The president wants to undo his decision to end COVID stimulus talks until after the election, but analysts say Biden would be better for the economy.
President Donald Trump abruptly instructed Treasury Secretary Steven Mnuchin to end negotiations over the next round of federal COVID-19 relief funding with House Democrats on Tuesday. The sudden move surprised lawmakers and shook Wall Street.
For months, lawmakers in the House and Senate have participated in stop-and-go negotiations over how much federal assistance to give individuals, state and local governments, and businesses. There had been some movement between the two sides over the past week, as Mnuchin and Speaker of the House Nancy Pelosi reportedly negotiated over the phone.
Those negotiations came to a sudden stop on Tuesday when the president took to Twitter and sent out a series of confusing tweets announcing his decision.
“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill,” Trump tweeted.
Later in the day Trump tweeted again, reversing his earlier statement and calling on Congress to approve assistance for airlines, small businesses, and stimulus checks for individuals.
“If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now,” he posted.
The mixed messages from the president come on the heels of large scale layoffs at companies like Disney, and United Airlines. Twenty-eight thousand employees at Disney lost their jobs and United Airlines could see about 40,000 layoffs. Other major airlines have announced pay cuts for their employees to avoid mass job loss.
Trump has repeatedly claimed that if Biden wins in November, Democrats will shut down the country and further damage the economy. However, investment bank Goldman Sachs has reportedly told its clients a blue shift would help the US economy.
Goldman Sachs noted that having additional Democrats in office would “sharply raise the probability” of a fiscal stimulus package soon after the inauguration. They went on to explain that a blue shift would “likely result in substantially easier US fiscal policy, a reduced risk of renewed trade escalation, and a firmer global growth outlook.”
Negotiations over federal coronavirus relief aid began back in May when House Democrats proposed a $3.4 trillion plan that included funding for state and local governments, stimulus checks for individuals, and funding for the postal service. They also included enhanced federal unemployment benefits which ran out well before lawmakers were even close to reaching an agreement.
Republicans in the Senate refused to consider that bill, saying the price was too high. Months later Republicans came out with their own proposal with far less funding, Democrats argued the plan was “emaciated” and that it didn’t provide nearly enough support.
In renewed negotiations last week, Democrats slimmed down their proposal, in part by shortening the length of certain programs.
“Democrats are making good on our promise to compromise with this updated bill, which is necessary to address the immediate health and economic crisis facing America’s working families right now,” Pelosi wrote in a letter to her caucus. “We have been able to make critical additions and reduce the cost of the bill by shortening the time covered for now.”
News of coronavirus aid negotiations ending until after the election next month shocked Wall Street and puzzled political leaders. His decision shifts the responsibility from Congress to the president which would make it more difficult for Republican lawmakers to blame Democrats for the stalemate.
“Make no mistake: if you are out of work, if your business is closed, if your child’s school is shut down, if you are seeing layoffs in your community, Donald Trump decided today that none of that matters to him,” Democratic presidential nominee Joe Biden said in response to the news on Tuesday.