Stimulus saga: Trump says he would go higher than $1.8 trillion

United States President Donald Trump on Thursday said he would support a bigger stimulus package than the most recent offer made by the White House to Congressional Democrats and blamed House Speaker Nancy Pelosi for the stalemate that has left many convinced a new round of coronavirus relief aid will not be passed until after the November 3 elections.

In an interview with Fox Business News, Trump threw shade on Pelosi, accusing her of stonewalling the negotiations for political gain.

She “doesn’t want to give anything,” said Trump, “she thinks it helps her with the election.”

When asked if he was prepared to go higher than the latest White House proposal for a $1.8 trillion relief package, Trump said, “Absolutely I would”, and invoked his tweet from earlier this week to “go big or go home” on a stimulus deal.

The president also said that he had directed US Treasury Secretary Steven Mnuchin, the administration’s point person on stimulus talks, to present a bigger offer to Pelosi.

Mnuchin and Pelosi are scheduled to speak on Thursday.

Once again though, Trump appeared to be following a different playbook than fellow Republican, Senate Majority Leader Mitch McConnell.

Speaking in Kentucky on Thursday, McConnell said he and other Republican lawmakers prefer a much smaller  $500bn stimulus bill that he plans to introduce next week.

The only certainty in this stimulus saga is that while Congress and the White House remain at loggerheads over a new round of aid, the US economic recovery is downshifting.

The number of Americans filing for unemployment benefits with states unexpectedly rose last week to 898,000, the US Department of Labor reported on Thursday. That is 53,000 more than the previous week.

Jobless claims are a proxy for layoffs, so the data signals not only that layoffs remain widespread – roughly four times greater than pre-pandemic levels in February – but that they are moving in the wrong direction for an economic recovery.

There is a growing body of evidence that the economic recovery is stalling for the nation as a whole, and exacerbating inequalities by failing to carry all Americans out of the hole dug by COVID-19.

The general consensus among economists is that the economic rebound is starting to plateau because crucial pandemic relief aid programmes from Congress have expired, including the $600 federal weekly top-up to state unemployment benefits and the programme to help small businesses keep workers in jobs.

Federal Reserve Chairman Jerome Powell has warned that failure to pass more government stimulus could imperil the recovery.