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Stimulus negotiations: Talks on the brink of collapse as two sides trade blame and get no closer to a deal

CNN logo CNN 8/7/2020 By Clare Foran, Manu Raju, Ali Zaslav and Lauren Fox, CNN
Nancy Pelosi wearing a blue dress: House Speaker Nancy Pelosi speaks during her weekly press conference at the US Capitol in Washington, DC on July 31, 2020. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images) © Mandel Ngan/AFP/Getty Images House Speaker Nancy Pelosi speaks during her weekly press conference at the US Capitol in Washington, DC on July 31, 2020. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)

A three-hour meeting Thursday evening between senior administration officials and Democratic leaders yielded little progress as both sides seemed resigned to the likelihood that Congress won't reach a major stimulus deal amid an economic crisis.

Both sides emerged from the meeting trading blame for the sputtering talks -- and the administration officials warned that President Donald Trump would take executive action if no deal is reached by Friday.

It's unclear if the two sides will meet on Friday. White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin plan to brief Trump later Thursday night and Friday morning as they decide whether to continue to negotiate with Democrats.

"We are very far apart -- it's most unfortunate," House Speaker Nancy Pelosi said.

"We are very disappointed in the meeting. ... They were unwilling to meet in the middle," Senate Minority Leader Chuck Schumer said.

Mnuchin and Meadows similarly indicated they are "very far apart" from the Democrats on some major issues.

"I think there's a lot of issues we are close to a compromise position on, and I think there's a handful of very big issues that we are still very far apart," Mnuchin said.

Pelosi said Meadows slammed his hand on the table and stormed out of the room at one point, something that Meadows denied.

"I don't know what she's talking about," he said. "I didn't walk out of any meeting all day," he added.

The differences remain as they have been: Democrats want to do "something big," in the words of Pelosi, and the Trump administration wants a "skinny bill," in the words of Meadows, on the issues they agree on.

Democrats have argued that passing anything less than a large-scale package is a non-starter and have pushed back against the idea of passing anything piecemeal.

But the two sides have been far apart on a top-line price tag for a stimulus package, making an overarching deal hard to reach. Pelosi told CNN this week that she wants a price tag of $3.4 trillion, a number that Republican negotiators have balked at. Meadows said earlier Thursday that the White House top-line number was now "north" of the initial GOP offer of $1 trillion.

"My frustration is that we could've passed a very skinny deal that dealt with some of the most pressing issues," Meadows said Thursday evening.

One of the biggest sticking points: aid to state and local governments.

Democrats have made a boost in aid to state and local governments a key priority and a House-passed Democratic proposal provided $500 billion to states and $375 billion to local governments. In contrast, the initial Republican proposal didn't include additional funding for states or cities, but gave them more flexibility to use some of the $150 billion allocated in the CARES Act relief legislation for revenue shortfalls.

"On things like state and local, this is obviously a big issue, we're still very far apart on that. The President is not going to do a deal that has a massive amount of money to bail out state and local," Mnuchin said.

Trump called the two officials three times during the meeting and urged them to continuing negotiating, Meadows said.

But Mnuchin warned that the President is poised to act unilaterally if a deal isn't struck by Friday, saying, "If we conclude tomorrow that there is not a compromise position on the major issues, the President has alternatives and executive orders."

Earlier in the day, Pelosi rejected the possibility of a short-term extension of federal jobless benefits during her news conference, taking a hard line in demanding that Congress approve a large-scale stimulus package that the White House has so far rejected.

"We're not having a short-term extension," Pelosi said when asked if Democrats are ruling out an interim extension of the lapsed federal unemployment enhancement if talks collapse, a signal that restoring the benefit will be contingent on the White House and Democrats cutting a broader deal, which so far remains elusive.

Pelosi also indicated no willingness to back off the demand for restoring enhanced unemployment benefits to the level of $600 a week. "We have said that we are going to have the $600," she said, adding, "They know that we want the $600."

"Why dismantle a program that almost all economists say is working and put something new in its place that will take months to go into effect?" asked Schumer, who joined Pelosi at her presser.

The federal enhanced benefit program was set up to provide an additional $600 a week to individuals receiving regular state unemployment benefits and was meant as an added boost to help blunt the economic fallout from the pandemic. It has now expired, however, as negotiators remain at an impasse over disagreements over the scope, scale and details of a new stimulus measure, sparking fears that a deal may not be reached at all.

Democrats have called for a comprehensive agreement, while Republicans have accused Democrats of acting in bad faith as they deal with internal divides within their own party. Complicating efforts: a significant number of GOP senators hesitant to back any deal with a massive price tag after Congress has already approved trillions of dollars in coronavirus relief.

"As you can see, the Democrats in the Congress are unified," Pelosi said. "At the same time, Republicans are in disarray."

Senate Majority Leader Mitch McConnell announced on the Senate floor that he won't adjourn the Senate for the August recess Thursday, as has been previously scheduled, as negotiations over the next Covid-19 response stimulus package limp forward. He did say senators can return home and will be given 24 hours' notice to return for a vote on a deal if it is reached and that he would stay in DC as the talks continue.

But McConnell added he won't wait forever and will adjourn for August if Democrats make clear they won't cut a deal: "But the Senate won't adjourn for August unless and until the Democrats demonstrate that will never let an agreement materialize. A lot of Americans' hopes, a lot of Americans' lives are riding on the Democrats' endless talk. I hope they are not disappointed."

The speaker sounded skeptical and dismissive when a reporter asked about possibility that Trump could take executive action if there's no stimulus deal with lawmakers.

"And what is he going to act upon?" Pelosi asked. "I don't think they know what they're talking about. The one thing the President can do is extend the moratorium and that would be a good thing if there's money to go with it and that's what we keep telling them."

Pelosi was later asked if she thinks the administration could move money around without congressional approval.

"They can't move that much money, we're talking about a major investment," she said.

Funding for the US Postal Service has also become a major issue in the talks.

Schumer provided insight into his demands of Postmaster General Louis DeJoy after their heated meeting on Wednesday in Pelosi's office. Schumer told CNN that they are demanding that all 100% of mail-in ballots be delivered by Election Day. And also on Wednesday, Schumer said that the responses they got were "inadequate."

In the Thursday interview, Schumer said at the meeting they called on DeJoy "to pull back on these cutbacks on overtime and employees, so all the mail can be delivered on time on Election Day. Not 94% or 97%."

Asked if DeJoy told Democratic leaders the USPS wouldn't be able to guarantee 100% would be delivered, Schumer said: "I don't want to say what they said, but we pushed it. It's gotta be 100%, not 94 not 97."

Schumer, asked if $10 billion would be sufficient to help with their budget woes, added: "We'll figure out what they need. We don't fully trust them -- with everything Trump has said about the Post Office -- and their Trump appointees."

This story has been updated with additional developments Thursday.

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