WASHINGTON -- In a letter to Congress sent Sunday, White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin asked lawmakers to first pass legislation allowing the Trump administration to redirect about $130 billion in unused funding from the Paycheck Protection Program intended for small businesses while negotiations continue on a broader relief effort.
White House officials will request that Congress approve legislation allowing firms demonstrating a decline in revenue to apply for a second round of Paycheck Protection Program funding, which they are not allowed to do under existing law, according to one person familiar with the plans who spoke on the condition of anonymity to discuss the administration's internal planning.
"Now is the time for us to come together and immediately vote on a bill to allow us to spend the unused Paycheck Protection Program funds while we continue to work toward a comprehensive package," Meadows and Mnuchin said in a letter to congressional leaders.
"The all-or-nothing approach is an unacceptable response to the American people," they said in the letter, which was posted on Twitter by Treasury spokeswoman Monica Crowley.
The administration's latest request faces an uphill battle in the House, where Speaker Nancy Pelosi, D-Calif., has rejected stand-alone legislation in favor of a comprehensive package to address the economic and health consequences of the coronavirus pandemic.
The administration's $1.8 trillion stimulus proposal on Friday came under criticism from lawmakers in both parties over the weekend, making its chances of passing appear remote.
Republicans "want to do stimulus," Trump said on Fox's "Sunday Morning Futures."
"We want to help the airlines again, because the airlines -- always a tough business," Trump said. "We want to help the restaurants, hotels."
The shift in strategy from the White House caps a week in which the president and his negotiators adopted a number of different approaches in an effort to secure a relief package with Congress. On Oct. 3, the president asked Congress to approve a relief package, later calling off negotiations with Democrats, and then calling for action on a few priorities, including airline relief and $1,200 stimulus checks for all Americans.
On Wednesday, Mnuchin and Pelosi began discussing a stand-alone measure to provide relief for the airline industry, but those talks were abandoned the next day as Trump again pushed for a wider agreement.
Mnuchin proposed a $1.8 trillion agreement to congressional leaders. On Friday, Trump said he wanted to see a "bigger" stimulus package than either the Democrats or the Republicans had called for. That same day, White House communications director Alyssa Farah told reporters that the White House wanted the final bill to cost "below $2 trillion." Democrats have been pushing a $2.2 trillion bill as a compromise measure from their initial offer, which cost more than $3 trillion.
The administration's $1.8 trillion bid was criticized on Capitol Hill, with Pelosi saying it fell short in key areas and some Senate Republicans warning it amounted to a "betrayal" of long-standing GOP priorities. On a call with Mnuchin and Meadows on Saturday, Republicans such as Sens. Rick Scott of Florida, Mike Lee of Utah and Marsha Blackburn of Tennessee warned strongly against the proposal.
NO FROM PELOSI
Pelosi reiterated her objections over the Mnuchin plan in a letter to her House Democratic colleagues on Sunday, stressing that the disagreement between the parties involves policy disputes and that both sides "remain at an impasse." Pelosi has in particular demanded that the Trump administration adopt Democrats' plan for robust testing and tracing to contain the novel coronavirus, which was part of the Heroes Act the House passed.
"The heart of the matter is: Can we allow the virus to rage on and ignore science, as the administration proposes, or will they accept the scientific strategic plan in the Heroes Act to crush the virus?" she said to her colleagues.
Lawmakers in both parties support an extension of the Paycheck Protection Program. More than a dozen moderate Democrats in the House have indicated support for a GOP-led procedural move that could force a floor vote on a stand-alone PPP bill, but it is not clear if the effort will secure enough support to require a vote on the House floor.
Few Democratic lawmakers have embraced Mnuchin's proposal, although Rep. Ro Khanna, D-Calif., called for Pelosi to accept the offer of a $1.8 trillion stimulus Sunday. "Make a deal & put the ball in [Sen. Mitch] McConnell court," Khanna said on Twitter.
A spokesman for Pelosi did not return a request for comment about the bill.
White House officials have dismissed Pelosi's objections and alleged she is trying to avoid giving Trump a political victory ahead of the November election.
Larry Kudlow, the president's top economic adviser, said on CNN on Sunday that the Senate would approve a stimulus agreement reached by Mnuchin and Pelosi, despite much of the caucus's opposition.
"If an agreement can be reached here, they will go along with it," Kudlow said.
He said earlier he expects Mnuchin and Pelosi to hold more talks this week. Mnuchin may increase the amount of aid the administration is offering, Kudlow said on CNN's "State of the Union." He didn't elaborate.
KUDLOW UPBEAT
While a stimulus deal isn't essential to the U.S. recovery from the coronavirus pandemic, "I don't think it's dead at all," Kudlow said. "All I'm saying is some targeted assistance would go a long way right now."
Kudlow was asked about Federal Reserve Chair Jerome Powell's call last week for more government spending to protect the recovery.
Kudlow said the new stimulus was "just getting Americans through a difficult period of time" as the economy bounces back from shutdowns and other measures taken to control the coronavirus.
"I don't want to parse, but I don't think the recovery is dependent on it," he said.
The U.S. will post strong economic growth in the third and fourth quarters, Kudlow said, bouncing back from the historic dive in the second quarter.
The U.S. economic recovery has "flattened out" and is in vital need additional support from fiscal policy, said Federal Reserve Bank of Minneapolis President Neel Kashkari.
"We're going to continue to see a grinding, very slow recovery, with thousands of small businesses around the country going bankrupt," Kashkari said in an interview Sunday on CBS's "Face the Nation." "That's why it's so vital that our elected leaders come together to take more action."
"Obviously we're close to an election and I imagine that those things are getting involved in the dynamic," he said. "But if you look at the data the data is very clear. The strong recovery that we saw in June and July has really flattened out."
Fed officials have consistently urged lawmakers do more to support the recovery and extend fiscal support authorized when the virus was taking hold earlier in the year. They also point out that the Fed's own tools are limited when the greatest need is for taxpayer grants for U.S. businesses and households that the central bank isn't allowed to make.
The Fed held interest rates near zero at its policy meeting last month and signaled they'd stay there at least through 2023 to help the economy recover from the coronavirus pandemic.
Information for this article was contributed by Jeff Stein and Erica Werner of The Washington Post; and by Justin Sink, Alister Bull and Tony Czuczka of Bloomberg News.