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White House pivots again on stimulus negotiations after bipartisan backlash

Secretary of the Treasury Steven Mnuchin listens as U.S. President Donald Trump speaks to the press outside the White House on Wednesday, July 29, 2020 in Washington, D.C. Trump is scheduled to visit Texas later today.

SARAH SILBIGER, ABACA PRESS/TNS

By JEFF STEIN AND ERICA WERNER | The Washington Post | Published: October 11, 2020

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The White House again pivoted its approach to stimulus negotiations on Sunday, with the president’s aides pushing for immediate action on a narrow measure after the administration’s $1.8 trillion proposal was rebuffed by members of both parties.

In a letter to Congress sent Sunday, White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin asked lawmakers first to pass legislation allowing the Trump administration to redirect about $130 billion in unused funding from the Paycheck Protection Program intended for small businesses while negotiations continue on a broader relief effort.

The administration’s latest request is unlikely to advance in the House, where Speaker Nancy Pelosi, D-Calif., has rejected stand-alone legislation in favor of a comprehensive package to address the economic and health consequences of the coronavirus pandemic. The administration’s $1.8 trillion stimulus proposal on Friday came under heavy criticism from lawmakers in both parties during the weekend, making its chances of passing appear remote.

White House officials will request that Congress approve legislation allowing firms demonstrating a decline in revenue to apply for a second round of PPP funding, which they are not allowed to do under existing law, according to one person familiar with the plans who spoke on the condition of anonymity to discuss the administration’s internal planning.

“Now is the time for us to come together and immediately vote on a bill to allow us to spend the unused Paycheck Protection Program funds while we continue to work toward a comprehensive package,” Meadows and Mnuchin said in a letter to Congressional leaders.

The shift in strategy from the White House caps a week in which the president and his negotiators adopted a dizzying number of different approaches to securing a relief package through Congress. On Oct. 3, the president demanded Congress approve a relief package before three days, later abruptly calling off negotiations with Democrats, and then calling for action on only a handful of priorities, including airline relief and $1,200 stimulus checks. On Wednesday, Mnuchin and Pelosi began discussing a stand-alone measure to provide relief for the airline industry, but those talks were abandoned the next day as Trump again pushed for a wider agreement.

The confusion surrounding the administration’s position continued even as Mnuchin proposed a $1.8 trillion agreement to congressional leaders. On Friday, Trump said he wanted to see a “bigger” stimulus package than either the Democrats or the Republicans had called for. That same day, White House communications director Alyssa Farah told reporters that the White House wanted the final bill to cost “below $2 trillion.” Democrats have been pushing a $2.2 trillion bill as a compromise measure from their initial offer, which cost more than $3 trillion.

The administration’s $1.8 trillion bid was criticized heavily on Capitol Hill, with Pelosi saying it fell short in key areas and some Senate Republicans warning it amounted to a “betrayal” of long-standing GOP priorities. On a call with Mnuchin and Meadows on Saturday, Republicans such as Sens. Rick Scott of Florida, Mike Lee of Utah and Marsha Blackburn of Tennessee warned strongly against the proposal.

Pelosi reiterated her objections over the Mnuchin plan in a letter to her House Democratic colleagues on Sunday, stressing that the disagreement between the parties involves policy disputes and that both sides “remain at an impasse.” Pelosi has demanded in particular that the Trump administration adopt Democrats’ plan for robust testing and tracing to contain the novel coronavirus, which was part of the Heroes Act the House passed.

“The heart of the matter is: Can we allow the virus to rage on and ignore science, as the administration proposes, or will they accept the scientific strategic plan in the Heroes Act to crush the virus?” she said to her colleagues.

Lawmakers in both parties support an extension of the Paycheck Protection Program. More than a dozen moderate Democrats in the House have indicated support for a GOP-led procedural move that could force a floor vote on a stand-alone PPP bill, but it is not clear if the effort will secure enough support to require a vote on the House floor.

Few Democratic lawmakers have embraced Mnuchin’s proposal, although Rep. Ro Khanna, D-Calif., called for Pelosi to accept the offer of a $1.8 trillion stimulus on Sunday. “Make a deal & put the ball in McConnell court,” Khanna said on Twitter.

A spokesman for Pelosi did not return a request for comment about the bill.

White House officials have dismissed Pelosi’s objections and alleged she is trying to avoid giving Trump a political victory ahead of the November election. Larry Kudlow, the president’s top economic adviser, said on CNN on Sunday that the Senate would approve a stimulus agreement reached by Mnuchin and Pelosi, despite much of the caucus’s opposition.

“If an agreement can be reached here, they will go along with it,” Kudlow said.