President Trump on Tuesday broke off negotiations with Democrats on a coronavirus relief deal until after the Nov. 3 election, rejecting the latest $2.2 trillion proposal from House Speaker Nancy Pelosi.
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“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump tweeted, one day after returning to the White House from Walter Reed National Military Medical Center, where he was being treated for COVID-19.
If the White House follows through and pauses negotiations, it would put at risk potentially trillions of dollars in aid for families, businesses and the U.S. economy, including a fresh round of $1,200 stimulus checks, extra unemployment aid for millions of out-of-work Americans, funding for coronavirus testing and contact tracing and relief for cash-strapped state and local governments.
Treasury Secretary Steven Mnuchin and Pelosi spoke for an hour on Monday and again briefly via phone on Tuesday, during which Mnuchin confirmed that Trump had called off negotiations, according to a tweet from Pelosi's deputy chief of staff, Drew Hamill. Pelosi "expressed her disappointment in the president's decision," Hamill said.
In a statement responding to Trump's tweets, Pelosi said the president had "showed his true colors: putting himself first at the expense of the country."
“Walking away from coronavirus talks demonstrates that President Trump is unwilling to crush the virus, as is required by the Heroes Act," she said. "He shows his contempt for science, his disdain for our heroes – in health care, first responders, sanitation, transportation, food workers, teachers, teachers, teachers and others – and he refuses to put money in workers’ pockets, unless his name is printed on the check.
Just three days ago, Trump -- from the presidential suite at Walter Reed -- urged the two sides to "WORK TOGETHER AND GET IT DONE."
But Trump instead said that he had asked Senate Majority Leader Mitch McConnell to "focus full time" on confirming Judge Amy Coney Barrett to the Supreme Court.
"Our Economy is doing very well. The Stock Market is at record levels, JOBS and unemployment also coming back in record numbers," he wrote. "We are leading the World in Economic Recovery, and THE BEST IS YET TO COME!"
Negotiations collapsed in early August, prompting Trump to sign four executive measures intended to provide relief to families still reeling from the virus-induced crisis, including temporarily extending supplemental jobless aid at $300 a week.
But that aid is beginning to expire, and lifelines that propped up the economy in the early weeks of the pandemic — like the $670 billion Paycheck Protection Program, a one-time $1,200 stimulus check and sweetened unemployment benefits — lapsed weeks ago.
Although Democrats and Republicans broadly agree that another bill is necessary to aid the economy's recovery, they sharply disagree over the size and scope of it. House Democrats passed a $2.2 trillion aid package last week, while the Trump administration countered with a $1.6 trillion offer. Pelosi rejected that as "inadequate."
Democratic leaders have accused Republicans of underestimating the severity of the crisis, while Republicans accused Democrats of using the aid package as a way of passing their "liberal wishlist" and ignoring the nation's ballooning deficit, which is projected to hit a record-shattering $3.3 trillion this year, according to the Congressional Budget Office.
Trump's announcement came just hours after Federal Reserve Chairman Jerome Powell urged lawmakers to provide the pandemic-stricken economy with more fiscal support in order to sustain the nation's early recovery.
“Even if policy actions ultimately prove to be greater than needed, they will not go to waste," Powell said Tuesday in a prepared speech to the National Association for Business Economics. "The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods."
Powell said the economic rebound that began in May was buoyed in large part by the $2.2 trillion aid package that Congress passed at the end of March, which included sweetened unemployment benefits, a one-time stimulus check and targeted aid for small businesses.
But the recovery has moderated in recent months, he said, and there is a risk the rapid initial gains may transition to a "longer-than-expected slog back to full recovery as some segments struggle with the pandemic's continued fallout."
A new report released by the Labor Department last week showed the economy added 661,000 jobs last month and the jobless rate fell to 7.9%, indicating the labor market's recovery is beginning to plateau.
There are still roughly 10.7 million more out-of-work Americans than there were in February before the pandemic hit.