House Speaker Nancy Pelosi said the administration’s latest offer includes no national plan for testing, contact tracing and treatment of the coronavirus.
Photo: Stefani Reynolds/Bloomberg NewsWASHINGTON—The latest, beefed-up White House offer on a new coronavirus package hit resistance from both Democrats and Republicans over the weekend, deflating hopes that a bipartisan agreement was imminent.
Democrats criticized the nearly $1.9 trillion offer from Treasury Secretary Steven Mnuchin as insufficient, particularly in its funding and strategy for coronavirus testing and tracing. Senate Republicans, meanwhile, balked at the offer’s cost and its proposed expansion of the Affordable Care Act. The concerns from both sides of the Capitol lowered expectations that had risen Friday when President Trump approved the most generous GOP offer to date in the negotiations.
In a letter to House Democrats on Sunday, House Speaker Nancy Pelosi (D., Calif.) said the new administration offer provided inadequate funding and no national plan for testing, contact tracing and treatment of the coronavirus.
“This past week, the president demonstrated very clearly that he has not taken the war against the virus seriously, personally or nationally. This attitude is reflected in the grossly inadequate response we finally received from the administration on Saturday,” Mrs. Pelosi wrote. “Until these serious issues are resolved, we remain at an impasse.”
House Democrats have pushed for $75 billion and a national plan for testing, tracing and treatment of the virus. Mrs. Pelosi said in her letter that the White House plan included about $45 billion in new funding, lacked a national plan for testing and tracing and didn’t address the virus’s disproportionate impact on minority communities.
President Trump in brief comments on the issue said Republicans were still eager to reach an agreement.
“Republicans want to do it. We’re having a hard time with Nancy Pelosi,” he said Sunday on Fox News.
While the White House has characterized the offer as around $1.8 trillion, a person familiar with the proposal said it included $1.88 trillion in spending, with about $400 billion of the funds reallocated from unspent money from earlier relief legislation, bringing the total cost to about $1.5 trillion.
Mr. Trump faces resistance from some Republicans wary of approving more federal aid after Congress authorized around $3 trillion in coronavirus relief since March.
During a conference call Saturday morning with White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin, several Senate Republicans said they were opposed to passing another large aid package, according to people familiar with the call. Mr. Meadows said he would bring their concerns back to President Trump, suggesting he expected a less than warm reception by joking that as a result the lawmakers would have to attend his funeral, according to the people.
In a letter to members of Congress on Sunday, Messrs. Mnuchin and Meadows urged lawmakers to pass legislation helping small businesses while they continue to negotiate with Mrs. Pelosi. Democrats have generally resisted tackling individual bills, saying they want to hold out for a broad package.
“We will continue to work with Speaker Pelosi and Senator Schumer,” Messrs. Mnuchin and Meadows wrote. “The all-or-nothing approach is an unacceptable response to the American people.”
The latest White House proposal capped a tumultuous week, in which Mr. Trump ended negotiations, before reversing himself. The nearly $1.9 trillion offer comes closer to the $2.2 trillion plan that House Democrats approved earlier this month, though major differences between the Democrats and the White House remain.
The two sides have edged closer on one contentious issue: funding for state and local governments, which Republicans have characterized as a bailout for Democratic-led states. The most recent White House offer included $300 billion in funding for state and local government, up from $250 billion in their last proposal. Democrats, who had initially pushed for more than $900 billion, included $436 billion in their last bill.
The latest White House proposal would also partially restore $400 in weekly federal unemployment benefits, which expired in late July, through Jan. 21, 2021, according to someone familiar with the proposal. In their last bill, Democrats proposed resuming the $600 weekly sum through January 2021.
GOP lawmakers told Trump administration officials on Saturday that they should be negotiating from a less-expensive bill that Senate Republicans rallied around last month, according to the people familiar with the call, saying such a large package was unnecessary.
One major source of concern among Senate Republicans is the White House proposal’s provision to expand the Affordable Care Act’s subsidies for people who have lost jobs, and with them their employer-sponsored health care, during the pandemic.
Many Republicans oppose an expansion of the ACA, which they have criticized and sought to repeal for years. Many Republicans also view its restrictions on abortion funding as insufficient and see expanding the subsidies as compounding that problem. They conveyed to Mr. Mnuchin that such a provision was unacceptable, according to GOP aides.
During the call, Sen. John Barrasso (R., Wyo.) said a proposed expansion to eligibility for Affordable Care Act subsidies would represent an “enormous betrayal,” according to the people.
Democrats said Republicans were simply opposing an expansion of the ACA and noted that the health law already bars the use of federal funds made available to consumers through subsidies and tax credits for most abortions, with some exceptions for rape, incest and when the life of a pregnant woman is in danger. Health plans on exchanges may cover other abortions, but they have to set aside separate funding so it doesn’t come from federal subsidies.
Republicans are also opposed to an effort to broaden eligibility for a second round of $1,200 stimulus payments. The first round of direct checks required recipients to have Social Security numbers to be eligible and excluded some American citizens who are married to or are children of immigrants who are working in the U.S. illegally, but paying U.S. income taxes.
Absent another relief deal, economists say, temporary layoffs will become permanent and more businesses will close, features of a typical recession rather than the temporary shock and quick rebound policy makers hoped for earlier this year.
The risks that Congress provides too little support to the economy are greater than the risks of providing too much, Federal Reserve Chairman Jerome Powell said last week. The former could lead to a longer, weaker recovery, he said.
Write to Kristina Peterson at kristina.peterson@wsj.com and Andrew Duehren at andrew.duehren@wsj.com
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October 12, 2020 at 04:17AM
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