After months of stalled, on-again off-again negotiations between Democrats and the White House about another stimulus package for the American people, and as economic recovery during the coronavirus pandemic has slowed, President Trump announced Tuesday he's ending talks between the two sides until after the November 3 elections.
"I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business," Trump tweeted on Tuesday.
The announcement means it is unlikely that Americans will get more direct help this year, such as the $600 per week in enhanced unemployment benefits or individual payments of up to $1,200. "Even if Congress moved quickly after the election," says Aaron Klein, a fellow at the Brookings Institution, "money wouldn't get into people's hands probably until 2021."
After an uproar and a stock market slide, Trump said in a subsequent tweet that he would approve a series of smaller bills, including one for $1,200 stimulus checks and another for additional Paycheck Protection Program (PPP) funding for small businesses. The House appears to be looking into passing a series of smaller bills on mutually agreed upon terms.
There have been multiple attempts at passing additional relief since much of the assistance provided by the CARES Act ran out, including $600 per week in federal unemployment benefits for those who'd been laid off and a moratorium on housing evictions. The deadline for small businesses to apply for funding from the PPP has also passed.
Last week, House Democrats passed a rebooted, $2.2 trillion version of the HEROES Act, originally passed in May. The revised act would extend the $600 per week in unemployment insurance until January, send out another round of $1,200 checks, and provide more PPP money and aid to state and local governments.
Video by Stephen Parkhurst
House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin had been in talks since last week to try to bridge the gaps between the two sides. Mnuchin offered a $1.6 trillion package, including $400 per week in enhanced unemployment insurance, money for rental and mortgage assistances, and aid to state and local governments.
The two sides were set to continue talks on Tuesday before Trump announced the end of negotiations.
Senate Republicans had proposed the $1 trillion HEALS Act in July, which included $200 per week in enhanced unemployment benefits and another round of $1,200 checks, as well as a $300 billion "skinny" bill in September, which included $300 per week in enhanced unemployment benefits and more funding for PPP. They didn't manage to pass either one.
Federal Reserve Chairman Jerome Powell called on Congress to continue providing stimulus to Americans in remarks Tuesday to the National Association for Business Economics. Ending or slowing down this kind of assistance, he said, could lead to a weak economic recovery, "creating unnecessary hardship for households and businesses."
"I think that there were pluses and minuses to what both [sides] were proposing," says Ernie Tedeschi, economist at financial advisory firm Evercore, about the various packages the Democrats and Republicans had proposed since the spring. "What both of them proposed was much better than zero."
But "as a result of the president's tweet," he says, "we have nothing."
Given the tens of millions of people still out of work and with whatever funds they have left quickly depleting, "nothing," he says, "is the worst possible outcome."
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