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The Trump administration is stepping back from negotiations on a new stimulus package and leaving it to Senate Majority Leader Mitch McConnell to revive long-stalled talks with House Speaker Nancy Pelosi, according to people familiar with the situation.
While the White House probably would consult with GOP lawmakers on details of a COVID-19 relief bill, it’s now unlikely to take the lead on talks, according to the people, who spoke on condition of anonymity to discuss internal deliberations. The White House would only take over if negotiations have to be restarted completely, the people said.
The White House didn’t respond to multiple requests for comment.
The move greatly diminishes the chances of a trillion-dollar or more stimulus for the U.S. economy before January. President Donald Trump had committed to pursuing a large-scale stimulus after the election, even saying he would approve a $2 trillion bill, but has since focused on attempting to overturn President-elect Joe Biden’s victories in battleground states.
That leaves the negotiations at a stalemate, with neither McConnell nor Pelosi backing away from earlier positions — even as the further spread of the coronavirus threatens to weaken the recovery from earlier pandemic-induced shutdowns.
Federal Reserve Chair Jerome Powell said earlier this month that fiscal stimulus is “absolutely essential” to the U.S. economic recovery. He also has said that even if spending proved more than necessary, it “will not go to waste.”
Treasury Secretary Steven Mnuchin had been leading negotiations with Pelosi, but they hit an impasse before Election Day, with the administration proposing about $1.9 trillion in spending, and Democrats at $2.4 trillion. A welter of policy issues, from aid to state and local governments to a Republican push for liability protections for businesses, also had prevented a deal.
McConnell has continued to insist on a much smaller package of about $500 billion, pointing to signs of a continuing recovery including a slide in the unemployment rate. He also has pointed to encouraging news on a coronavirus vaccine.
“The level at which the economy is improving further underscores that we need to do something at about the amount that we put on the floor in September and October,” McConnell told reporters. “[Democratic leaders] still are looking at something dramatically larger. That’s not a place I think we’re willing to go,” he said.
His office declined to comment about the White House role in the talks.
Senate Minority Leader Chuck Schumer said Nov. 12 that the $2.4 trillion House-passed bill must be the starting point to any new stimulus talks, reinforcing the stalemate with the Senate.
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“We’re at the same place,” Pelosi at a news conference with Schumer. “Even more so with the pandemic because look at these numbers. Look at these numbers. Look at the predictions of the scientific community.”
Pelosi didn’t respond to a question about whether she had spoken to anyone from the administration.
One vehicle for at least some COVID-19 assistance is a vital spending bill that will be needed to avoid the federal government shutting down after Dec. 11, when current funding runs out. House and Senate negotiators are working on an omnibus package that would include appropriations bills for funding through next September.
McConnell said this week he plans to talk to Pelosi about the funding bill soon.
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