WASHINGTON — Speaker Nancy Pelosi of California on Friday suggested that President Trump’s coronavirus diagnosis could help to break a stalemate over a stimulus package to counter the economic toll of the pandemic, even as she remained far from an agreement with the administration on the contours of a bipartisan compromise.
Congressional aides and Washington policy analysts remained more pessimistic, saying that Mr. Trump’s diagnosis and a monthly jobs report that fell short of forecasters’ expectations were unlikely to motivate Democrats and Republicans to break a monthslong deadlock and make a deal. But after several days of lengthy conversations with Treasury Secretary Steven Mnuchin, Ms. Pelosi sounded upbeat on Friday about the prospects of an eventual agreement.
“This kind of changes the dynamic, because here they see the reality of what we have been saying all along: This is a vicious virus,” Ms. Pelosi said on MSNBC. She later urged airlines to delay furloughing tens of thousands of employees, vowing that the House would soon pass relief for those workers either as stand-alone legislation or as part of a broader package.
Financial markets have surged and receded over the past week as news reports raised, then dashed, hopes that an agreement could soon be at hand, after months of impasse in the Capitol. But none of the developments have shaken a growing sense inside the Senate and the House, and among the think tanks and lobbying shops around them, that no agreement will occur at least until the elections in November, because neither party is sufficiently motivated to cut a deal.
“I’m trying to figure out here whether I should predict another bill quickly or not, but the talks have speeded up in the last couple days,” said Senator Mitch McConnell of Kentucky, the majority leader, speaking at an event in Kentucky. Mr. McConnell, who has largely been removed from the talks but has been briefed regularly by Mr. Mnuchin, added, “I think we’re closer to getting an outcome.”
Republicans have balked at Democrats’ relief plans, deeming them far too costly. But Mr. Trump’s diagnosis, coming on the heels of a grim jobs report, had the potential to change their political calculations, possibly jolting the White House and leading Republicans into a more compromising posture as they face strong political headwinds.
At the White House, Mark Meadows, the chief of staff, said Mr. Trump was eager for a compromise, telling reporters that the president’s “first question to me this morning was, ‘How is the economy doing? How are the stimulus talks going on Capitol Hill?’” (Mr. Trump has not spoken to Ms. Pelosi in months, instead dispatching Mr. Mnuchin and Mr. Meadows to negotiate on his behalf.)
But the cautious optimism belied a significant number of unresolved differences between the latest $2.2 trillion Democratic proposal, which top Democrats muscled through the House on Thursday without Republican support, and the administration’s latest offer.
In a letter to the Democratic caucus, Ms. Pelosi singled out five critical areas of disagreement: the amount of new spending, jobless aid, funding for schools and state and local governments, money for child tax credits, and providing funds for testing and tracing of the coronavirus.
“We’ll find our middle ground — we’re legislators,” Ms. Pelosi said. “We’ll get the job done.”
Mr. Mnuchin and Ms. Pelosi spoke for more than an hour on Friday about those differences, said Drew Hammill, a spokesman for Ms. Pelosi, and their conversations were expected to continue. The House left Washington on Friday, with the promise of 24 hours’ notice before a vote on any legislation.
Moderate rank-and-file lawmakers have increasingly agitated for Ms. Pelosi to strike a bipartisan agreement with the administration, with some personally lobbying for the chamber to remain in Washington until a compromise is reached. Eighteen Democrats broke with their party on Thursday and voted against the $2.2 trillion plan, most of them arguing that there was no point in advancing legislation that did not have Republican support.
“Instead of both sides making necessary concessions and getting Americans the relief they desperately need, we’re back to passing partisan bills that are dead on arrival and a blame game from all parties,” Representative Max Rose, Democrat of New York, said in a statement after the vote. “Voting on this bill means both sides have given up, and I will never vote to do that.”
Other Democrats argued that Mr. Trump had done little to cajole his party to agree to anything close to the Democratic demands of an aid package for people and businesses that exceeds $2.2 trillion.
In the absence of a compromise, both sides were pointing fingers at each other. Democrats complained privately that Mr. Trump himself was the hangup in the process and had not pressed for a deal. Republicans said that Democrats were wary of handing the president anything like a victory before the election.
Despite Ms. Pelosi’s promise of imminent relief for airline workers, it remained unclear whether a stand-alone bill or even a deal struck between Ms. Pelosi and Mr. Mnuchin could ultimately become law, given stark divisions among Republicans over how much relief is warranted to help bolster economic recovery.
Republicans, who have been pushing for a stand-alone bill for small business relief, on Friday prevented an attempt by Representative Peter A. DeFazio, Democrat of Oregon and the chairman of the House Transportation and Infrastructure Committee, to unanimously approve legislation reviving an expired relief program for airline workers.
United Airlines and American Airlines furloughed 32,000 employees on Thursday, after an effort to renew the funding that the industry had received in March fell apart. The airlines said that they would be able to reverse course if Congress provided another round of aid in the coming days, but that unwinding the furloughs would prove more difficult the longer it took, as some employees, like pilots, would need to receive training to work again.
Passenger airlines, which are losing billions of dollars per month, had been able to avoid deep cuts because of the $25 billion in payroll funding that Congress provided under the stimulus law enacted in March, which banned broad job cuts until Oct. 1. Delta Air Lines and Southwest Airlines, the nation’s two other major carriers, have been able to avoid furloughs for now, though both have warned that they may still come.
The employment report on Friday from the Labor Department showed a slowdown in jobs growth from August to September, a development that alarmed many economists and some Wall Street forecasters, who warned that the economy could face a slow and painful recovery without further congressional support.
Business groups urged more relief. “Manufacturing continues showing strength, but even with today’s positive jobs report we’re still about a half million jobs shy of pre-pandemic levels for the industry,” said Aric Newhouse, the senior vice president for policy and government relations at the National Association of Manufacturers. “A complete manufacturing recovery is fully dependent on the rest of the economy’s recovery, and that won’t happen without Congress coming together to pass bipartisan relief.”
Trump administration officials struck a more upbeat tone, praising the report while calling for some targeted additional stimulus, including aid for airlines. They remained pessimistic by day’s end on Friday that such an agreement could materialize, a senior administration official said.
Niraj Chokshi contributed reporting.
Source: Economy - nytimes.com
