Stimulus negotiations: Self-imposed deadline arrives with no sign of a deal

Congress is still in stimulus negotiations even though the self-imposed deadline arrives with no sign of a deal. By Lauren Fox, CNN

(CNN) -- This was deadline day, the day that House Speaker Nancy Pelosi, Treasury Secretary Steven Mnuchin, White House chief of staff Mark Meadows and Senate Democratic Leader Chuck Schumer were aiming to have a topline agreement.

Yet, despite the fact that more than 30 million Americans are collecting jobless benefits, businesses are being forced to close their doors at a breakneck pace and the end to the virus isn't in sight, a stimulus deal isn't imminent.

It's not even close.

If the last 24 hours have revealed anything in these negotiations, it is that no one is coming to an agreement any time soon. This is closer to falling apart at this point than coming together.

Congress is gone. McConnell has said the Senate isn't technically in recess for the month, but most members have returned home for the August break, promising to return only if McConnell calls them back to vote on a deal.

The most succinct way to sum up where we are:

"We might not get a deal," Sen. Richard Shelby, an Alabama Republican who chairs the Senate Appropriations Committee.

By the numbers

Senators have been in session for three weeks. Pelosi, Mnuchin, Meadows Schumer have had 11 meetings totaling 19 hours, and still, the projections for getting an actual deal are no better than they were 10 days ago.

In their own words:

  • Pelosi: "We're very far apart. It's most unfortunate."
  • Mnuchin: "I think there is a lot of issues we are close to a compromise position on, but I think there are a handful of very big issues that we are still very far apart."

The dynamics

One thing members and aides have been lamenting for weeks is that the urgency to act right now, in this moment, never actually materialized this work period.

The unemployment benefit deadline came and went, the self-imposed deadline is likely going to be missed Friday. Democrats continue to believe they have the political leverage after Republicans failed to unite behind their own plan, and Schumer and Pelosi have been reluctant to acquiesce to White House demands, believing they hold the cards to a negotiation where Democratic members are going to have to provide the majority of the votes. That dynamic hasn't shifted.

Schumer held a call with his members Thursday afternoon. The message one member told me was both "gloomy and determined" and Schumer "didn't sugarcoat how far apart things are."

When CNN asked if there was pushback from Democrats worried about the lack of progress, the member said "100% unified and more than I've ever seen."

How bad are things really?

Multiple aides involved in the talks have told CNN over the last few days that they are now eying the government funding deadline as perhaps the only real remaining trigger for action if things continue to flounder.

That deadline is September 30. That is more than two months after the expiration of the enhanced unemployment benefits.

It is the worst case scenario, but the fact people are considering that timeline reveals just how bad things have gotten.

What's been offered?

On Thursday night, Mnuchin and Meadows came to the table with a willingness to discuss rental assistance, not just a federal moratorium on evictions. They also have been trading proposals back and forth on enhanced federal unemployment benefits, but major differences remain and the goodwill is running short at this point. At one point, Pelosi accused Meadows of slamming his hand down on a table during their meeting, something Meadows denied. But it underscores just how thin patience is running right now and how the dynamics inside the room aren't getting any better.

Chances for a breakthrough?

It is true that urgency can shift quickly on Capitol Hill. But, that is much harder to do when members are away and physically keeping their distance from each other. What could happen is many members are going to come face to face with constituents who need help in the next weeks. Many members might feel differently about importance of coming to an agreement if polls start to shift, but it is likely going to take all of August to get there.

That's not to say something couldn't change. It always can. But as Sen. Roy Blunt, a Republican from Missouri, told CNN on Thursday, right now the decision isn't really about what should be in a deal. It is about whether members actually want to get one.

"I do think at some point everybody has to make a decision. Either we are going to do this or we're not," Blunt said. "And if we're not, we're not."

Who can change this stalemate?

The thing that changes the dynamic is if President Donald Trump says "enough" and demands a deal from his negotiators.

Mnuchin was clear Thursday night that Trump wants a deal. The President called Mnuchin and Meadows three times during their meeting with Democrats Thursday night to urge them to keep talking. Mnuchin and Meadows planned to brief the President on negotiations late into the evening. But, Trump has also been clear that he isn't going to back just anything. A massive amount of money for state and local governments isn't acceptable to the President, and that very real sticking point reared its head in Thursday's meeting underscoring another place the two sides are light years apart.

To put a finer point on it, this was the split screen last night in the dueling pressers:

Mnuchin: "The President is not going to do a deal that has a massive amount of money to bail out state and local."

Pelosi: "We're not bailing out the states. We're protecting the jobs of our heroes. That's why it's called the HEROES Act. Our health care workers, our first responders, our transit, transportation, sanitation, our teachers, our teachers, our teachers."

"They risked their lives to save other lives, and now they may lose their jobs and left because the Republicans are saying they're not going to bail them out."

What is next?

The President has floated taking executive action. Mnuchin and Meadows were clear that the President will act on something if a deal isn't reached on Friday. But as CNN's Phil Mattingly has underscored many times in this note, the legal questions surrounding any executive action whether it be repurposing leftover funds into a federal unemployment benefit or suspending the payroll tax, will be challenged in court.

Schumer said it Thursday night. "Try these executive orders, which will leave most people out, will not cover the broad expanse of what's needed, will be litigated in court and be awkward and difficult to implement. It's not a good choice at all."

One more dynamic: Moderate Democrats

If moderate Democrats start to sound the alarm that no deal isn't an acceptable option for them, the negotiation dynamics could shift. Moderate Republicans have been doing so for weeks, but with the GOP divided, it hasn't moved the needle. Moderate Democrats might put more pressure on their leadership, but right now most members seem to believe Pelosi and Schumer are going to work this out.

When CNN pushed Sen. Doug Jones of Alabama, the most endangered Senate Democrat up in 2020, about whether he blamed his leadership for not getting a deal, he said he didn't.

"The problem is that we should have been having these discussions weeks ago not on the verge of unemployment ending. Good grief," Jones said. "(The White House) knew this deadline was coming. They knew it was coming and to push it under a threat like this is unconscionable. That is not leadership."

The sticking point(s)

When it comes to sticking points, there are many. There are differences in unemployment insurance benefits, state and local funding, liability protections, providing rental assistance to people struggling, funding for the US Post Office, nutrition assistance and how to structure funding for kids going back to school. But, all of it boils down to a fundamental, philosophical difference between Mnuchin and Meadows and Pelosi and Schumer over how big this problem is right now and what role government has in addressing it.

"We have always said that the Republicans and the President do not understand the gravity of the situation. And every time we meet with them, it is reinforced," Pelosi said Thursday night.

That pretty much sums up why no movement has materialized at this point.

Democrats have largely been blaming Meadows for not being able to get over the first, major difference. For the first time in his career, Meadows -- known as being a thorn in the side of former GOP House speakers like Paul Ryan and John Boehner -- is being tasked with cutting a massive deal on a government stimulus package that is bigger than those he spent years in Congress denouncing. Democrats don't trust that Meadows wants to back a big deal and Republicans are divided over whether a big stimulus package is even necessary.

Every other issue from unemployment assistance to state and local funding is about the macro disagreement about what government's role should even be right now.

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