(Bloomberg) -- Prospects for a quick end to the stalemate over a new stimulus faded Monday with members of the House being told not to expect any action this week and many Senate Republicans rejecting the White House proposal for a deal.
President Donald Trump, well behind Democrat Joe Biden in every recent poll, again attempted to prod negotiations by urging the GOP by tweet to cut short confirmation hearings for his Supreme Court nominee, Judge Amy Coney Barrett, and focus on bolstering the economy. He amplified that in a later tweet in which he said Republicans should be “strongly focused” on a stimulus package.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are expected to talk more this week as they attempt to bridge the gap between the Democrat’s $2.2 trillion proposal and the administration’s $1.8 trillion counteroffer. However, neither side has announced any schedule.
Even if they manage to strike a deal, there’s almost no chance of getting legislation written and passed by Congress before the Nov. 3 election, in which control of the White House and the Senate is at stake.
House Majority Leader Steny Hoyer, a Maryland Democrat, sent out a notice to lawmakers Monday saying “that due to the Trump Administration’s failure to reach an agreement on coronavirus relief, no votes are expected in the House this week.” The House is not in session this week and most members are away from Washington. But they remain on 24-hour standby, though, should an agreement be reached.
Trump’s changes in direction last week -- first calling off talks in a tweet, then saying he wanted a bigger package than even Democrats have proposed -- may have hardened Pelosi’s resolve to hold firm. On Sunday she called the White House offer a “miserable and deadly failure.”
Investors took the standoff in stride. U.S. stocks climbed to the highest in almost six weeks, fueled also by a rally in big technology companies, which Trump highlighted in a tweet Monday morning.
“The stimulus stalemate still looms large, though it failed to derail the market,” said Chris Larkin, managing director of trading and investment product at E*Trade Financial.
One big issue for the administration may be Senate Republicans.
Multiple GOP senators participating in a Saturday conference call told Mnuchin and White House Chief of Staff Mark Meadows that any agreement with Democrats that ends up around $2 trillion is too much, according to two people familiar with the call.
One of the people said Mnuchin’s offer to Pelosi wouldn’t have enough Republican votes to pass the Senate without major changes.
Some senators said that the spending levels being discussed were unacceptable and that ballooning the deficit will damage their standing with voters. Others said that a deal of that size would hand Pelosi and the Democrats a major victory right before the election, said the person, who spoke on condition of anonymity.
There also were objections to some of the policies, including expanding eligibility for the Affordable Care Act, which Republicans have been trying to dismantle, and aid to state governments.
Mnuchin and Meadows told the senators they would relay their concerns to the president, who last week urged the negotiators to “go big.”
Senate Majority Leader Mitch McConnell, who previously warned that some in the GOP won’t back another large stimulus package, has said there probably isn’t enough time to get any deal passed before the election.
Federal Reserve officials, led by Chairman Jerome Powell, have also stepped up their calls for a broad relief package to shore up the shaky U.S. economy.
Mnuchin and Meadows, in a letter Sunday directed at members of the House and Senate, again called for a more narrowly focused stimulus, citing the same areas as Kudlow.
“The all-or-nothing approach is an unacceptable response to the American people,” they wrote, a reference to Pelosi’s insistence that any relief package be broad and include provisions to stem the spread of the coronavirus and assist state and local governments.
Some lawmakers from both parties are pushing their leaders for a resolution.
“People in need can’t wait until February. 1.8 trillion is significant & more than twice Obama stimulus,” California Democratic Representative Ro Khanna wrote on Twitter. “Make a deal & put the ball in McConnell court.”
(Updates with later Trump tweet in second paragraph)
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