Nancy Pelosi, the Democratic Speaker of the House of Representatives, rejected a higher $ 1.8 billion fiscal stimulus offer from the White House, dashing hopes for a breakthrough in the negotiations.
In a letter to Democratic lawmakers on Saturday, Pelosi said the Trump administration’s latest proposal marked “one step forward, two steps back” and that there were “disagreements on many priorities” to bring more government relief to the US economy.
“When the president talks about wanting a bigger relief program, his proposal seems to mean he wants more money at his discretion to grant or withhold, rather than accepting language prescribing how we honor our workers, crush the virus and invest in the pockets of workers, ”Ms. Pelosi wrote.
Economists and investors have been watching the fate of the stimulus talks in Washington closely, as a deal could help support the recovery in the months to come. Failure to strike a deal risks stalling or reversing the rebound.
Ms Pelosi and Steven Mnuchin, the US Treasury Secretary, tried to strike a deal ahead of the election, but struggled to find a compromise. Democrats have proposed – and passed legislation in the House – to pump an additional $ 2.2 billion in spending into the economy, but Republicans and the Trump administration have wavered at the size of the package.
On Tuesday, US President Donald Trump suddenly ordered Mr Mnuchin to withdraw from the talks, but following a strong backlash he turned the tide and made a new push for a deal, saying he was ready to pass a big budget stimulus bill. The $ 1.8 billion offer made on Friday is well above what many Republican lawmakers who control the Senate would find acceptable, but Ms Pelosi said it was still insufficient.
In her letter, the President of the Democratic House said that the White House still had not included enough provisions for the testing and testing of coronaviruses, and worker safety protections. She said spending on child care was insufficient and the White House was resisting tax credits for the poorest families. Ms Pelosi added that Trump’s proposal for federal unemployment benefits remained $ 200 billion below Democrat-backed levels.
However, Ms Pelosi did not entirely rule out the possibility of a deal. “Despite these unresolved concerns, I remain hopeful that yesterday’s developments will bring us closer to an agreement on a relief plan that addresses the health and economic crisis facing American families.
“Like I said before, the devil and the angels are in the details,” she said.
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While there is a consensus between the White House and Democrats on sending a further round of up to $ 1,200 in direct payments to individuals, the slow pace of negotiations means that it is less and less likely. that they reach households before the November 3 elections.
Alec Phillips, a policy analyst at Goldman Sachs, wrote on Friday that the Trump administration’s “renewed urgency” had led to a “real narrowing of positions,” but a deal was still unlikely. “For now, we still think the odds are against a substantial pre-election stimulus, even though the situation is more murky than it seemed just days ago,” Phillips said.