Deadline looms for stimulus deal before Election Day with key differences unresolved
House Speaker Nancy Pelosi on Sunday set a Tuesday deadline for her and Treasury Secretary Steven Mnuchin to reconcile significant policy disputes if they want to pass a relief bill before November 3. That time frame brings enormous pressure for a fast breakthrough that will have implications for millions of Americans struggling with the fallout of a still-raging pandemic.
However, a deal has evaded negotiators for months as the Trump administration and Pelosi have been hundreds of billions of dollars apart on topline numbers -- as well as what should be included, and it's unclear if those key sticking points can be resolved before Pelosi's deadline.
The bottom line
Pelosi expressed optimism in a letter to House Democrats on Sunday that a deal can be reached, but the hurdles facing each stage of what would be necessary to get something actually passed are numerous and each about a mile high. The best-case scenario, people involved say, is Pelosi and the administration strike some kind of deal in principle that could be drafted and considered after the election. But given the outstanding issues, even that will be quite a feat in the next 24 hours, people involved say.
What to watch on Monday
- House Democrats will hold a private caucus conference call that will include an update on where things stand.
- Pelosi and Mnuchin are scheduled to speak by phone Monday afternoon.
Days until the election
Over the course of the last five days, Pelosi and Mnuchin have spent roughly three and a half hours on the phone in negotiations, with staff working behind the scenes on various pieces of the talks. Pelosi, in a letter to colleagues on Sunday, outlined five central areas where there remained significant disagreement. Those listed issues didn't even include things like unemployment insurance and liability protections.
As Pelosi noted: "These are a few of the issues that were discussed this weekend, but they are not exhaustive of our concerns."
In other words, negotiators essentially have about a day to bridge divides that have existed since the start of these talks -- and despite months of meetings and calls, including several the last week, haven't come close to resolution.
The effort between Pelosi and Mnuchin (and their respective staffs) is real. The push for an agreement is real. The array of major things that would have to perfectly -- and quickly -- fall into line for any agreement to actually go anywhere should one be reached is daunting. But this is a genuine effort to break a logjam that has been locked into place for months.
That Pelosi put the deadline on Mnuchin and the administration underscores that progress, to the extent it has occurred, has moved about as quickly as a fly through molasses. Even on areas where verbal agreement appeared to be reached -- the Democratic priority of a national testing and tracing strategy -- the counter-proposal from the administration that came later took days, and, according to Pelosi, contained significant changes to the text.
The deadline is in place to try and jam the administration into making decisions. Pelosi is aware President Donald Trump repeatedly says he wants a pre-election deal -- one bigger than just about anybody else in his party is willing to accept. The countdown clock puts the onus on the administration to prove that's actually the case.
Pelosi's comments over the weekend underscored the depth of the disagreements here. For months, all the talk was about the topline -- Democrats sitting above $2 trillion -- and the administration unwilling to go anywhere near there. But Trump has driven the toplines close together -- in fact, sources tell CNN that Mnuchin, for the first time, has put $2 trillion on the table. But in a deal this large, it's about what any bill would say about where that money would actually go.
Pelosi spoke this weekend about how the testing language came back with the administration replacing Democratic proposals that said money "shall" be spent in a specific way, with money "may" be spent in a specific way. That, on its face, may seem trivial. But it's an enormous difference in practical terms -- one that isn't acceptable for Democrats.
Now, given the sheer scale of the possible legislation being considered and drafted right now, and you get a sense of just how much work needs to be done to lock in an actual agreement that can be voted on by lawmakers.
Can something really get done before the election
The interesting element of Pelosi's deadline is just about everyone involved acknowledged last week no stimulus deal would be signed into law before the election. Even if an agreement in principle were to be reached, the drafting, socializing, whipping and floor consideration would take more days than exist before the election. Add that members up for reelection want to be on the trail, not in Washington, and it gets even more complicated. Toss in the fact Senate Republicans want no part of the current outline of a deal under consideration and it becomes a virtual impossibility.
The reality is the odds of anything being signed into law pre-election is somewhere near zero. But Pelosi said her committee chairs are writing language in real time along side the negotiations to speed the process, and will at least give it a shot.
The back and forth, the clash of personalities, the divides between chambers and parties -- it serves to distract from what this is really all about.
Millions of unemployed. Waves of defaults and evictions. A crisis in child care. Restaurants and service industry businesses, those that have survived this long, on the brink. Tens of thousands of airline jobs.
The stock market and some corporate earnings serve as a convenient cover for what sits underneath. Immense pain and struggle across the country -- one that lawmakers on both sides acknowledge must be addressed. How it's addressed, however, remains the biggest hurdle to anything actually getting done.
Obviously the election in a little more than two weeks looms above everything here and the calculations are complicated. Do Democrats give Trump, who hasn't been able to lock onto a single stretch-run message, a win? What about Senate Democrats, who think they have the upper hand on several GOP incumbents who have pressed for a stimulus deal? How do the frontline House Democrats, who have been pressing Pelosi for a deal for weeks now, factor into things? Or what about Senate Republicans, the vast majority of which want no part of an agreement this expensive?
And how about Senate Majority Leader Mitch McConnell, who knows a vote on a Pelosi-Mnuchin deal would fracture his conference at the absolute worst time?
Party leaders may say publicly these questions aren't factoring into the thinking here, but they play a role. That's just a reality. Whether they tip things toward an agreement or further away is the ultimate question -- and one that should finally be answered this week.
Trump is not a player in these talks. He's just not. He's briefed on them. He has topline observations and without question gave them a jolt with his decision to push for a bigger offer from his administration. But on the details, he's not in the weeds, according to people involved. But he's still pushing for a "big" deal -- and did again Sunday night, CNN's Aaron Pellish reported, by saying this of the talks with Pelosi:
"I want to do it at a bigger number than she wants. That doesn't mean all the Republicans agree with me, but I think they will in the end," Trump said. "If she would go along, I think they would too."
As we've written for the last week, Trump's assumption that Republicans -- specifically Senate Republicans -- would just go along with him lays bare either an intentional disregard for the realities of the last several weeks or a little bit of wishful thinking.
Another issue has been the President's own rhetoric. Trump abruptly shut down stimulus negotiations earlier this month, only to completely reverse his position days later, sign off on a larger $1.8 trillion topline number and tweet "Go big or go home" on stimulus funding.
Trump told reporters on Sunday night that the White House is working with Pelosi to pass a stimulus bill and said he would like to pass a package with a topline number that is "a bigger number than [Pelosi] wants."
It's unclear, however, if such a deal would pass the Republican-controlled Senate, a fact Trump appeared to acknowledge Sunday.
"I want to do it at a bigger number than she wants. That doesn't mean all the Republicans agree with me, but I think they will in the end," Trump said. "If she would go along, I think they would, too."
What needs to be resolved?
This is not an exhaustive list, but this is the latest on the issues where there are still significant disagreements, according to people involved:
- Unemployment insurance
- Testing/tracing/surveillance/vaccine development
- Liability/Occupational Safety and Health Administration
- State & Local funds
- Child care assistance
- School funds
- Tax credits -- specifically an expansion of the Child and Earned Income Tax Credits
Pelosi said in a letter to Democratic colleagues Sunday, "while there was some encouraging news" with stimulus talks, "much work remains."
One major sticking point, she said, is the language the Trump administration sent to House Democrats concerning what would be funded for coronavirus testing under a stimulus agreement.
"The White House does not appreciate the need to direct resources to culturally competent contact tracing," Pelosi wrote.
Meanwhile, McConnell announced on Saturday there would be votes on stimulus measures, including a stand-alone Paycheck Protection Program bill to help small businesses, on Tuesday and Wednesday, though Democrats are expected to block McConnell's effort.
On Wednesday, McConnell will put a roughly $500 billion proposal on the floor. It will be nearly identical to a proposal blocked by Senate Democrats earlier in the summer.
Democrats will block the larger proposal -- Senate Democratic Leader Chuck Schumer called the effort "just a sham" this weekend. The PPP money will be more interesting to watch -- Schumer declined to comment on it since the procedure and structure of the proposal still isn't known and it's likely a few Democrats may join Republicans to support it given the popularity of the program. But it is also expected to fall short of the votes needed to advance.
McConnell, in announcing the two Covid relief votes this week, also said this:
"If Speaker Pelosi ever lets the House reach a bipartisan agreement with the administration, the Senate of course would consider it."
That drew some attention given McConnell's insistence that his conference wanted no part of any such deal. But pay attention to what McConnell didn't say in that sentence. He didn't say *when* any such deal would be considered. He also didn't pledge any GOP support for one. If -- and of course it remains a big if -- any agreement is reached between Pelosi and Mnuchin, the expectation is McConnell would deal with it after the election, people familiar with Senate GOP thinking tell CNN. And there's no expectation it would get enough GOP votes to pass at this point.
High stakes for millions of Americans
Negotiations would still continue after Tuesday if a deal isn't reached, but it wouldn't get done in time before Election Day, which will carry adverse effects for millions of Americans.
The pressure to strike a deal this time has become increasingly urgent with unemployment levels elevated, an epidemic of small business closures, and the end of the direct payments and enhanced unemployment insurance that helped float families and individuals throughout the pandemic-created economic shutdowns.
Congress' swift and expansive response to the pandemic last spring spared millions of Americans from falling into poverty after losing their jobs. But now that the relief has ended, the poverty rate has risen in recent months, two new studies show.
In fact, without the additional federal help, more people -- particularly Black Americans, children and those with a high school education or less -- fell into poverty over the summer. The rate rose to 11.1% in September, according to the researchers, who have created a near real time dashboard.
"Our results show that for low-income individuals and families, the government response to the pandemic more than offset the sharp decline in earnings early on in the pandemic," the authors wrote. "However, these gains appear to have faded as some of the benefits expire."
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