No Relief in Sight

Negotiations over the next coronavirus bill have collapsed.

House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer speak to the press after a meeting with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows at the U.S. Capitol on August 7, 2020 in Washington, DC.
House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer speak to the press after a meeting with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows at the U.S. Capitol on August 7, 2020 in Washington, DC. Alex Wong/Getty Images

It was a minor miracle that Democratic leaders and White House negotiators even met Friday afternoon to discuss the stalled coronavirus relief package.

The Thursday evening negotiating sessions between House Speaker Nancy Pelosi, Senate Minority Leader Chuck Schumer, White House Chief of Staff Mark Meadows and Treasury Secretary Steve Mnuchin—their tenth daily meeting in a row—had ended theatrically. According to Pelosi, Meadows had slammed the table in her suite of offices and walked out of the meeting, to which Pelosi said, “You are slamming the table on our children and our schools.” Meadows denied slamming anything, calling the story a “fabrication.”

These were not promising signs that a deal—one day before negotiators’ self-imposed deadline for reaching a tentative agreement and with the sides still trillions apart—was within reach.

It’s been a week since the CARES Act’s enhanced unemployment benefits expired, and two weeks since its eviction moratorium expired. The Paycheck Protection Program, designed to keep small businesses afloat and their employees on board, expires Saturday. The unemployment rate, meanwhile, remains in the double-digits. These deadlines did not sneak up on anyone. The House had passed its sequel to the CARES Act, the $3.4 trillion HEROES Act, in May. But Senate Republicans took a wait-and-see approach until the last minute and, when McConnell finally released his counteroffer, half of his own conference instantly rejected it. With McConnell throwing his hands in the air, the business of propping up the American economy for another few months was left to negotiations between Democratic leaders and Trump’s White House envoys. It’s been a train wreck. Meanwhile, the evictions are set to begin.

But negotiators gave it one last try Friday afternoon. After a swift hour-and-a-half of position reiteration, negotiators came out with the news that there would be no news.

“It was a disappointing meeting,” Schumer told reporters Friday. No progress had been made from the previous evening’s session, in which no progress had been made either. The two sides are at a standstill on both the overall size of the package and the policies within it. It’s not that one side is choosing to walk. Neither has anything else to offer the other.

“I’ve told them, come back when you are ready to give us a higher number,” Pelosi told reporters Friday. Mnuchin and Meadows, meanwhile, said that they’re willing to come back whenever Democrats offer a new proposal on the two most glaring outstanding issues: the extension of enhanced unemployment benefits, which have currently lapsed, and aid to state and local governments.

“I think if we can reach an agreement on state and local and unemployment, we will reach an overall deal,” Mnuchin told reporters, “and if we can’t, we can’t.”

White House negotiators and Senate Republicans have been musing all week that they didn’t think Democrats wanted a deal and were just stringing Republicans along. Democrats, they argued, expected President Trump would take the public blame for any economic catastrophe initiated by the expiration of CARES Act provisions like enhanced unemployment benefits, the Paycheck Protection Program, and eviction moratorium. The politics of no-deal favored them, and Democrats knew it.

The White House tried to temper Democrats’ leverage by presenting an alternative should Congress not reach a deal. The President threatened to take executive action where he could: by scrounging the couch cushions for unused governments funds that could be repurposed to keep some federal unemployment benefits flowing, by deferring payment of payroll taxes, or by offering some kind of eviction relief.

None of these moves, though, would be an adequate replacement for congressional action, so Democratic held their unwavering line for most of the last week. They insisted on a $3.4 trillion package that matched the HEROES Act, including an extension of the full $600-per-week enhanced unemployment benefits through at least the end of the year and about $1 trillion in aid to state and local governments. Pelosi has been in rare, brash form publicly, taunting Republicans as not giving “a damn” about either working people or children, and boasting that “in terms of this legislation, Chuck and I are master legislators.”

But with Pelosi and Schumer starting to face questions about whether they were overplaying their hand, they moved Thursday night: They offered to meet Republicans somewhere in between the two sides’ $1 trillion and $3 trillion positions.

“I said ‘Would you meet us in the middle?’ And they said ‘No, it has to mostly be their way because the President wants it that way,’” Schumer said Thursday night.

Friday’s meeting was a rehashing of that discussion.

“We reiterated in very strong terms our offer,” Schumer told reporters Friday afternoon. “We come down a trillion from our top number, which was $3.4 [trillion]. They go up a trillion, from their top number which was $1 [trillion], and that way, we could begin to meet in the middle. Unfortunately, they rejected it. They said they couldn’t go much above their existing $1 trillion, and that was disappointing.”

Mnuchin, heading into Friday’s meeting, had called a roughly $2 trillion compromise a “non-starter.” Besides, he and Meadows said afterward, they hadn’t even seen a serious Democratic proposal on what that $2 trillion bill would even look like. How would it close the gap between each side’s stance on additional aid for state and local governments which, at the moment, are $150 billion from Republicans and $915 billion for Democrats? What about enhanced unemployment insurance, where Republicans have offered $400 per week to Democrats’ $600?

Republicans also saw Democrats’ offer to cut $1 trillion off their package as little more than a budget gimmick or, as Meadows put it, a “Washington D.C. magical way of saying” they had trimmed their ambitions. That is, the Democrats’ offer is more about adjusting timelines on the expiration dates of certain provisions so that they would cost less on paper, even though Democrats would want to extend them later on. Pelosi basically confirmed this.

“Can we trim back some of the timing that goes for X number?” Pelosi explained her thinking to reporters. “We fully expect to correct some of that in a short period of time, anyway.”

For now, Meadows and Mnuchin said they would urge the president to go ahead with the executive orders he’s been prepping. Neither side, though, sees these as an adequate replacement for Congress’ power of the purse.

“You can’t do unemployment benefits in as good a way as you can legislatively,” Schumer said of the moves Trump was eyeing. “You can’t do a payroll tax cut—which even their own Republicans are against—if you don’t do it legislatively. All these things you can’t do, student loans, some forbearance, if you can’t do it legislatively because you can’t spend the money, as I understand it. You just have to delay it. You think a small business person is going to want to pay 12 months or six months of payroll tax all at once, six months from now?”

‘This is not a perfect answer,” Meadows said. “We’ll be the first ones to say that, but it is all that we can do, and all the president can do, within the confines of his executive power, and we’re going to encourage him to do it.”

Talks may have collapsed for now, but this may not be the final word. At the moment, the White House and the scant Senate Republicans who are open to expensive coronavirus relief legislation say they won’t support any bill that costs $2 trillion or more. At the moment, Democrats say they don’t have the votes for any bill that costs less than $2 trillion. They may each be telling the truth, at the moment. But mass economic calamity, and the pressure that comes with it, has the ability to expand lawmakers’ view of the possible.

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