October 29, 2020

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Pelosi Tells White House It Has Until Tuesday to Reach Relief Deal Before Election

House Speaker Nancy Pelosi (D., Calif.) told the White House it had until Tuesday to reach a deal with Democrats, or legislation to provide additional coronavirus relief to struggling households and businesses couldn’t be passed before the election.

“That depends on the administration,” Mrs. Pelosi said Sunday on ABC’s “This Week,” when asked about whether a deal could still be struck. The 48-hour deadline “only relates to if we want to get it done before the election, which we do,” she said.

If Tuesday evening passes without reaching an agreement, negotiations could continue, but would be unlikely to produce sweeping relief legislation worth trillions of dollars within the next two weeks, an aide to Mrs. Pelosi said. The election could create new political uncertainties that could make an agreement even harder to reach after Nov. 3.

Republicans and Democrats have been sparring for months about a new deal. Some of the programs passed in the spring—including the federal $600 weekly supplements to workers who lost jobs—have expired.

President Trump recently said he could support even more than the White House’s latest $1.88 trillion proposal, though it isn’t clear Senate Republicans would get behind it. Mrs. Pelosi and Treasury Secretary Steven Mnuchin spoke Saturday night. After the conversation, her spokesman said there were an array of differences that still needed to be worked through.

The political incentives for lawmakers and the White House could change after the election. If Democrats win back the White House and potentially the Senate, currently controlled by Republicans, they might feel less incentive to compromise with Mr. Trump if they believe they can pass a bigger relief package under a new administration. Mr. Trump might also be less open to compromise, depending on the outcomes.

“If this does not get done before the election, I am afraid the soonest we would be able to get to any kind of Covid relief is well into February,” when Mr. Trump is beginning a second term or Democratic nominee Joe Biden is beginning his first, Rep. Tom Reed (R., N.Y.), who has been pushing for the White House and Mrs. Pelosi to reach a deal, said last week.

The White House’s $1.88 trillion proposal also narrowed the difference in overall spending with House Democrats, who passed a $2.2 trillion relief bill earlier this month. The two sides have remained entrenched in disagreements over significant policy issues, including how much funding to provide state and local governments and whether to include legal protections for businesses and other entities operating during the pandemic.

President Trump recently said he could support even more than the White House’s latest $1.88 trillion proposal.



Photo:

Alex Brandon/Associated Press

Mrs. Pelosi and Mr. Mnuchin did make progress on provisions around a national plan for testing, but are still working on components of it. Mrs. Pelosi said Sunday they were still resolving differences over a national plan for testing and contact tracing of the coronavirus and, in particular, how to address its disproportionate impact on Black and Hispanic communities.

Mr. Mnuchin said last week that the White House would largely accept what the Democrats had requested in terms of a national plan for testing and tracing, but Mrs. Pelosi said Sunday the administration had pushed to water down the language and still leave many decisions up to state governments.

“The heart of the matter is to stop the spread of the virus,” she said.

A spokeswoman for Mr. Mnuchin said Saturday night that he had spoken with Mrs. Pelosi for an hour and 15 minutes and that the two were expected to talk again on Monday, following discussions between their staffs on Sunday.

A Treasury spokeswoman didn’t immediately return a request for comment.

Mrs. Pelosi said the two sides also have differences to resolve over how much funding to provide for state and local governments, child-care facilities and various tax provisions. She indicated that Republicans have resisted Democrats’ call to partially reverse changes that Congress made in March’s economic-relief law.

Back then, lawmakers agreed to relax rules on how businesses can use losses incurred in 2018 through 2020 to offset past and current income. Democrats later argued that the provision gave away too much tax revenue to companies and high-income business owners.

Democrats in their recent legislation proposed preventing corporations from taking current losses and claiming them against taxes paid at the old 35% tax rate.

Mr. Trump, after stopping the negotiations earlier this month, has recently made clear he wants to reach a bipartisan agreement and would support a package even larger than the $1.88 trillion proposal from the administration.

“I’m ready to sign a big, beautiful stimulus,” Mr. Trump said in an NBC town hall Thursday night.

Even if Mrs. Pelosi and Mr. Mnuchin are able to reach an agreement, many Senate Republicans have said they are opposed to spending close to $2 trillion on another relief package, and it is unclear if Mr. Trump would be able to persuade enough of them to support it.

GOP aides and lawmakers said there was deep opposition in the Senate to authorizing nearly $2 trillion in new relief, on top of the roughly $3 trillion in federal aid that Congress has approved in coronavirus relief since March. Some Senate Republicans don’t support any additional spending, while for others anything over $1 trillion is too much to swallow. A handful of GOP senators in close re-election fights, however, have signaled they would support a higher number.

“If Speaker Pelosi ever lets the House reach a bipartisan agreement with the administration, the Senate would of course consider it. But Americans need help now,” Senate Majority Leader Mitch McConnell (R., Ky.) said Saturday.

Mr. McConnell said he would bring to the Senate floor this coming week a roughly $500 billion relief bill including funding for schools, federal unemployment insurance and funds for vaccine distribution, among other measures. The Senate will also vote Tuesday on a separate bill providing additional funds for the Paycheck Protection Program, a $670 billion federal initiative that provides forgivable government-backed loans to small businesses grappling with the economic fallout of the pandemic. Authorization for PPP expired in August with roughly $130 billion of the funds left over.

Republicans said time was running out for the Senate to consider any new relief bill before Election Day, since the chamber is expected to spend the last week of October voting on Supreme Court nominee Amy Coney Barrett.

“If Democrats do not obstruct this legislation, we will have time to pass it before we turn to Judge Barrett’s nomination immediately after it comes out of committee,” Mr. McConnell said Saturday.

Democrats are expected to block the latest Senate GOP bills, which they have said are inadequate to meet the needs of the pandemic, holding out for a sweeping deal instead.

The president has expressed confidence that he would be able to flip reluctant Republicans.

“If we agree to something, the Republicans will agree to it,” Mr. Trump said Thursday night.

Write to Kristina Peterson at kristina.peterson@wsj.com

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