Trump’s announcement fell hours after Fed chief warned US economic recovery is in peril without more fiscal support.
This week’s stimulus talks between the White House and Democrats in Congress have seen more plot twists than a well-crafted (or poorly crafted, for that matter) action-thriller.
On Friday, United States President Donald Trump appeared to take, of all things, a hard left, saying he’d like to go bigger on coronavirus relief aid than even the Democrats.
“I would like to see a bigger stimulus package, frankly, than either the Democrats or the Republicans are offering,” Trump said during a radio interview.
Earlier on Friday, Trump telegraphed the radio show “bigger” comment tweeting: “COVID Relief Negotiations are moving along. Go Big!”
Covid Relief Negotiations are moving along. Go Big!
— Donald J. Trump (@realDonaldTrump) October 9, 2020
Friday’s talks between US Treasury Secretary Steven Mnuchin – the White House’s point person on stimulus negotiations – and House Speaker Nancy Pelosi failed to yield a deal.
But Pelosi’s spokesperson, Drew Hammill, tweeted that talks continue.
“Of special concern, is the absence of an agreement on a strategic plan to crush the virus,” Hammill tweeted. “For this and other provisions, we are still awaiting language from the Administration as negotiations on the overall funding amount continue.”
Of special concern, is the absence of an agreement on a strategic plan to crush the virus. For this and other provisions, we are still awaiting language from the Administration as negotiations on the overall funding amount continue. (2/2)
— Drew Hammill (@Drew_Hammill) October 9, 2020
House Democrats passed a $3.4 trillion coronavirus relief aid package in May, which they have since whittled down to $2.2 trillion.
Following Trump’s radio interview, White House spokeswoman Alyssa Farah said that the administration is willing to come up from its previous ceiling of $1.6 trillion to $1.8 trillion – the size of the deal Mnuchin floated to Pelosi on Friday, the WSJ reported citing sources familiar with the matter. But it wants to keep the total price tag below $2 trillion.
Uncertainty has been the order of the week after Trump announced on Tuesday that he had pulled the plug on stimulus talks until after the November 3 election, only to U-turn hours later and appeal to Congress to pass targeted relief aid for struggling airlines and small businesses – as well as green light another round of $1,200 stimulus cheques for individuals.
On Thursday, Pelosi said that a targeted aid deal for the nation’s hard-hit airlines could happen, but only if there is agreement on a more comprehensive plan.
The stock market followed the twists and turns in true roller-coaster fashion, with the major indexes plunging on Tuesday after Trump said he’d call off talks, only to climb back up as hopes for a deal were rekindled.
While Wall Street clings to hope, out on Main Street, in the real economy, millions of people continue to struggle with the financial fallout of the coronavirus pandemic.
And relief may slip further from reach without a fresh financial lifeline from Congress.
On Tuesday – before Trump’s announcement – Federal Reserve Chairman Jerome Powell warned that the nation’s economic recovery was in danger of derailing without more government stimulus.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” said Powell.
There are myriad signs that the recovery is starting to plateau as the effects of the nearly $3 trillion in stimulus Congress passed earlier this year wane.
Applications for unemployment benefits filed with states – a proxy for layoffs – fell to 840,000 last week, the US Department of Labor said on Thursday.
Though slightly lower than the previous week, initial jobless claims are still roughly four times higher than February’s pre-pandemic levels.