White House blames Democrats for holding up stimulus talks

Senior Trump administration officials blamed congressional Democrats for holding up negotiations over a new fiscal stimulus package, further dimming hopes of reaching a deal before the presidential election

Speaking from the White House on Friday, Steven Mnuchin, the US Treasury secretary, said Nancy Pelosi, the Democratic speaker of the House of Representatives, was “still dug in” on several matters.

“If she wants to compromise, there will be a deal,” Mr Mnuchin said. “We’ve made lots of progress in lots of areas but there’s still some significant differences that we’re working on.”

Larry Kudlow, the White House economic adviser, told Fox Business Network television: “We’re probably closer than we were a week or two back. But [there are] still major policy differences”.

Mr Mnuchin and Ms Pelosi have been trying to find an agreement on up to $2tn in government relief for the US economy to prevent the recovery from faltering, but have struggled as the general election looms in less than two weeks.

House Democrats had passed a $3tn stimulus bill as far back as May, and another smaller version worth $2.2tn last month — both of which were dismissed by Republicans and the White House as excessive.

But with Mr Trump trailing in the polls and job creation slowing, his administration has felt growing pressure to embrace a deal, and top officials are attempting to pin the blame on Democrats for the failure to strike a deal.

“Nancy Pelosi does not want to approve it. We are ready, willing, and able to do something,” Mr Trump said during the second and final presidential debate on Thursday night.

The criticism from the White House masks the deep split within the Republican party over the merits of a large new stimulus package. Some senior lawmakers have suggested that it is unnecessary, while others have called for a compromise.

Mitch McConnell, the Republican Senate majority leader, has long been a stimulus sceptic, and Democrats are wary of reaching any agreement that could not pass the upper chamber of Congress.

“As you know, the Republican leader in the United States Senate said he can’t pass it,” Joe Biden, the Democratic nominee for president, retorted in Thursday’s debate. “Why isn’t [Mr Trump] talking to his Republican friends?”

Ms Pelosi had stoked hopes that a deal might be imminent on Thursday, saying the negotiators were “just about there”. But on Friday she was more cautious.

“We’re writing the bill and hopefully we’ll be able to resolve some of the other differences. We could do that before the election if the president wants to. I think he does. I think — I know we do,” she told the news channel MSNBC.

While the White House and Congress have agreed on some things in the talks — such as a new round of direct payments to families and the reinstatement of emergency jobless benefits — they have disagreed on funding state and local governments, workplace safety and liability shields for businesses.

Ms Pelosi has also increasingly emphasised the need for adequate funding for the coronavirus response, including testing, tracing, treatment and additional money for schools to reopen safely, with many public school districts still teaching remotely.

The stalemate has continued even as officials at the Federal Reserve and many private economists have warned that, without further fiscal relief, the US could suffer more business failures and bankruptcies, slower job creation or even net job losses, and greater long-term damage to America’s economic fabric.

“Further targeted fiscal support will be needed alongside accommodative monetary policy to turn this K-shaped recovery into a broad-based and inclusive recovery,” Lael Brainard, a Fed governor, said in a speech this week.

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