WASHINGTON—House Speaker Nancy Pelosi (D., Calif.) said negotiations with the White House over a new coronavirus aid package remained at an impasse Sunday, as Senate Republicans remain wary of more spending.
In a letter to House Democrats on Sunday, Mrs. Pelosi said the administration’s latest $1.9 trillion offer, submitted Saturday, provided inadequate funding and no national plan for testing, contact tracing and treatment of the coronavirus.
“This past week, the president demonstrated very clearly that he has not taken the war against the virus seriously, personally or nationally. This attitude is reflected in the grossly inadequate response we finally received from the administration on Saturday,” Mrs. Pelosi wrote. “Until these serious issues are resolved, we remain at an impasse.”
House Democrats have pushed for $75 billion and a national plan for testing, tracing and treatment of the virus. Mrs. Pelosi said in her letter that the White House plan included about $45 billion in new funding, lacked a national plan for testing and tracing and didn’t address the virus’s disproportionate impact on minority communities.
President Trump in brief comments on the issue said Republicans were still eager to reach an agreement.
“Republicans want to do it. We’re having a hard time with Nancy Pelosi,” he said Sunday on Fox News.
White House spokeswoman Alyssa Farah told reporters the White House offer was around $1.8 trillion. A person familiar with the proposal said it included $1.88 trillion in spending, with about $400 billion of the funds reallocated from unspent money from earlier relief legislation, bringing the total cost to about $1.5 trillion.
Mr. Trump faces resistance from some Republicans wary of approving more federal aid after Congress authorized around $3 trillion in coronavirus relief since March.
During a conference call Saturday morning with White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin, several Senate Republicans said they were opposed to passing another large aid package, according to people familiar with the call. Mr. Meadows said he would bring their concerns back to President Trump, suggesting he expected a less than warm reception by joking that as a result the lawmakers would have to attend his funeral, according to the people.
The pushback from Senate Republicans comes after the White House increased its offer on Friday to House Speaker Pelosi in the on-again, off-again effort to reach an agreement on a fifth aid package before the election. The new bid calls for nearly $1.9 trillion in spending, with about $400 billion of the funds reallocated from unspent money from earlier legislation, bringing the total cost to about $1.5 trillion, according to a person familiar with the offer.
That proposal comes closer to the $2.2 trillion plan that House Democrats approved earlier this month, though major differences between the Democrats and the White House remain. In a letter to House Democrats Saturday, Mrs. Pelosi wrote that the new offer from the White House “amounted to one step forward, two steps back.”
The two sides have edged closer on one contentious issue: funding for state and local governments, which Republicans have characterized as a bailout for Democratic-led states. The most recent White House offer included $300 billion in funding for state and local government, up from $250 billion in their last proposal. Democrats, who had initially pushed for more than $900 billion, included $436 billion in their last bill.
The latest White House proposal would also partially restore $400 in weekly federal unemployment benefits, which Democrats proposed resuming at the $600 weekly level that expired in late July.
Senate Republicans last month rallied around an aid proposal that calls for about $650 billion in spending, offset by about $350 billion in savings elsewhere for a total cost of around $300 billion. GOP lawmakers told the Trump administration officials on Saturday that the Republican bill should be the starting point for talks with Democrats, according to the people familiar with the call, calling such a large package unnecessary.
One major source of concern among Senate Republicans is the White House proposal’s provision to expand the Affordable Care Act’s subsidies for people who have lost jobs, and with them their employer-sponsored health care, during the pandemic.
Many Republicans oppose an expansion of the ACA, which they have criticized and sought to repeal for years. Many Republicans also view its restrictions on abortion funding as insufficient and see expanding the subsidies as compounding that problem. They conveyed to Mr. Mnuchin that such a provision was unacceptable, according to GOP aides.
During the call, Sen. John Barrasso (R., Wyo.) said a proposed expansion to eligibility for Affordable Care Act subsidies would represent an “enormous betrayal,” according to the people.
Democrats said Republicans were simply opposing an expansion of the ACA and noted that the health law already bars the use of federal funds made available to consumers through subsidies and tax credits for most abortions, with some exceptions for rape, incest and when the life of a pregnant woman is in danger. Health plans on exchanges may cover other abortions, but they have to set aside separate funding so it doesn’t come from federal subsidies.
Republicans are also opposed to an effort to broaden eligibility for a second round of $1,200 stimulus payments. The first round of direct checks required recipients to have Social Security numbers to be eligible and excluded some American citizens who are married to or are children of immigrants who are working in the U.S. illegally, but paying U.S. income taxes.
The effort to reach an agreement on another round of aid to households and businesses struggling during the coronavirus pandemic whipsawed last week. Mr. Trump called off the negotiations on Tuesday after a phone call with top Republicans, including Senate Majority Leader Mitch McConnell (R., Ky.). Mr. McConnell told Mr. Trump during that call that any agreement between Mr. Mnuchin and Mrs. Pelosi would be difficult to pass in the GOP-controlled Senate, according to a person familiar with the call.
Mr. Trump and the administration then pivoted to pushing for legislation focused on individual aid priorities, including assistance for airlines, before restarting talks on a broader package with Democrats. The $1.9 trillion offer made on Friday is the largest proposal from the Trump administration throughout the talks, which began in July and have dragged on for weeks.
Absent another relief deal, economists say, temporary layoffs will become permanent and more businesses will close, features of a typical recession rather than the temporary shock and quick rebound policy makers hoped for earlier this year.
The risks that Congress provides too little support to the economy are greater than the risks of providing too much, Federal Reserve Chairman Jerome Powell said last week. The former could lead to a longer, weaker recovery, he said.
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8