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Stimulus Talks Come to Abrupt Halt After Trump Orders End to Negotiations

  • President Donald Trump orders an end to White House negotiations with House Speaker Nancy Pelosi on a new round of COVID-19 relief
  • Move marks an abrupt departure from optimism expressed by both Pelosi and Treasury Secretary Steven Mnuchin that a workable compromise could be reached
  • Collapse of negotiations raises concerns about further business closures and a slower economic recovery

Just one day after markets rose on optimism that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin might be able to strike a compromise on new COVID-19 relief, talks came to an abrupt end on Tuesday after President Donald Trump ordered Mnuchin to cease negotiations.

In a tweet, Trump said negotiations will stop until after the presidential election, “when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.” Trump also accused Pelosi of not negotiating in good faith after rejecting Mnuchin’s offer of a $1.6 trillion relief package, criticizing Democratic advocacy for funds to state and local governments as a bailout for “poorly run, high crime, Democrat States, money that is in no way related to COVID-19.”

The collapse of negotiations came shortly after Federal Reserve Chairman Jerome Powell called for a robust relief package to sustain the U.S. economic recovery. The news raised fears that a lack of stimulus could depress consumer spending and exacerbate layoffs and business closures, with the National Restaurant Association predicting that 40 percent of the nation’s restaurants may not survive the winter season.

Pelosi echoed Powell’s comments from earlier in the day warning that a lack of stimulus would result in household insolvencies, business bankruptcies, harm to the economy’s productive capacity, and impeded wage growth. She also accused Trump of “putting himself first at the expense of the country, with the full complicity of the GOP members of Congress.”

Democrats, along with some Republicans in competitive races, criticized Trump’s call for the Senate to concentrate on confirming Amy Coney Barrett, his pick to replace Ruth Bader Ginsburg on the Supreme Court. The House passed a $2.2 trillion COVID-19 relief package last week before recessing, though the Senate is not expected to act on it.

Trump sent some mixed signals on COVID-19 relief later in the day, including a link to an article on Powell’s call for greater relief spending with the comment “True!” Later in the evening, he promised to sign standalone bills bills for $25 billion in airline relief, $135 billion for the Paycheck Protection Program, and $1,200 stimulus checks if Congress passed them.

Democrats and Republicans approved $3 trillion for COVID-19 relief in four bipartisan bills in the spring, but many provisions of the legislation have since expired. The parties have had difficulty agreeing on the size and scope of another round of relief during a contentious presidential election year, with some White House advisers arguing that another relief package is unnecessary.

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