Sides remain at impasse on relief package

Prospects for reaching aid deal this week seen as dim

House Speaker Nancy Pelosi of Calif., center, accompanied by Senate Minority Leader Sen. Chuck Schumer of N.Y., left, speak to reporters following a meeting with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows as they continue to negotiate a coronavirus relief package on Capitol Hill in Washington, Friday, Aug. 7, 2020.
House Speaker Nancy Pelosi of Calif., center, accompanied by Senate Minority Leader Sen. Chuck Schumer of N.Y., left, speak to reporters following a meeting with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows as they continue to negotiate a coronavirus relief package on Capitol Hill in Washington, Friday, Aug. 7, 2020.

WASHINGTON -- President Donald Trump and top Democrats in Congress began the week unable to agree on how to move forward with negotiations on another economic stimulus package after a weekend in which the president stretched the bounds of his executive powers and ordered a patchwork of coronavirus relief measures.

The disconnect boded poorly for a comprehensive deal being reached this week, with most lawmakers now scattered across the country, leaving the states, businesses and millions of unemployed Americans grappling with how to proceed with more limited government support.

Monday brought no new talks between Trump's team and negotiators on Capitol Hill.

The two sides are stuck on how big an infusion the economy needs. The Democratic-led House in May approved a $3.4 trillion measure, arguing that the toll of the pandemic warranted another extensive infusion into the U.S. economy even after the government rapidly deployed nearly $3 trillion in early spring. Republicans, particularly in the Senate, delayed drafting their own proposal, in part because of stark divisions over how much more money is needed. They continue to advocate for a narrow proposal.

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On Monday, Trump, who has largely sidelined himself during talks on Capitol Hill, proclaimed that his gambit to obtain more leverage in the talks had been a success, claiming that Sen. Charles Schumer, D-N.Y., the minority leader, and House Speaker Nancy Pelosi, D-Calif., "want to make a deal."

But top congressional Democrats said they had not reached out to the White House since their last meeting Friday with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows. The meeting ended without an agreement, and the two administration officials declared that they would recommend unilateral executive action.

"Fables from Donald Trump," Schumer said on MSNBC, arguing that Republicans needed to return to the negotiating table and find a middle ground between the legislation the House approved in May and the Republican bill unveiled late last month. "That's what he seems to specialize in. I didn't call him. Speaker Pelosi didn't call him."

The measures Trump signed Saturday were meant to revive unemployment benefits, address evictions, provide relief for student borrowers and suspend collection of payroll taxes after two weeks of talks between congressional Democrats and administration officials failed to produce an agreement on a broader relief package.

The president's unilateral actions have come under intense criticism from Democrats, who argued that Trump overstepped the limits of his executive authority, and from at least one Republican, Sen. Ben Sasse of Nebraska, who deemed the unilateral lawmaking "unconstitutional slop." Trump fired back at Sasse on Monday, dismissing him as a "Republican in Name Only" who had "gone rogue, again."

"This foolishness plays right into the hands of the Radical Left Dems!" Trump said on Twitter.

SIGNAL FROM MNUCHIN

In an interview with CNBC on Monday, Mnuchin declined to comment on the specifics of the logistics of the negotiations but said that the White House remained ready to make a deal. He urged Democrats to consider a limited package focused on areas of agreement such as funding for schools.

"There's a deal to do if the Democrats are reasonable and want to compromise," Mnuchin said. "If their attitude is we'd rather give you nothing than agree on things, then we're not going to get a deal."

Democrats have repeatedly insisted that they would not accept anything less than a broad relief package because of the devastating toll of the pandemic.

"I consider a short-term bill a missed opportunity to do everything in our power to stop this pandemic," Pelosi said in an interview Friday, ticking off a number of issues, including funding for the general election in November and the Postal Service, that she said she considered important priorities for Democrats given the pandemic.

The Treasury secretary said that demands from Democrats to provide $1 trillion in support to states remained a nonstarter, but he argued that the federal government would help states that say they cannot afford to provide additional enhanced jobless benefits to unemployed workers. The weekly $600 payments added to unemployment checks, which were part of the $2.2 trillion stimulus law, were paid entirely by the federal government. Those payments expired last month.

Mnuchin did signal that Republicans were willing to spend more than $1 trillion on a relief package but dismissed the notion of just splitting the difference with the Democrats' $3.4 trillion legislation. In recent days, Pelosi and Schumer have said they would reduce their offer by $1 trillion -- provided that Republicans agree to double their own $1 trillion opening offer -- and have urged administration officials to return to the negotiating table.

"We're not stuck at the trillion dollars, but we're not going to go to unlimited amounts of money to do things that don't make sense," Mnuchin said.

Senate Majority Leader Mitch McConnell accused the Democrats of "hostage taking."

The GOP leader, who has chosen to stay on the sidelines in the talks, has a weakened hand because unlike the Democratic leaders, who have most of their rank-and-file behind them, his Republican majority is fractured. Almost half the GOP senators prefer no new aid at all.

"Democrats think they smell an opening," he said.

MEADOWS' ROLE

In previous coronavirus relief negotiations this year, the administration and senior congressional officials moved with alacrity to enact more than $3 trillion in aid to combat the crippling economic and health effects of the expanding pandemic.

Yet in these latest negotiations, according to Democrats, the presence and influence of Meadows, Trump's fourth White House chief of staff, significantly complicated matters. They said they could work with Mnuchin, whose relative ease at deal-making with Pelosi and Schumer also opened him up to grumbling from Republicans who deemed him too eager to reach an agreement more beneficial to Democrats than to the Republican Party.

Meadows, according to his public statements, has held a pessimistic view from the outset about the prospect for an agreement with Congress. He argued in public and in private that Democrats were not serious about making a deal, but in Democrats' telling it was Meadows more than anyone else who was responsible for their failure to deliver on this round of talks.

"His positions are quite hardened and non-compromising, more so than Mnuchin," Schumer told reporters Friday. Schumer contended that in the case of Meadows and others who follow small-government tea party tenets, "Ideology sort of blinds them."

For two weeks, the four chief negotiators have struggled to agree even on an overall price tag for the next phase of coronavirus relief, much less the fine print of the aid package. Mnuchin has emerged from talks hopeful, pointing out areas of agreement. Meadows, however, has often emerged from discussions and emphasized to reporters how poorly talks were going and how far apart both sides were.

A senior administration official disputed the Democrats' complaints about Meadows' role, calling it "comical" to suggest that he or anyone else in the administration did not want a deal. Instead, this person said, Democrats were to blame.

GOVERNORS WEIGH IN

State and local government officials across the U.S. have been on edge for months about how to keep basic services running while covering rising costs related to the coronavirus outbreak as tax revenue plummeted.

The stall in negotiations for the next stimulus bill raises the prospect of more layoffs and furloughs of government workers, and cuts to health care, social services, infrastructure and other core programs. Lack of money to boost school safety measures also will make it harder for districts to send kids back to the classroom.

On Monday, governors, lawmakers, mayors, teachers and others said they were going to keep pushing members of Congress to revive talks on another rescue package.

"Congress and the White House made a commitment to the governors that there would be a second round of relief for states -- we are going to hold their feet to the fire until they uphold that commitment," New Hampshire Gov. Chris Sununu, a Republican, said in a statement.

One measure the president signed Saturday repurposed other federal funds, including from a pot of disaster relief aid, to create a $400-a-week bonus payment as part of unemployment aid. That payment, however, is contingent on states providing $100 per week and establishing an entirely new program -- called a "lost wages assistance program" -- to distribute the aid.

New Jersey Gov. Phil Murphy, a Democrat, urged Congress to restart negotiations, boost the jobless benefit back to $600 and immediately provide more aid to state and local governments.

"Let's be clear about something: States are going broke and millions of Americans are unemployed, yet the solution called for states to create a new program we cannot afford and don't know how to administer because of this uncertainty," he said.

Mnuchin, on a conference call with governors on Monday, said action by Congress remains the administration's "first choice."

Mnuchin and Vice President Mike Pence urged the governors to reach out to congressional leaders and push for legislation, according to audio of the call obtained by AP.

"Anytime they want to meet -- and they're wiling to negotiate and have a new proposal -- we're more than happy to meet," Mnuchin said later at the White House. He confirmed he has not spoken to the Democratic leaders since talks collapsed Friday.

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Many states already are staring at ledgers of red ink. Texas is projecting a $4.6 billion deficit. In Pennsylvania, it's $6 billion. In Washington state, the deficit is expected to be nearly $9 billion through 2023. California's budget includes more than $11 billion in cuts to colleges and universities, the court system, housing programs and state worker salaries.

The pandemic's fallout also has trickled down to towns and cities, many of which are considering layoffs of police, firefighters and other essential workers. The association representing municipal governments in California said 90% of the state's 482 cities will have to cut staff positions or services.

Information for this article was contributed by Alan Rappeport and Emily Cochrane of The New York Times; by Geoff Mulvihill, Lisa Mascaro, Scott Bauer, Adam Beam, Don Thompson, Mike Catalini, David Eggert, Rachel La Corte, Marc Levy, David A. Lieb, Holly Ramer, Gary Robertson, Paul Weber and Alan Suderman of The Associated Press; and by Seung Min Kim, Erica Werner and Josh Dawsey of The Washington Post.

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