Democrats Prepare New Stimulus Plan as Time Wanes for a Compromise
WASHINGTON — Speaker Nancy Pelosi of California and top Democrats on Thursday moved forward with the development of a roughly $2.4 trillion stimulus bill that would provide pandemic aid to American families, restaurants and airlines, amid growing pressure from moderates who demanded additional action before lawmakers leave Washington next week to campaign for re-election.
The move to present a new package was the first sign of movement in a tortured round of negotiations between Democrats and the White House that have been stalled since early August, and it came as Steven Mnuchin, the Treasury secretary, said he and Ms. Pelosi had agreed to revive those talks. But it was far from clear that the measure Democrats had in mind, whose cost is about $1 trillion more than the Trump administration has signaled it could accept, would lead to a deal.
Ms. Pelosi privately told top Democrats that the House could vote on it anyway, which would allow anxious Democrats who have been quietly agitating for more action on a stimulus measure to at least register their support for additional relief. Earlier in the week, she instructed lawmakers to begin work, a move previously reported by Politico.
“We are still striving for an agreement,” Ms. Pelosi told top Democrats in a private meeting on Thursday, according to a person familiar with the remarks who disclosed them on the condition of anonymity. “If necessary, we can formalize the request by voting on it on the House floor.”
The measure being drafted is substantially smaller than the $3.4 trillion package the House approved in May, but it is expected to contain some of the same elements, as well as additional funding for needs Ms. Pelosi said had emerged in recent months.
Ms. Pelosi had previously vowed that the House would not leave for the November elections without additional action on a stimulus measure, but it was not clear what form that would take. In recent days, a number of rank-and-file lawmakers have signaled that they are growing impatient, with some endorsing a bipartisan framework worth as much as $2 trillion and others contemplating endorsing a Republican bid to force a vote on a narrower bill to revive a lapsed small-business loan program.
It remains unclear, however, whether the Trump administration would approve a plan much larger than the $1.5 trillion Mr. Mnuchin had indicated was the maximum the White House could accept. Testifying before the Senate Banking Committee on Thursday, he urged lawmakers to provide more fiscal support in a narrow bill that includes provisions that both Republicans and Democrats agree on.
Senate Republicans this month coalesced around a bare-bones bill that would provide about $350 billion, but failed to advance it over Democratic objections that it was inadequate.
“If Democrats are willing to sit down, I’m willing to sit down any time for bipartisan legislation in the Senate,” Mr. Mnuchin said. “Let’s pass something quickly.”
A Treasury Department spokeswoman did not respond when asked about the timing of new stimulus talks.
“We’re really focused on trying to get a negotiated deal — the reason being that a message bill is one thing, but we want to get something signed so people get money,” Representative Steny H. Hoyer of Maryland, the majority leader, said after the meeting where Democrats discussed how to move forward with the bill.
Representative Richard E. Neal of Massachusetts, the chairman of the Ways and Means Committee, told reporters: “The contours are already there. I think it’s about time frame and things like that.”
He said the decision to compile another package and work to restart negotiations was in part prompted by Jerome H. Powell, the Federal Reserve chair, who has pressed repeatedly for additional stimulus legislation. As jobless claims continue to rise and funding for supplemental unemployment benefits begins to lapse, airline industry executives have been lobbying hard for more money to stave off widespread job cuts and the restaurant sector is increasingly nervous about losing more business when it becomes too cold to dine outside.
“I am hopeful that this will get Republicans to the table to deliver much-needed aid to the American people,” Representative Stephanie Murphy, Democrat of Florida, told reporters on Thursday. “Shame on them if they can’t come to the table when we have consistently been working on a proposal to give much-needed resources out to the communities.”
Even if Republicans do not support the legislation, she said, “we should vote on it because there are Americans who need assistance.”
White House officials have publicly expressed confidence in the trajectory of economy, but rising jobless claims and jittery stock markets could add to the urgency Republicans feel to approve additional stimulus before the election. But in testimony on Thursday, both Mr. Mnuchin and Mr. Powell made it clear that further policy support would be important to sustaining the robust pace of a rebound from the pandemic downturn.
The $2.2 trillion stimulus law that Congress approved in March “provided great support and should get a lot of the credit for the recovery we’ve had so far,” Mr. Powell said, noting that people have money in the bank and are now able to sustain their spending.
“The risk is that they’ll go through that money ultimately and have to cut back on spending, and maybe lose their home or lose their lease,” he added. “That is the downside risk of no further action.”
Mr. Mnuchin asked lawmakers to give him the authority to use $130 billion left over in the Paycheck Protection Program, a loan program for small businesses that expired in early August, so that some firms can apply for second loans.
But lawmakers pushed the two men for details on how they might repurpose funds earmarked for central bank lending facilities through the first rescue package. While Congress handed the Treasury $454 billion to back up the programs, more than $250 billion of that is not yet earmarked.