Stimulus talks between the White House and congressional Democrats broke down on Friday, leading Donald Trump to vow that he would use his “authority as president to get Americans the relief they need”.
Democrats have rallied around a far larger stimulus plan than Republicans and the two sides remain deeply divided over Democratic calls for $1tn in support for state and local authorities facing declining tax revenues and soaring healthcare costs during the coronavirus pandemic.
Negotiations between the two sides on Capitol Hill came to an acrimonious end a week after the expiration of supplemental federal jobless benefits, which had put an extra $600 a week in the pockets of millions of unemployed Americans during the outbreak.
Speaking to an audience at his golf course in Bedminster, New Jersey, Mr Trump said he would issue executive orders to extend emergency unemployment benefits, although he did not say at what level, as well as to suspend student loan payments and continue an eviction moratorium. He said he would sign the executive orders “by the end of the week”.
“You have people in Congress that don’t want to help our people. If Democrats continue to hold this critical relief hostage, I will act under my authority as president to get Americans relief,” he said.
Democrats and Republicans have raised questions over whether the president has the authority to act on issues such as extending unemployment insurance without the agreement of Congress.
Asked whether he was concerned about the legality of the orders, Mr Trump replied: “Probably we get sued, but people feel that we can do it.”
On the question of how he would pay for the extra benefits, the president said: “We have plenty of money.”
Mr Trump also vowed to defer payroll tax until the end of the year. He has repeatedly called for a payroll tax cut, even though Republican and Democratic lawmakers have rejected it. Payroll taxes are used to finance social insurance programmes such as social security and Medicare.
Earlier on Friday, Nancy Pelosi, the Democratic speaker of the House of Representatives, and Chuck Schumer, the Senate’s top Democrat, said Republicans had refused to meet them halfway on the size of the stimulus proposal.
“Yesterday I offered to them, we will take down a trillion, if you add a trillion in,” Ms Pelosi said. “They said absolutely not.”
The Democratic-controlled House three months ago passed a $3.4tn stimulus bill, which the Republican-controlled Senate refused to consider. More recently, Republicans have put forward proposals for about $1tn in stimulus, which Democrats said they would not support.
The two Democrats then met again with Steven Mnuchin, US Treasury secretary, and Mark Meadows, White House chief of staff, before the talks ended on Friday afternoon.
“The president would like us to make a deal. But unfortunately, we did not make any progress today,” Mr Mnuchin said.
He said he and Mr Meadows would recommend that Mr Trump move ahead with executive orders. Mr Meadows said the orders would “alleviate some of the pain that people are experiencing”.
Earlier on Friday, the Department of Labor reported the US unemployment rate was 10.2 per cent last month.
Ms Pelosi and Mr Schumer called Friday’s meeting “disappointing” and accused Republicans of having a “my way or the highway attitude”.
Mr Mnuchin said he was open to “new proposals” from Democrats, but that the two sides were far apart on funding for state and local governments, as well as how to extend the additional unemployment benefits.
“If we can reach an agreement on state and local, and unemployment, we can reach an overall deal, and if we can’t, we can’t,” Mr Mnuchin added.
Both Republican and Democratic governors and mayors have pleaded for more federal support, saying their budgets are under strain as a result of the Covid-19 pandemic.
Mr Mnuchin and Mr Meadows have met daily on behalf of Mr Trump with Ms Pelosi and Mr Schumer for nearly two weeks. Mitch McConnell, the Senate Republican leader, has not taken part in the talks.
In a letter to Democratic lawmakers on Friday morning, Ms Pelosi said “many critical differences” remained, pointing to Democrats’ demands for more money for state and local governments, low-income Americans relying on food benefits and coronavirus testing and contact tracing.
Ms Pelosi also said the two parties were at odds over extra funding for the US Postal Service, which she said was “central to the life of our democracy” in an election year when many Americans will be voting by mail.
Gene Sperling, an economist who held senior positions in the Obama and Clinton administrations, said Mr Trump’s plan “looks untenable, illegal and disastrous in its impact”.
He said a payroll tax cut would be “the singular worst example, maybe in our history, of a president doing a raid on social security and Medicare finances to help fund a tax relief, much of which would go to large companies, that both parties in both houses have rejected”.
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