Stimulus update: negotiations in bad shape despite upbeat speech


As one person involved told CNN on Sunday night, “No idea how we’re doing it at this point. Simply exceptional. ”

Negotiators on both sides emerged from a more than three-hour meeting on Saturday with by far the most positive words on the situation. What it really highlighted was how messy these discussions have been. The meeting was productive as negotiators left with a better understanding of the full extent of disagreements (and areas of potential agreement), according to two sources. Not because they had made progress towards a real deal.

What to read

A great recap of a day that underscored Saturday’s optimism was shortsighted.

What to watch

Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows will return to Capitol Hill to meet with President Nancy Pelosi and Democratic Senate Leader Chuck Schumer.

The frame

To understand why the two sides remain so far apart, it’s worth comparing how each defines the scale of the crisis. Mnuchin, during discussions on the first $ 2.2 trillion CARES law, dismissed concerns about deficits due to historically low borrowing costs and the urgency of the moment. That has changed – on Sunday he made a point of highlighting concerns about the increase in the national debt in the next round.

This is how Pelosi put it in a letter to his fellow House Democrats on Saturday night:

“All parties must understand the gravity of the situation in order to reach an agreement that protects the lives of Americans, their livelihoods and the life of our democracy. ”

There are a large number of political differences here, but the biggest issue throughout the first week of actual negotiations has been the lens through which both sides view the scale of the current crisis. And until that starts to merge, at least a little bit, there’s no deal to be made.

Le timing

Political delays, at least so far, have not triggered a deal. The Senate is due to leave for the August recess at the end of this week, but there is no sense that anything will meet until then. Neither side wants to leave town for a month without reaching a deal, but at this point that deal – and then the process of getting it through both chambers – is still a long way off.

“I’m not optimistic that there will be a very short term solution,” Meadows said on CBS’s “Face the Nation”.

Keep a pin in it

If and when a deal is struck, things are not going to move quickly. The Senate can move at the speed of light when everyone agrees. But it only takes one senator to slow the process down and make it take days. There will be far more than one Republican Senator with significant objections to any final product. This almost certainly means that it will take a few days for the Senate to process and pass any final agreement.

Something to watch out for

Things start to get real when the relevant committees of both chambers start to kick in and work on legislative proposals. Obviously this has not happened yet. But if and when that happens, it will be a signal that things are really starting to move.

Address the “unilateral” idea

There have been discussions for several weeks that the White House might consider pursuing unilateral options to deal with the economy if it feels a deal with the Democrats is out of reach. On Capitol Hill, those who knew about the speech mostly laughed at it. But it spilled over into public view Monday with the Washington Post reporting it was becoming a very real option given the distance between the two sides.

Let’s go ahead and tackle this front: There is nothing the White House can do unilaterally about unemployment benefits. There is nothing they can do to send another round of stimulus checks. They can’t do anything about the liability guarantees. There is only so much they can do about a moratorium on evictions. There is nothing they can do to allow hard-hit small businesses to access a second Paycheck Protection Program loan.

Improved unemployment benefits expired overnight: here is where congressional negotiations stand

In short: can the White House do some things unilaterally? Sure. Can they do something that actually makes a difference or addresses one of the key areas Democrats * and * Republicans recognize need to be in the next round of emergency aid? Nope. Remember, stories like this crop up at times when negotiations seem like they need a shake up.

The biggest delays

(Again, these are the most important pieces. There are dozens of smaller issues that will also create disagreements or issues that negotiators haven’t really come to terms with yet, according to sources.)

  • Federal unemployment benefits

Areas of agreement

  • Paycheque Protection Program

On the horizon

It’s still unclear what, if anything, will start to move negotiations forward towards a broader deal, so keep an eye on the Senate floor this week. Senate Majority Leader Mitch McConnell has drafted a bill and amendments for later in the week that could force votes up or down on a range of policy issues, including an extension reduced federal unemployment benefits.

It doesn’t make sense that this will divide Democrats, but sometimes legislative action of any kind can spark talks outside the regular leadership structure. Maybe that’s what’s going on here. Or it could just be another war of partisan messages on the ground. Stay tuned!


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