President Trump on Wednesday backed up his position that the government should supply aid to the economy by pressing for $1,200 stimulus checks and a new wave of aid for airlines and other businesses hard hit by the pandemic.
House Speaker Nancy Pelosi has rejected such piecemeal entreaties all along. On Wednesday, she still appeared to take an “all or nothing” approach, preferring to deepen economic suffering in the U.S. to passing a series of compromise bills.
On Wednesday, Pelosi appeared to take a swipe at Trump’s health, implying that his bout with the coronavirus has damaged his mental health by calling his decision to end talks with her “erratic” and saying that “it’s hard to see any clear sane path in anything that he’s doing.”
Trump launch a battalion of tweets Tuesday night and Wednesday morning in which the president pressed for passage of the assistance piece by piece after talks over a comprehensive aid bill fell apart following months of intransigence by Speaker Pelosi. Democrats have been unwilling to compromise to pass legislation that did not include measures that Republicans find unacceptable, including bailouts to states and aid to illegal aliens.
Trump’s new approach is consistent with his long-standing objection to “omnibus” bills. Pelosi has insisted that any bill include a full-range of giveaways to the coalition of special interests that Democrats depend upon to maintain their majority position in the House and possibly deliver the White House and Senate in November. Any smaller bill that the one passed this summer by the House would necessarily result in less of a spending increase to some parts of that coalition, possibly diminishing their support for Democrats in November.
Trump called on Congress to send him a “Stand Alone Bill for Stimulus Checks ($1,200)” — a reference to a preelection batch of direct payments to most Americans that had been a central piece of negotiations between Pelosi and the White House.
“I am ready to sign right now. Are you listening Nancy?” Trump said on Twitter Tuesday evening. He also urged Congress to immediately approve $25 billion for airlines and $135 billion for the Paycheck Protection Program to help small businesses.
The stock market fell after Trump pulled the plug on the talks but was recovering in morning trading Wednesday after he floated the idea of piecemeal aid. The mainstream media largely mischaracterized Trump’s decision to end talks on the comprehensive bill as derailing the possibility of stimulus before the election. In truth, it was never likely Pelosi would agree to a deal before the election decided who will occupy the White House and which party will control the Senate.
Trump’s decision to scuttle talks between Treasury Secretary Steven Mnuchin and Pelosi came after the president was briefed on the landscape for the negotiations — and on the blowback that any Pelosi-Mnuchin deal probably would have received from his GOP allies in Congress.
“It became very obvious over the last couple of days that a comprehensive bill was just going to get to a point where it didn’t have really much Republican support at all,” White House chief of staff Mark Meadows said Wednesday on Fox News. “It was more of a Democrat-led bill, which would have been problematic, more so in the Senate than in the House.”
Trump’s withdrawal from the talks came immediately after he spoke with the GOP leaders in Congress, Many Republican senators had signaled they would not be willing to go along with any measure that topped $1 trillion, and GOP aides had been privately dismissive of the prospects for a deal. Any Pelosi-sponsored agreement of close to $2 trillion raised the potential of a GOP revolt if such a plan came to a vote.
Sowing division among Republicans, and especially between the Trump administration and the Senate GOP majority, has been a long-running goal of Democratic strategists. Republican strategists believed that approving the $2.2 trillion aid bill passed by the House Democratic majority would make a mockery over GOP claims that holding the Senate would check the radicalism of the House.
Pelosi’s personal animosity toward Trump was on display when she told reporters that “all the president wants is his name on a check” for direct aid payments.
Pelosi and Mnuchin talked briefly on Wednesday morning about the chances for a stand-alone airline rescue, Pelosi spokesman Drew Hammill tweeted. Pelosi directed Mnuchin to a measure she had attempted to pass on Friday on short notice under fast-track procedures, but only after Democrats made a number of changes Republicans did not like.
The talks have been troubled from their start in July and never appeared to close in on an agreement both sides could embrace.
Pelosi had been demanding a host of Democratic wins on food aid, unemployment benefits, help for renters and homeowners, and aid to state and local governments. Republicans charged she was dragging the talks to deny Trump a political victory before the Nov. 3 election.
Early rounds of virus aid passed by overwhelming margins as the economy went into lockdown in March. After that, Trump and many of his GOP allies focused on loosening social and economic restrictions as the key to recovery instead of more taxpayer-funded help.
The economy has recovered more quickly than most economists had expected. That is partly because of the aid Congress approved in a $2 trillion package in March. The $1,200 stimulus checks, supplemental $600 unemployment benefits each week, and aid to small businesses boosted household incomes and enabled many low-income Americans to pay bills and rent and maintain their overall spending, according to data from Opportunity Insights.
It is also due to a greater than expected embrace by consumers of the reopening of the economy despite the ongoing pandemic. Rising infections have not been as much as a drag as many analysts expected.
But the recovery has slowed and certain sectors such as restaurants, hotels, theaters and airlines remain in bad shape, shedding jobs and risking permanent realignment. Without more stimulus, economists expect growth will slow significantly in the final three months of the year.
“You’re going to see quite a significant drag on growth,” said Gregory Daco, chief U.S. economist at Oxford Economics, a consulting firm. It “would really risk a double-dip recession.”
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The Associated Press and AP Economics Writer Christopher Rugaber contributed to this report.