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October 12, 2020

What Is The Latest On U.S. COVID Relief Bill Negotiations?

After a week of intense uncertainty, CNBC reported late in the evening on October 8 that U.S. Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi (D-Calif.) resumed discussions regarding a new coronavirus relief package.

Negotiations surrounding this legislation have been happening since early summer.

Speaker Pelosi and Secretary Mnuchin talked for 40 minutes about the prospect of a “comprehensive bill,” Pelosi spokesman Drew Hammill tweeted after the speaker rejected Trump’s suggestion of stand-alone bills to help struggling airlines and sending checks to individual Americans.

The White House last week said it is willing to accept legislation with total spending up to about $1.9 trillion. Democrats want around $2.2 trillion. Ultimately that $300 billion difference meant last Thursday’s breakthrough was short-lived.

According to The Wall Street Journal, on Saturday, October 10, Republican lawmakers told the White House they would not vote for a $1.9 trillion package. The next day, Speaker Pelosi told fellow House Democrats in a letter that negotiations with the White House on a new round of coronavirus relief “remain at an impasse” and that the White House’s $1.9 trillion proposal was “grossly inadequate,” partly because it did not include the $75 billion and a new national plan for testing, tracing, and virus treatment that Democrats want.

The back and forth over the weekend came after a tumultuous and confusing few days. Earlier in the week, Speaker Pelosi and Secretary Mnuchin discussed the aid package, but couldn’t find a compromise between the GOP’s $1.6 trillion proposal and the $2.2 trillion package House Democrats have approved.

The business community has continued to make the case for an aid package, and the news that negotiations had restarted came after the U.S. Census Bureau announced that 60 million American households are expected to lose income in October and as The Wall Street Journal reported more than 55 percent of economists think the United States will not recover jobs lost to the coronavirus until 2023 or later.

The continuation of negotiations also came after Federal Reserve Chairman Jerome Powell warned in a speech on October 6 of a “tragic” scenario if Congress did not agree to a new funding package. Chair Powell said inaction “could continue to exacerbate existing disparities in our economy,” including a downward spiral of layoffs, household insolvencies, and business bankruptcies.

Earlier in the week, President Trump told Secretary Mnuchin to halt negotiations with House Democrats. Then President Trump reversed course and called on Congress, via Twitter, to immediately approve standalone relief bills to provide $25 billion for the airlines, another round of individual stimulus checks for qualified Americans, and “immediate aid,” in the form of $135 billion for the U.S. Small Business Administration’s Paycheck Protection Program (PPP).