President Trump on Friday signaled he was ready to forge ahead without Congress to try to address lapsed economic relief measures for millions of Americans, but he stopped short of declaring negotiations dead.
“If Democrats continue to hold this critical relief hostage, I will act under my authority as president to get Americans the relief they need,” Trump said.
Democratic leaders on Friday said the White House refused to meet them even halfway in negotiations, which dragged on for two weeks with little signs of progress. The discussions were meant to provide additional relief to address the coronavirus pandemic’s economic fallout.
At the press conference, Trump said he was preparing to sign executive orders that would pay unemployment benefits through the end of the year, offer eviction protections that have lapsed and also provide student loan relief. He was circumspect on some of the details, though.
For example, he was asked if the government would continue paying the $600 enhanced unemployment benefit that expired last month, and he responded “I won’t say that yet.”
He also said he wanted to sign an executive order that would defer payroll taxes — retroactively — from July through December of this year. It was unclear how this would work and whether taxpayers would end up owing money in back taxes in January.
The talks on Capitol Hill had a dramatic and bitter unraveling. Trump and Democrats have been locked in brinkmanship for years but often found ways to reach agreement on spending packages, including four bipartisan coronavirus relief bills in March and April. This time, there seemed to be little goodwill or trust, and both sides dug in even as the economic recovery showed signs of losing steam, millions of Americans remained unemployed and deaths from the novel coronavirus continued to climb.
Democrats insisted they were still open to negotiations and said they had already tried to make concessions, but White House officials suggested that — absent a dramatically new approach from the Democrats — they were done trying to craft a deal and wanted to move ahead with the executive orders.
“The president would like us to make a deal, but unfortunately we did not make any progress today,” Treasury Secretary Steven Mnuchin said Friday after he and White House Chief of Staff Mark Meadows met for the fifth day in a row with House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles E. Schumer (D-N.Y.) at the Capitol.
“At this point we are going to recommend to the president that over the weekend we move forward with some executive actions,” Mnuchin said.
Among other things, White House officials are looking at moving funds from the Federal Emergency Management Agency into a program that could pay jobless benefits, people briefed on the discussions said.
Democrats said Friday that they had offered to reduce the price tag of their $3.4 trillion bill by $1 trillion, but that administration officials rejected the offer. Republicans dismissed the Democrats’ offer as budget gimmickry because they achieved the price reduction largely by shortening the time frame of proposed benefits, not by reducing specific demands. The Democrats’ demand for nearly $1 trillion in state and local aid remained a major sticking point. Trump has mischaracterized the Democrats’ demand, repeatedly, however, as many states run by Republican governors are also seeking assistance.
“If you’re talking about compromise, even with their trillion-dollar Washington, D.C., magical way of saying they are coming down a trillion, they can’t come up with any significant cuts in their bill,” Meadows said.
Chances for a deal appeared to have all but evaporated and no further meetings were scheduled.
“They said they couldn’t go much above their existing $1 trillion. And that was disappointing,” Schumer said.
“We’re hopeful that they will think about it and come back and tell us they’re willing to meet us halfway,” he said.
Congress has already spent close to $3 trillion this year on its response to the coronavirus pandemic, but many of the most popular programs — such as $1,200 stimulus checks and extra unemployment benefits — have run their course. Democrats and many Republicans agree that more aid is needed but they are split over how to proceed.
Democrats say they cannot accept a bill that provides less than $2 trillion in new spending, while Senate Republicans believe no bill that large can pass their chamber. That left no clear legislative path forward, even as some 30 million jobless Americans have gone two weeks without emergency federal unemployment benefits that expired.
Rather than attempt to negotiate further, the White House now appears prepared to begin rolling out executive actions in coming days. And after toying with everything from a comprehensive bill to a narrow stopgap that would at least extend expired unemployment benefits, Congress now seems poised to do nothing at all.
A Sept. 30 deadline when government funding expires will force another reckoning, but until then lawmakers may just trade blame and accuse each other of intransigence.
There are at least four issues that White House officials have said they’d like to target through executive orders, though the legal standing for such moves without Congress is unclear.
One target is to attempt to provide some relief to jobless Americans whose enhanced $600 weekly unemployment aid expired at the end of last month. White House officials have looked at potentially redirecting money from other programs toward unemployment benefits. Another target is to provide eviction relief for Americans who had been protected by a congressionally authorized eviction moratorium that also expired last month.
The moratorium covered renters who live in homes with federally backed mortgages, which the Urban Institute estimates to be 12.3 million households. Democrats agree the administration can unilaterally extend the eviction moratorium, but argue that is of limited value without providing financial support to renters.
White House officials are also looking to extend student loan flexibility to certain Americans, cognizant that a congressionally approved program for those borrowers expires next month.
White House economic adviser Larry Kudlow also said that Trump is poised to sign executive orders deferring payroll taxes, but the logistics of that are unclear as well. It could not be immediately learned, for example, if Americans would ultimately have to repay any deferred tax cut.
A positive jobs report Friday morning appeared to harden the administration’s posture, with Kudlow pointing to the 1.8 million jobs added in July as evidence of a “self-sustaining recovery.”
Trump and White House officials have been eyeing the possibility of unilateral action all week, and Kudlow confirmed Friday that they were looking at “repurposing” hundreds of billions of dollars that have not yet been spent from earlier coronavirus relief legislation passed this spring.
Democrats insist the White House can’t spend money without approval from Congress, but Trump has pushed the boundaries of executive authority in the past, including his move to declare a national emergency at the U.S.-Mexico border so he could raid Pentagon funds to build his wall.
Kudlow said the executive actions under consideration also include moves to “reform unemployment” by providing a benefit for re-employment and a retention tax credit for employers.
Cutting the 7.65 percent payroll tax, which comes out of workers’ salaries and goes to fund Medicare and Social Security, has been a long-standing goal for Trump. Lawmakers in both parties question the value of such a move, partly because it would do little to help workers who are not actually employed.
Schumer, Pelosi, Meadows and Mnuchin have met almost a dozen times in the past two weeks, often at length, including a three-hour meeting Thursday night. Despite small signs of incremental progress, the atmosphere had grown increasingly strained and the discussions produced no results.
Before Friday’s meeting even started, Schumer and Pelosi heaped insults on Republicans in general and Meadows in particular, in comments that did not seem designed to engender fruitful negotiations.
“Basically, what’s happening is Mr. Meadows is from the Tea Party ... and they don’t want to spend the necessary money,” Schumer said of the former North Carolina congressman, who was a leader of a faction of anti-spending conservatives when he served in the House.
Pelosi said for the second day in a row that Republicans don’t give “a damn” about people in need.
For their part, Republicans accused Democrats of trying to get a political outcome instead of a deal, with the election approaching.
“Rather than be part of the solution, they have chosen to be part of the problem,” Sen. John Cornyn (R-Tex.) said on Twitter on Friday.
Democrats have been pushing for a wide-ranging $3.4 trillion bill the House passed in May, which extended the enhanced $600 weekly unemployment benefits through January, among many other provisions. Republicans, who waited until last week to start negotiating in earnest, are reluctant to spend more than $1 trillion after already signing off on unprecedented stimulus spending this spring.
On a private call with GOP senators earlier Friday, Mnuchin and Meadows identified the dispute over state and local aid as the biggest sticking point, according to a person familiar with the discussion who spoke on the condition of anonymity to describe it. Democrats want $915 billion to help states and local governments whose budgets have been decimated by plummeting tax revenue, but Republicans offered only $150 billion.
There was also disagreement on money for schools, testing, housing, child care, the postal service, the census and voting, according to Pelosi.
Republicans believe Pelosi was counting on them to cave in the end, after she struck a series of deals with Mnuchin in the spring that some Republicans ultimately came to regret. Most of those occurred before Meadows came on as chief of staff, and this time the GOP side did not cave, at least not yet.
In an interview on MSNBC, Pelosi denied that she’d overplayed her hand.
“We haven’t overplayed our hand,” Pelosi said. “We aren’t overplaying our hand when we are factually presenting what the needs are.”
Jeff Stein contributed to this report.