Moneybox

Take the Deal, Madame Speaker

Before Trump blew up and restarted negotiations, the White House proposed a $1.6 trillion relief deal. Nancy Pelosi should offer to take it.

Nancy Pelosi, wearing a mask and gesturing with her hands, speaks at a press conference on Capitol Hill on Thursday
It’s time to take a deal. Tasos Katopodis/Getty Images

It’s time for Nancy Pelosi to stop playing hardball.

It gives me no pleasure to say so. Like many progressives, I’ve taken a lot of delight in watching the House speaker and her fellow Democrats stand their ground these past few months as they’ve negotiated with the White House (and, more indirectly, with feckless Senate Republicans) over the next batch of coronavirus aid. Unlike previous rounds of relief talks, where they were willing to give up key demands in the name of passing something to avert looming catastrophe, Pelosi and company have simply refused to cave on issues like providing support to state and local governments, working from the premise that, this time around, a bad bill would be worse than no bill at all.

But now time is running out, and discussions appear to be just barely hanging on to the rails. Last week, Pelosi rejected a $1.6 trillion offer from the White House. The sides seemed ready to continue haggling afterward. But on Tuesday, Donald Trump abruptly announced that he was pulling the plug on talks until after the election, and told Senate Republicans to focus in the meantime on confirming Judge Amy Coney Barrett to the Supreme Court.

The president, who is battling COVID-19 and probably hopped up on steroids, later backpedaled on this seemingly impulsive decision, perhaps because he noticed stocks plummet in response. On Twitter Tuesday evening, he demanded that Congress pass individual bits of relief legislation that he would support, like a new batch of $1,200 checks to Americans. But that idea went precisely nowhere. (“There is no stand-alone bill without a bigger bill,” Pelosi told reporters. “It’s not going to happen.”) And now, the president seems to be feeling some regret: He’s reportedly told House Minority Leader Kevin McCarthy that he once again wants a big deal, and Pelosi and Treasury Secretary Steve Mnuchin are back to discussing whether a comprehensive agreement might be possible.

At this point, the speaker might be tempted to just let negotiations languish or die off entirely for the next 26 days until Americans have voted. After all, the politics of all this are absolutely abysmal for the president, who—let’s say it again—got loaded on meds and publicly ordered his party to spend its time hustling his Supreme Court nominee onto the bench instead of doing something to help struggling families and businesses in the middle of a pandemic, before impotently wailing for Democrats to just pass the parts of a bill he likes, and is now presently in the mood to negotiate again. He looks, in short, like an erratic moron whom nobody in their right mind would want to deal with, which can’t possibly help his poll numbers. But the right thing to do—the responsible thing to do—at this point would be for the speaker to accept the $1.6 trillion that was on the table last week, or something just north of it. Democrats, once again, regrettably, need to be the adults.

Why buckle now? First, because Donald Trump is an impetuous and spiteful jerk who could change his mind about wanting a deal at any moment. And if there isn’t an aid package before the election, there might not be one after the election, either. Let’s say Joe Biden wins the presidency. Do you think Mitch McConnell and the GOP will feel like doing him a solid by passing something during the lame-duck session? I doubt it—in which case, the earliest help for Americans will come is January, almost four months from now. And if Democrats fail to take the Senate? I don’t even want to contemplate what happens then.

Should Washington fail to provide more relief, many people are going to suffer through a bleak and penniless winter. Up until now, the coronavirus crisis has done less economic damage than many feared, in large part thanks to the rescue package Congress passed in March. But that aid has largely run dry and the recovery has started to slow. Cold weather is about to kill off activities like outdoor dining and drinking. Without government support, failing businesses are going to spend the next several months laying off their workers, many of whom won’t be able to pay their bills with the unemployment benefits now on offer.

Even if Biden is able to pass his own recovery legislation in January, Democrats still have a political interest in making sure the transition to his presidency doesn’t become a frigid period of economic hardship. The more businesses that fail during that time, the more temporary layoffs will become permanent, and the longer it will take for the economy to recover during his first term. Some, like New York magazine’s Josh Barro, have suggested that Biden could create an ersatz stimulus effect as president-elect by announcing his plans for a relief package, which could give employers and households a chance to plan accordingly. But that won’t solve the fundamental problem that a lot families and businesses are simply going to be out of cash.

As for the White House’s $1.6 trillion bid: It actually wasn’t terrible. Yes, Pelosi slammed it. (“This isn’t half a loaf,” she told reporters. “What they’re offering is the heel of the loaf.”) It was smaller than the $2.2 trillion piece of legislation Democrats wanted, down from the $3.4 trillion they packed into the original HEROES Act back in May. But based on press reports describing its contents, Mnuchin’s offer was fairly substantial. (I asked Pelosi’s office to confirm whether those summaries were in fact accurate, but it did not respond.)

Take unemployment benefits, an issue that long divided Democrats and Republicans. Pelosi wanted to extend $600-a-week unemployment benefits until the end of January. Mnuchin proposed $400 a week until the beginning of January. Sure, it’s a lower number. But it would still be more than enough to cover all of the income of many of the low-wage service workers who’ve been hit hardest by this recession have lost from their old jobs.

Or take state and local aid, perhaps the single biggest sticking point in negotiations. Pelosi wants $436 billion. Mnuchin offered $250 billion. The Democrats’ number is probably closer to what’s needed long-term; one of the most in-depth recent forecasts of the fiscal pain states are confronting suggests that they could face $467 billion in revenue shortfalls from 2020 through 2022 (that number could be lower if unemployment falls quicker than anticipated, or higher if a second wave of COVID shuts the economy back down in the winter). But half of what’s needed is certainly better than nothing, especially if a Biden administration is in a position to pass more aid down the line.

Beyond those contentious issues, Mnuchin’s offer reportedly included another batch of stimulus checks, $160 billion to re-up the Paycheck Protection Program for small businesses, $60 billion in aid to renters and homeowners, $150 billion for schools, funding for a test-and-trace regime, money to bail out restaurants, entertainment venues, and airlines, and more. Going into these negotiations, Democrats needed to avoid passing a weak bill that would help Donald Trump politically more than it would actually help families, businesses, and states. Assuming the descriptions of it in the media were accurate, Mnuchin’s offer wasn’t that; it was, in fact, much better than the heel of a loaf.

Whether that package could ever make it through Congress is less obvious. There are some Senate Republicans who are against passing any additional aid at all, and many members expressed unease about its price tag. When Senate Finance Committee Chair Chuck Grassley was asked whether he’d back it, he responded, “No.” Presumably, this legislation would have to pass through the chamber, and McConnell’s gritted teeth, with Democratic votes.

It’s also unclear what would actually happen if Pelosi backtracked and tried to accept Mnuchin’s previous offer at this point. Trump seems to be a bit panicked and in the mood for a deal now. If Pelosi said yes, would his irrepressible instinct to try and own the libs kick in? Who knows. But it’s worth a shot. She could maybe even demand an extra $50 or $100 billion for states, just to compensate for the last week of political nuttery. And if the administration rejects the olive branch, it’s on them. Likewise, if McConnell decides he wants to snuff the package out in the Senate, then Republicans can answer for their actions.

Pelosi and the Democrats seem to have begun these talks assuming they could take a hard line in part because they believed there was no way the president would be irrational enough to endanger his reelection chances by walking away without a deal. Given Trump’s thrashing about these last few days, that may or may not have turned out to be a good bet. But for the sake of the country, it’s time to make one last compromise, and say yes to a deal that’s just good enough.

Besides, does anyone still think a relief bill with a few checks is going to be what saves this combusting oil tanker of a presidency?