Bipartisan stimulus talks broke down on Capitol Hill on Friday, and White House negotiators said they would urge Donald Trump to take unilateral action to “alleviate some of the pain” Americans are feeling.
Discussions ended shortly after Democratic leaders in Congress said Republicans had refused to meet them halfway on the size of the proposal. Mr Trump also has rejected Democratic calls for nearly $1tn in support for state and local authorities, calling them bailouts for badly run governments.
The impasse comes a week after the expiration of supplemental federal jobless benefits, which had put an extra $600 a week in the pockets of millions of Americans who have become unemployed during the coronavirus pandemic, helping them cover food, rent and other living expenses.
“The president would like us to make a deal. But unfortunately, we did not make any progress today,” said Steven Mnuchin, Treasury secretary.
He said he and Mark Meadows, White House chief of staff, would recommend that Mr Trump move ahead with executive orders that extend protections for renters, continue the suspension of monthly student loan payments and reauthorise the lapsed emergency unemployment benefits.
Mr Meadows said the orders would “alleviate some of the pain that people are experiencing”. Earlier on Friday, the labour department reported that the US unemployment rate was 10.2 per cent last month.
Mr Mnuchin said it would “take a little bit of time” to finalise the orders, but he would recommend the president “move forward” over the weekend. Republicans and Democrats alike have raised questions over whether the president has the legal authority to act on issues such as unemployment insurance without the agreement of Congress.
Nancy Pelosi, the Democratic speaker of the House, and Chuck Schumer, the top Senate Democrat, called Friday’s meeting “disappointing” and accused Republicans of having a “my way or the highway attitude”.
Mr Mnuchin said he was open to “new proposals” from Democrats, but that the two sides were still far apart on funding for state and local governments, as well as how to extend the additional unemployment benefits.
“If we can reach an agreement on state and local and unemployment, we can reach an overall deal, and if we can’t, we can’t,” Mr Mnuchin added.
Mr Trump, who spent Friday at his golf course in Bedminster, New Jersey, said on Twitter: “Pelosi and Schumer only interested in Bailout Money for poorly run Democrat cities and states. Nothing to do with China Virus! Want one trillion dollars. No interest. We are going a different way!”
Both Republican and Democratic governors and mayors have pleaded for more federal support, saying their budgets are under strain from a combination of lower tax revenues and higher healthcare costs as a result of the Covid-19 pandemic.
Mr Mnuchin and Mr Meadows have met daily on behalf of Mr Trump with Ms Pelosi and Mr Schumer for nearly two weeks. Mitch McConnell, the Senate Republican leader, has not taken part in the talks.
Earlier on Friday, top Democrats said their offer to cut their stimulus proposal by $1tn was rebuffed by the White House.
“Yesterday I offered to them, we will take down a trillion, if you add a trillion in,” Ms Pelosi said. “They said absolutely not.”
The Democratic-controlled House of Representatives three months ago passed a $3.4tn stimulus bill, which the Republican-controlled Senate refused to consider. More recently, Republicans have put forward proposals for about $1tn in stimulus, which Democrats said they would not support.
In a letter to Democratic lawmakers on Friday morning, Ms Pelosi said “many critical differences” remained, pointing to Democrats’ demands for more money for state and local governments, low-income Americans relying on food benefits and coronavirus testing and contact tracing.
Ms Pelosi also said the two parties were at odds over extra funding for the US Postal Service, which she said was “central to the life of our democracy” in an election year when many Americans will be voting by mail.
Mr Mnuchin and Mr Meadows made no mention on Friday of a payroll tax cut, something that Mr Trump has called for repeatedly, even though both Republican and Democratic lawmakers have rejected it. Payroll taxes are used to finance social insurance programmes such as social security and Medicare.
Gene Sperling, an economist who held senior positions in the Obama and Clinton administrations, said Mr Trump’s plan “looks untenable, illegal and disastrous in its impact”.
He said a payroll tax cut would be “the singular worst example, maybe in our history, of a president doing a raid on social security and Medicare finances to help fund a tax relief, much of which would go to large companies, that both parties in both houses have rejected”.
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