House Speaker Nancy Pelosi, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows made clear in separate interviews Sunday that they remain far apart on a coronavirus relief deal that would restore expired unemployment benefits for millions of Americans.
The three spoke on the Sunday TV news shows a day after a rare weekend meeting at the Capitol yielded some signs of progress. They plan to meet again today, but they pointed to multiple areas of disagreement that suggest consensus remains elusive.
Meanwhile, a senior Federal Reserve official said Sunday that the surging U.S. savings rate means the country can afford to support laid-off Americans, while a "hard" lockdown could deliver a faster economic recovery.
"We still have a long ways to go," Meadows said on CBS' "Face the Nation." "I'm not optimistic that there will be a solution in the very near term."
Pelosi, D-Calif., who has been pushing for a comprehensive bill to address multiple economic and health care needs, said the administration continues to resist a public health strategy to attack the virus.
"That is one of the points we still have not come to any agreement on," Pelosi said on ABC's "This Week." She reiterated that she would reject a so-called skinny bill in favor of a sweeping package.
Mnuchin defended the administration's response to the pandemic, while pointing to Democrats' demands for $1 trillion in new state and local aid as a nonstarter.
"The Democrats right now are insisting on over $1 trillion to state and local governments, and that's something we're not going to do," Mnuchin said on ABC.
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Pelosi, Mnuchin and Meadows have met almost daily at the Capitol for the past week along with Senate Minority Leader Charles Schumer, D-N.Y., as they try to craft a new relief bill.
The Senate is scheduled to leave for a monthlong recess by the end of the week, but it is unclear whether lawmakers will be able to reach a deal by then.
After struggling to reach agreement among themselves on an overall bill, Republicans and administration officials have been pushing for a short-term fix to address the expiration of $600 weekly enhanced unemployment benefits, which lapsed Friday for some 30 million workers.
Democrats continue to resist a short-term approach, and they rejected an administration proposal to extend the $600 benefit for an additional week to give more time to negotiate. Pelosi has said that idea was pointless since the parties were not close to a deal.
"We will be close to an agreement when we have an agreement," she said Sunday.
ECONOMIC STRUGGLES
Federal Reserve Bank of Minneapolis President Neel Kashkari said on "Face the Nation" that Americans are saving more because they aren't going out as much during the pandemic, and as a result there would be less need to borrow from abroad to finance additional fiscal aid.
"So while historically we would worry about racking up too much debt, we're generating the savings ourselves. That means Congress has the resources to support those who are most hurting," he said.
"Right now the U.S. can fund itself at very, very low rates. Congress should use this opportunity to support the American people and the American economy."
Fed officials, after cutting interest rates aggressively, have repeatedly pointed out the need for more support from the fiscal side to help the nation endure the pandemic. The U.S. central bank last week left interest rates near zero and pledged to use all its tools to support the economy, which shrank at a record pace in the second quarter as the virus spread.
Hopes of a speedy rebound have been dimmed as high-frequency economic indicators suggest a stall in activity given rising or persistently high infection rates in much of the country.
Kashkari said the economy's path would hinge on success in getting the pandemic under control, and he suggested that while very unpopular, a stringent economic lockdown might be the lesser of two evils to more quickly restore growth and hiring, rather than waiting for the eventual arrival of a vaccine.
"If we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it," Kashkari said.
"If we don't do that, and we just have this raging virus spread throughout the country with flare-ups and local lockdowns for the next year or two, which is entirely possible, we're going to see many, many more business bankruptcies."
JOBLESS BENEFITS
Republicans have proposed reducing the $600-a-week federal jobless payment to $200, or adopting a formula that would amount to replacing about two-thirds of what a worker earned before becoming unemployed. They have consistently argued that the $600 enhanced benefit, which comes on top of whatever is provided in state unemployment, is so generous that it creates a disincentive for people to return to the workplace.
Mnuchin repeated that argument Sunday, while acknowledging it was not always the case.
"Let's just face it, we know factually there are cases where people are overpaid. There are cases where people are underpaid," he said.
For many low-wage workers, the benefits have amounted to a bump in pay from what they were earning. Studies have estimated that between 40% and 68% of people on unemployment insurance are making more with the extra $600 than they were at work.
But some preliminary studies on the issue have not found the temporary bump is a disincentive for a noticeable number of workers. A recent study by three Yale economists found that workers receiving the extra benefits returned to work at roughly the same rate as others, with "no evidence that more generous benefits disincentivized work."
Pelosi suggested that Democrats could be open to an approach that reduced the $600 over time as the unemployment rate declines. The idea has already been embraced by a number of congressional Democrats.
"The amount of money that is given as an enhancement for unemployment insurance should relate to the rate of unemployment, so as that goes down you can consider something less than $600, but in this agreement it's $600," Pelosi said.
Many economists believe the expiration of the enhanced benefits, which were approved in March as part of Congress' $2 trillion Coronavirus Aid, Relief and Economic Security Act, will be a drain on the economy, since the extra money allowed workers to pay rent and buy groceries and other necessities. A moratorium on evictions also recently expired, and the administration has discussed renewing that as part of a short-term fix that could include other elements, such as more money for schools and the small-business Paycheck Protection Program.
House Democrats passed a $3 trillion bill in May that would have extended the $600 enhanced benefits through January, and they remain publicly united behind that measure, arguing that another significant infusion of cash is necessary. They have expressed anger that Republicans waited months to start negotiating again, only to quickly run up against the unemployment insurance deadline and start demanding a short-term solution.
Mnuchin defended the GOP approach, saying it made sense to wait and see how the programs Congress approved in the spring had worked. Four bipartisan bills passed in March and April injected around $3 trillion into the economy.
"That has never been done in the history of time," Mnuchin said.
But now, Mnuchin said, "The president is determined to spend what we need to spend, and we're acting very quickly now. ... We're going to work every day until we reach a reasonable agreement that's good for the American public."
Most lawmakers of both parties agree on the need for more action from Congress, although Senate Majority Leader Mitch McConnell, R-Ky., has said about 20 Senate Republicans believe no additional action is needed, in part because of deficit concerns.
"We have to balance -- there's obviously a need to support workers, to support the economy, people who through no fault of their own are shut down because of this terrible disease," Mnuchin said. "On the other hand, we have to be careful about not piling on enormous amounts of debt for future generations."
Information for this article was contributed by Erica Werner, Eli Rosenberg and Jeff Stein of The Washington Post; by Emily Cochrane of The New York Times; and by Alister Bull of Bloomberg News.