Pelosi, Mnuchin Point Fingers as Stimulus Talks Stall

Pelosi, Mnuchin Point Fingers as Stimulus Talks Stall

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Plus, the Trump-Biden coronavirus debate in less than 300 words
Friday, October 23, 2020
 

Pelosi, Mnuchin Point Fingers as Stimulus Talks Stall

Satirical newspaper The Onion published a story Friday saying that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin had announced they would be meeting to put the final touches on a 1,000-piece “Starry Night” jigsaw puzzle.

“We really want to get his puzzle done before the election, but it’s also important not to rush things and jam pieces of the night sky together that don’t actually fit,” the two officials supposedly said. “It’s true that we hoped to get the puzzle done faster when we started in June, but even working on it day and night, it takes time to assemble so many pieces. There are still some sticking points, like whether a few of the border pieces are lost for good or whether they’re just in a couch cushion somewhere in the Oval Office, but as soon as we find those and finish the cypress tree, we’ll be all ready to present it to the public.”

That fake news might be more encouraging than the current reality, where the two sides have reverted to finger-pointing, suggesting that a deal before the November elections 11 days away could be reached if only the other side would compromise.

“We could do that before the election, if the president wants to,” Pelosi told MSNBC on Friday.
Mnuchin told reporters that the two sides had made significant progress, but put the onus on Pelosi for further movement. “We’ve offered compromises,” he said. “The speaker, on a number of issues, is still dug in. If she wants to compromise, there will be a deal.”

Both Pelosi and White House Chief of Staff Mark Meadows said they remain optimistic that an agreement can be reached soon. “Hopefully we can get a deal in the next day or so,” Meadows said. “We’re still working through it, Secretary Mnuchin and I have talked and we’re still working with her teams, but actually making adjustments and trying to look at language to reach a compromise.”

But President Trump on Friday again criticized Pelosi’s insistence on additional aid to state and local governments, claiming that the speaker “wants to bail out poorly run Democrat states” (even though governors of red states have also called for aid). Trump again accused Pelosi of not wanting a deal before voters cast their ballots.

A new wrinkle:
With many Senate Republicans opposed to relief spending along the lines of the roughly $2 trillion package being negotiated, some House Democrats have reportedly told Pelosi that they don’t want to vote on legislation before the election unless she gets assurances that the Senate will as well. Pelosi said Friday that Trump would have to convince members of his party. “The fact is that the president has been back and forth: ‘Stop the negotiations,’ ‘Oh, I want more money than Nancy,’ ‘I hope she’ll agree with me,’” she said. “But he has to talk to the Senate Republicans.”

What it all means:
Despite some faint hope that a deal might come together, it’s looking less and less likely that anything will get done before the elections. “The ball is not moving much right now,” White House economic adviser Larry Kudlow told Bloomberg Television. “It’s very difficult. The clock is ticking ... Even if you had a deal in the next few days, you have to go through committee print and have votes in House and Senate. It’s not going to be easy.”

Or as The Wall Street Journal’s Nick Timiraos put it: “The stimulus talks: No one wants to hang up the phone even if there’s not much more to say.”

The numerous issues that still must be worked out mean that another relief bill might have to wait until 2021. Lawmakers could still consider coronavirus relief measures in the lame duck session after the election, when they will also have to pass a new spending bill by December 11. But the election results could complicate any lame duck legislation.

“Putting off votes on a stimulus package until after the election raises the risk that the Trump administration will be less inclined or able to push a package through the GOP Senate,” Bloomberg News reported Friday. “That likely would be amplified if Trump loses to Democrat Joe Biden and Republicans lose their Senate majority -- leaving action on stimulus for the pandemic-stricken U.S. economy until late January at the earliest.”

If the Recovery Is Self-Sustaining, Do We Need More Stimulus?

As lawmakers continue to battle over the size and scope of the next coronavirus relief bill, some experts are wondering just how much help the economy really needs. While the White House continues to tout a V-shaped recovery that will sustain itself without further assistance, most economists say that while the U.S. may avoid a double-dip recession, policymakers are running the risk of producing a lackluster recovery if the government fails to provide substantial additional support.

A big concern, according to Kate Davidson and Nick Timiraos of The Wall Street Journal, is repeating the mistakes of the Great Recession, when in the opinion of many economists fiscal support was reduced too soon. The economy didn’t fall back into recession, but it did putter along with growth well below potential for years.

“This is not a good time to have fiscal policy switch from being accommodative to creating a drag,” former Fed Chairwoman Janet Yellen told the Journal. “That’s what happened [in 2008], and it retarded the recovery.”

Different trajectories: Spending too little now could have considerable long-term costs as the economy remains below potential for a longer time in the future. According to Louise Sheiner and Wendy Edelberg of the Brookings Institution, the economy will take about a decade to return to pre-pandemic levels in the absence of any additional support. On the other hand, a $2 trillion package would bring the economy back to pre-pandemic levels by the end of 2021.

The Fed gets vocal: Historically low interest rates have robbed central bankers of their primary tool for addressing recessions, and Fed officials have been speaking out in favor of more aggressive fiscal support for the economy. Chicago Fed President Charles Evans recently said that policymakers must recognize the long-term effects of an ongoing pandemic: “Even after the worst of the crisis passes, the scarring of families’ balance sheets may weigh on spending and leave them further behind over the longer term.”

Earlier this week, Fed governor Lael Brainard made a case for substantially more federal spending:

“Continued targeted support to replace lost incomes will be an important factor in determining the strength of the recovery. Apart from the course of the virus itself, the most significant downside risk to my outlook would be the failure of additional fiscal support to materialize. Too little support would lead to a slower and weaker recovery. Premature withdrawal of fiscal support would risk allowing recessionary dynamics to become entrenched, holding back employment and spending, increasing scarring from extended unemployment spells, leading more businesses to shutter, and ultimately harming productive capacity.”

The Trump-Biden Coronavirus Debate Summed Up in Less Than 300 Words

What President Trump said at the final debate against Democratic nominee Joe Biden Thursday night: “[W]e're fighting it and we're fighting it hard. ... We have a vaccine that's coming, it's ready. It's going to be announced within weeks, and it's going to be delivered. ... it will go away and as I say, we're rounding the turn, we're rounding the corner, it's going away. . . .
“I don’t think it’s going to be a dark winter at all. We're opening up our country. We've learned and studied and understand the disease, which we didn't know at the beginning. ... I say we're learning to live with it. We have no choice.”

What Biden said:
“220,000 Americans dead. If you hear nothing else I say tonight, hear this. Anyone who's responsible for not taking control . . . anyone who is responsible for that many deaths should not remain as President of the United States of America.”

What the numbers say:
The United States reported more than 71,600 new Covid-19 cases on Thursday, according to Reuters, approaching the single-day record of 77,299 set in July. NBC News’s tally found that the United States actually topped the previous record on Thursday, with more than 77,600 new cases.

And The New York Times reports that “More than 41,000 people are currently hospitalized with the coronavirus in the United States, a 40 percent rise in the past month, and cooler weather that pushes more people indoors is threatening to expand the outbreak still more. At least 14 states saw more people hospitalized for the virus on a day in the past week than on any other day in the pandemic, according to the Covid Tracking Project. Seven more states are nearing their peaks.”

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