(Bloomberg) — The White House plans to offer a $1.8 trillion stimulus proposal in talks Friday between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, as a top Republican expressed skepticism any deal could get through Congress before the election.
After walking away from talks with Democrats earlier this week, President Donald Trump has reversed course and is now looking for a deal with the election three weeks away and polls showing him trailing Democrat Joe Biden.
“The president has approved a revised package. He would like to do a deal,” Trump economic adviser Larry Kudlow said Friday on Fox Business. “It will be relatively broad based but I can’t go through details.”
Three people familiar with the matter said the White House is increasing its proposal to $1.8 trillion from the roughly $1.6 trillion Mnuchin previously brought into negotiations. Pelosi is proposing the $2.2 trillion package the House has already approved.
Stocks jumped after Kudlow’s remarks, with the S&P 500 Index up 1% as of 12:25 p.m. They had tumbled on Tuesday, when Trump pulled his team from stimulus negotiations.
Kudlow spoke a short time after Senate Majority Leader Mitch McConnell said there’s probably not enough time before the election to bridge the “vast” differences on a new virus relief package.
“I believe that we do need another rescue package, but the proximity to the elections and the differences of opinion about what is needed are pretty vast,” McConnell said at an event in his home state of Kentucky.
Mitch McConnell departs a television interview in the Russell Senate Office Building in Washington, D.C., U.S. on Oct. 6.
Photographer: Stefani Reynolds/Bloomberg
Even if there is an agreement, it would take time to write legislative text, call lawmakers back to Washington and hold a debate and vote in Congress.
And even then, Republicans may be as big an obstacle to Trump as Pelosi.
McConnell has said that there are members of his GOP majority who think the government has already provided enough stimulus. House Republican leader Kevin McCarthy has also said his caucus members are skeptical of a large package. “We’d have to see what’s in it, but I think it’s difficult,” he said last month.
In his remarks Friday, McConnell specifically highlighted the “narrowly targeted” GOP package of about a half-trillion dollars that Democrats blocked as insufficient last month.
Pelosi said she and Mnuchin will be exchanging responses to questions each side had in their earlier conversations when they talk again on Friday.
“Part of it is about money, part is about policy,” she said on MSNBC. “We’ll see what they have to offer today.”
Nancy Pelosi at the Russell Senate Office Building on Oct. 8.
Photographer: Stefani Reynolds/Bloomberg
Pelosi sent a letter to House Democrats Friday morning criticizing Trump for not taking the pandemic seriously enough.
“The Administration does not share this priority of crushing the virus. The President does not have the capacity, leadership or plan for testing, tracing, and isolation that is needed,” Pelosi wrote. “Instead, Trump’s delay, denial, distortion of reality and disdain for science has exacted a deadly and preventable human toll.”
The two sides are are divided on the issues of how much money to provide state and local governments, language restricting Trump’s ability to divert anti-virus health care spending and the level and length of supplemental unemployment benefits. Dozens of smaller issues such as funding for election security and the Postal Service also remain.
The negotiations are proceeding against a frenzied backdrop, with the president recuperating from Covid-19 and the final stretch of the election campaign under way. Pelosi and Trump publicly questioned each other’s ability to perform their jobs on Thursday.
Read More: Pelosi and Trump Question Each Other’s Mental Faculties
The House speaker said Thursday there could be no action on a stand-alone bill to aid airlines or any other sector of the economy without an agreement with the White House and Republicans on a broader stimulus package.
Pelosi said airline aid could move through Congress before a comprehensive deal is voted on — but that would have to be advanced in the “context” of a broader bill. “I have made the case to my colleagues that this is a special case,” Pelosi said on Bloomberg TV.
“There is no stand-alone bill without a bigger bill,” she said. Pelosi has also said this week she is pressing for language that would limit Trump’s ability to divert virus testing and treatment funds to other projects.
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