November 28, 2020

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Pelosi Slams White House Over Stimulus Delay While Kudlow Says There’s ‘Virtually No Hope’

Topline

House Speaker Nancy Pelosi (D-Calif.) during a Thursday press briefing sharply criticized the Trump administration over its delay in negotiating the next tranche of federal coronavirus aid, especially with regard to the White House’s failure to accept Democrats’ proposed national testing and tracing plan. 

Key Facts

Hope for a stimulus agreement before the election—let alone the actual delivery of additional aid—has evaporated over the last two weeks, despite months of negotiations.  

On Thursday morning, Pelosi released a letter she sent to Treasury Secretary Steven Mnuchin, who has been negotiating the next relief package on behalf of the Trump administration. 

The letter detailed seven areas where Pelosi’s Democratic caucus is still waiting on answers from the administration: a national Covid-19 testing and tracing plan, state and local aid, school funding, childcare funding, changes to certain tax credits, federal unemployment insurance, and liability protections for workers. 

Those major outstanding issues suggest that Pelosi and Mnuchin weren’t ever as close to a deal as either suggested, despite the sustained messages of optimism from both camps over the last weeks and months. 

Crucial Quote

“We are in a terrible place,” Pelosi said during the briefing, responding to a question about whether she should show more flexibility in working with Senate Republicans on a deal in the event of a lame-duck session. She suggested that the virus provisions in Republican offerings thus far, and in the White House offering, have been inadequate to address the needs of the country during the pandemic. “It was a decision made by this President of the United States,” she continued. “So we have to have enough money to address [Covid-19 testing, tracing, and treatment], and we still haven’t gotten the rest from the White House on that subject.”

Key Background 

On Thursday morning, the Commerce Department released new data showing that the economy likely grew 7.4% in the third quarter (or 33.1% on an annualized basis), up from losses of 9.5% (or an annualized 31.4%) in the second quarter. Asked whether Trump could be credited for the boost, Pelosi responded that “the CARES Act deserves credit for that.” She was referring to the $2.2 trillion economic stimulus package—the largest in American history—that lawmakers passed in the spring with overwhelming bipartisan support. The CARES Act included unemployment insurance, small business aid, direct payments to individuals, and other measures that economists agree are responsible for staving off major economic damage in the spring and summer. The third quarter gains account for about two-thirds of the economic losses caused by the pandemic, meaning that while some progress has been made towards recovery, there’s still a long road ahead. Continued recovery in the fourth quarter is far from guaranteed, and will be threatened by an alarming uptick in new cases of the virus and the potential for new lockdown measures. Experts generally agree that another rescue bill is necessary to sustain the recovery.

Chief Critic

“Our team now believes that the Speaker has no intention of compromising on key issues,” White House economic advisor Larry Kudlow told Fox News’ Sandra Smith on Thursday morning. “She is going to hold up key assistance, like the PPP small business assistance and unemployment assistance. She is stringing us along and basically we think there’s virtually no hope for these tests.”

Tangent

In a Wednesday interview with MSNBC, Pelosi said she was hopeful that the stock market’s recent plunge would encourage President Trump, who has long touted the stock market as a bellwether of his administration’s economic success, to return to the negotiating table after the election. As coronavirus cases surge around the country and the prospect of more federal aid has dimmed, stocks are on track for their worst week since March.

Further Reading

Pelosi Says Stock Market Plunge Will Bring Trump Back To The Stimulus Negotiating Table (Forbes)

Stocks Just Had Their Worst Day In Four Months–Here’s How The Election Could Make Things Worse (Forbes)

45% Of Voters Say Trump And GOP Are To Blame For Stimulus Breakdown (Forbes)

Stimulus All But Dead Before The Election—Here’s What That Means For Struggling Americans (Forbes)

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