House Democrats, “I remain hopeful that we can reach an agreement before the election. It will be safer, bigger, and better, and it will be retroactive.”
Economists expressed doubt that the two will strike a deal before and even after November 3, especially in the event of a contested election.
“It is also highly unlikely that we will have a breakthrough immediately after the election especially if we have a contested election. With the elections out of the way, neither side will be inclined to make the necessary compromises,” Lachman said. “This very likely means that the earliest we will get a fiscal stimulus package in place will be after January ‘20 when a new Congress and a new Administration begins.”
“My guess would be that if Trump loses, supporting a bill becomes (even) less attractive to most Senate Republicans, both because some senators will want to position themselves for the 2024 Republican primary and because they are less likely to want to jump start the Biden economy,” Veuger said.
Negotiations between Pelosi and Mnuchin have been on and off for months, with the Democratic House passing two multi-trillion-dollar proposals—both rejected by top White House aides and Senate Republicans. Mnuchin shot back with a GOP counter-offer of a $1.8 trillion package that embraced some Democratic provisions but that also got blocked.
The offers come as Trump halted coronavirus stimulus talks, but then pressed the administration to accept an even larger deal than what Democrats requested—a demand that’s balked fiscal conservatives in the Senate.
“After the election, we’ll get the best stimulus package you’ve ever seen,” the president promised on Tuesday.
“I continue to be surprised by how little focus there is in these negotiations, particularly on the Republican side, on getting the public health crisis under control,” Veuger said. “The White House has surrendered to Covid, I suppose, but you’d think at least a few Republican senators would try to lead on this.”
Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill.