Donald Trump on Tuesday called off negotiations with Democratic lawmakers on coronavirus relief legislation until after the election, even as cases of the virus are on the rise across much of the country before flu season.
“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 wrote on Twitter a day after emerging from a hospital stay for Covid-19 treatment.
The news triggered a brief stock market selloff. Following Trump’s announcement breaking off negotiations, US stocks were down more than 2% in late afternoon trading.
However, the president later appeared to backtrack slightly and said he was “ready to sign right now” a bill that would approve a fresh round of $1,200 stimulus checks to be sent out immediately.
Trump’s decision to halt talks came after House speaker Nancy Pelosi on Sunday said during an interview with NBC’s Face the Nation that progress was being made in her negotiations with the Trump administration on a bill to build on the more than $3tn in coronavirus aid enacted into law earlier this year.
Pelosi issued a thundering statement in the wake of the announcement, accusing Trump of “putting himself first at the expense of the country” by halting negotiations over a new coronavirus aid package from Congress.
Pelosi said Trump “showed his true colors” in stopping the talks between congressional leaders and the White House that have been aimed at bringing $2tn in new aid to fight the coronavirus. The Democratic leader said by “walking away” Trump was “unwilling to crush the virus” and is abandoning the needs of children and other Americans.
“The White House is in complete disarray,” she concluded.
Many Republicans on Capitol Hill could not countenance a relief bill over $2tn as Democrats were proposing, with the GOP favoring something between $800bn and $1.5tn, and they never got above that ceiling despite the many rounds of talks between Pelosi, Mnuchin and sometimes also Mark Meadows, Trump’s chief of staff, Politico reported on Wednesday, adding that Senate majority leader Mitch McConnell was not going to push a bill a majority of his Senate cohort would not support.
A phone call between McConnell and Trump on Tuesday had the Kentucky Republican senator telling Trump that Pelosi was stringing him along and no deal she cut with Mnuchin would command broad GOP support to pass in the Senate, according to two people with knowledge of the call who spoke on the condition of anonymity to discuss it, the Washington Post reported.
Some media commentators described Trump’s abrupt move as a goal scored against his own team – making it a lot harder for him to blame Democrats for any lack of a deal.
Pelosi and Mnuchin had been talking extensively, in person and by phone, in recent days. But with some arch-conservative senators facing tough re-election battles and campaigning on platforms of fiscal austerity, there has been resistance to Trump spending more trillions on economic relief at this juncture, no matter the individuals, businesses and entities such as the postal service crying out for aid.
Earlier on Tuesday, the Federal Reserve chair, Jerome Powell, told a business conference the US economic expansion was “far from complete” following the deep contraction stemming from the coronavirus pandemic.
A failure by the United States to provide further relief, Powell warned, “would lead to a weak recovery, creating unnecessary hardship for households and businesses.“
In recent days, financial markets were hopeful progress toward a Covid-19 vaccine and another round of economic stimulus from Congress would boost the US economy, which has been showing signs of renewed weakness.
Pelosi and Mnuchin had been trying narrow the gap between a recent Democratic call for around $2.2tn in new spending to battle the pandemic and bolster the economy, versus around $1.6tn sought by the administration.
It was not clear whether enough Senate Republicans would have gotten behind any deal, however.