White House telegraphs willingness to increase stimulus offer

Erik Wasson, Jordan Fabian and Laura Litvan Bloomberg

The White House strongly signaled Wednesday that it is willing to increase its offer in talks with Democrats and that Senate Republicans should go along in order to seal a stimulus deal in the next week to 10 days.

Chief of Staff Mark Meadows said President Donald Trump is open to the compromise $1.52 trillion stimulus proposal from a bipartisan group of House lawmakers that was an effort to break a months-long deadlock over bolstering the U.S. economy amid the pandemic.

The long-shot plan from a 50-member group of House Democrats and Republicans has a bigger total spending figure than the administration previously endorsed. It’s also higher than what Senate GOP leaders say would be acceptable to Republicans.

Meadows said on CNBC that the amount is not a “show-stopper.” But House Speaker Nancy Pelosi has called it insufficient, while Senator John Thune, the chamber’s second-ranking Republican, said a $1.5 trillion stimulus would cause “a lot of heartburn” for GOP lawmakers.

Trump on Twitter urged Republican lawmakers to accept a higher level of spending.

After initially proposing a $1 trillion stimulus at the end of July, Senate Republicans attempted to advance a bill providing $650 billion in economic aid, without the direct payments to individuals the president – and Democrats – want. That was blocked by Democrats, who said it didn’t do enough to address the continuing Covid-19 crisis.

Senate Majority Leader Mitch McConnell declined to comment when asked about Trump’s call for Republicans to go higher. Negotiations on the stimulus have been handled by Pelosi, Senate Democratic leader Chuck Schumer, Meadows and Treasury Secretary Steven Mnuchin.

The Problem Solvers Caucus plan was developed over six weeks with the knowledge of the White House and leadership from both parties. But the track record of bipartisan groupings of moderates in either the House or Senate to broker major deals has been poor in recent years.

Democratic U.S. Rep. Elissa Slotkin, a member of the caucus, said she was disappointed by Pelosi and other Democratic leaders rejecting the option as the start of negotiations, saying the American public expects Congress to put politics aside and make a deal. 

"I was pretty frustrated yesterday when I saw the response from House leadership because our proposal is very reasonable. It’s very serious. It’s a bridge through February 2021, so the results of the election would be known and we could then negotiate as needed beyond February," said Slotkin, a Holly Democrat. 

Pelosi did agree — under presssure from Slotkin and other front-line Democrats in competitive districts — to keep the House in session until a deal is made.

“That was a change,” Slotkin said. “If we are going to go back to our districts, we better be doing it knowing we’ve done everything we could to respond to Covid. There’s not an hour that goes by in the district that people don’t ask me the state of the next Covid emergency bill.”

The proposal from the Problem Solvers Caucus offered compromises on the thorniest issues in the stalled talks. On aid to state and local governments, the group is backing about $500 billion, splitting the difference between the $915 billion sought by Pelosi and Schumer and the $150 billion put forward by the White House.

Meadows said the $500 billion figure is more than the White House estimates that states have lost in revenue due to the pandemic, but added that the administration could accept a figure in the $250 billion-$300 billion range.

Another fault line in talks has been the level of supplemental jobless benefits. The Problem Solvers proposed $450 a week for eight weeks, and then a transition to benefits of 100% of salary or $600, whichever is lower. That is a compromise between the $600 flat rate Democrats want – the same as expired in July – and the $300 Trump has backed.

Under the Problem Solvers plan, total spending could increase to about $2 trillion if the pandemic continues, or shrink to $1.3 trillion if it subsides more quickly than expected. The White House had previously been willing to back about $1.1 trillion.

House Majority Leader Steny Hoyer on Tuesday said Democrats shouldn’t agree to less than $2 trillion. A group of House Democratic chairmen issued a statement criticizing the Problem Solvers proposal as inadequate. Pelosi earlier on MSNBC Wednesday reinforced her demand for $2.2 trillion.

“We did come down,” Pelosi said of her willingness to compromise. “We can only go so far.”

Trump’s new push for a deal highlights continuing divisions among Republicans, some of whom are reluctant to spend more money on stimulus with the national deficit reaching $3.3 trillion this year.

Missouri Republican Senator Roy Blunt said a number higher than $1 trillion can be the basis for an agreement, if it can be done quickly.

“I think there is a deal to be had here,” he told reporters at the Capitol. “My concern is that the window probably closes around the end of this month. And we need to get busy finding out what we can all agree on.”

But other senators resisted the idea.

Wisconsin Senator Ron Johnson said the Senate GOP bill, which costs about $300 billion when its cuts to Federal Reserve loan authority are counted, is the right amount.

“The president has his opinion. We have ours,” he told reporters.

“I need to see what it would be for and how it would be spent,” John Kennedy, a Louisiana Republican, said. “And if a bill is chock full of spending porn as Speaker Pelosi’s bill is, I’m not going to vote for it.”