COVID Stimulus Talks Reach Ignominious End (Finally)

For the last several weeks, House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin have continued to negotiate the parameters of another large COVID relief funding package, in the range of $1.6 trillion to $2.0 trillion, despite ever-increasing signs that the votes would not be there in Congress to pass such a package (at least before the election).

Those talks finally imploded yesterday. In a letter to Mnuchin dated October 29, Pelosi says that Democrats “are still awaiting the Trump Administration’s promised responses on multiple items of critical importance,” including COVID testing, state and local government aid, a plan for nationwide school reopening, the all-important legal liability issue, and other areas.

Pelosi apparently sent the letter to Mnuchin just after midnight, when it was just barely October 29, and released the letter to the press at the same time. This did not sit well with Mnuchin, who then claimedI woke up this morning and read @SpeakerPelosi’s letter to me in the press. Enclosed is my response. Her ALL OR NONE approach is hurting hard-working Americans who need help NOW!” 

Mnuchin’s response letter called Pelosi’s letter a “political stunt” and says “As it relates to State and Local Funding, Schools, Extended Unemployment Benefits, Liability Protection, and OSHA, we have provided reasonable compromise positions. On these major Pillars you have refused to compromise.” (Ed. Note: Idiosyncratic capitalization is sometimes a sign that the principal wrote the letter themselves, without staff.)

Clearly, it was already too late to get a large aid package passed before the November 3 elections, but this does not bode well for getting a relief package enacted in the November-December lame duck session of the current Congress, either. Senate Majority Leader Mitch McConnell (R-KY) seemed to reject the idea of doing a big COVID bill in the lame duck session, telling a radio interviewer this morning that “I think we need to make a careful, calculated decision about what more to do to deal with this coronavirus. We are throwing money at the search for a vaccine, which is a wise thing to do. We probably need to do another package, certainly more modest than the $3 trillion Nancy Pelosi package. I think that will be something we’ll need to do right at the beginning of the year, targeted particularly at small businesses that are struggling and hospitals that are now dealing with a second wave of the coronavirus. And of course, the challenges for education, both K-12 and colleges.”

The big problem in a lame duck session is always what happens if the elections indicate a change of regime to begin in January. Does the current power structure try to cut final deals, or does the side about to take power hit the brakes and start negotiations anew in January from a position of greater strength? And an extra layer of uncertainty surrounds President Trump, who is unpredictable on his best day. If Joe Biden defeats Trump next week, what will that do to his willingness to sign or veto bills that won’t have any tangible effects until after he leaves office?

 

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