Report: As Jobs Report Looms, Trump and Congress Remain Split Over Stimulus Plan – News

As Jobs Report Looms, Trump and Congress Remain Split Over Stimulus Plan

WASHINGTON — Top Democrats and President Trump clashed anew on Thursday over an economic recovery package as a jobs report loomed over stalled negotiations on the plan, raising the stakes of an agreement even as a compromise appeared to be nowhere in sight.

Grasping for leverage, Mr. Trump threatened to act on his own if no bipartisan deal could be reached, telling reporters that he could move as soon as Friday or Saturday to sign executive orders to forestall evictions, suspend payroll tax collection and provide unemployment aid and student loan relief. But it was not clear that he had the power to do so without Congress, which controls spending, or that any set of executive actions could stabilize an economy devastated by the pandemic.

Top Democrats insisted that they would be able to settle significant policy divisions with the administration, even as they conceded that they were not close to such a resolution.

Entering a meeting this week in the office of Speaker Nancy Pelosi, Mark Meadows, the White House chief of staff, said that the Republican proposal was now “north of where our initial offer was” — meaning, above the $1 trillion plan they introduced last week Progress now “depends more on the Democrats and their willingness to either make a deal and show that they’re willing to compromise,” he added.

But Democrats, who are pressing a $3.4 trillion package, assailed the Republicans, saying their offers had not come close to meeting the needs of Americans struggling through historic economic and public health crises.

In an interview with CNBC on Thursday, the normally genteel Ms. Pelosi said of Republicans, “Perhaps you mistook them for somebody who gives a damn.”

“Why are we holding America’s working families who are struggling, who have children to care for, senior elders to care for and the rest, and make it as if they’re — my goodness — they’re not worthy of this?” she told reporters later at the Capitol.

With no agreement at hand, lawmakers in both chambers have now left Washington, with the promise of 24 hours’ notice before any vote on a recovery package, which negotiators had hoped to reach before the end of the week.

Lobbyists and some congressional staff increasingly fear the developments are raising the possibility that lawmakers will be unable to bridge the yawning policy divide on a new economic stimulus bill. Some expressed worries on Thursday that Democrats would abandon negotiations if Mr. Trump chose to follow through with his threatened orders, some of which Democrats have called illegal and which they could challenge in court.

But a White House official said lawyers there believed the president would be on solid ground to act on his own to repurpose funding provided in the last stimulus measure.

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On his way to board Air Force One for a flight to Ohio on Thursday, the president told reporters that he expected to sign the orders “probably tomorrow afternoon” or Saturday morning, though he left open the possibility of a bipartisan deal instead.

A breakdown in negotiations, even one that ends with Mr. Trump taking unilateral action, could particularly hurt small businesses — which have largely run through the aid lawmakers approved for them this year, with a loan program to assist them slated to lapse at week’s end — and state and local government workers, who could face mass layoffs as budget shortfalls widen.

Looming over the talks on Thursday was the anticipation of a new monthly jobs report that could influence the trajectory of negotiations.

The Labor Department will report Friday morning on how many jobs the economy created in July, as the United States climbs back from the depths of the pandemic recession. Forecasters expect a slowdown from May, when the nascent recovery added 2.7 million jobs, and June, when it added 4.8 million. That is because the resurgence of the coronavirus has cooled off growth in consumer spending and business activity for much of the summer.

If Friday’s report shows a drastic slowdown in job creation, while the economy remains down more than 10 million jobs from its prepandemic peak in February, pressure will rise on Mr. Trump and congressional leaders to cut a deal to provide additional aid for struggling small businesses, laid-off workers and state and local governments that are facing large shortfalls in tax revenue.

“We have to move quickly — more quickly — because that light at the end of the tunnel might be the freight train of the virus coming at us if we do not act to contain it,” Ms. Pelosi said, speaking before the meeting with Senator Chuck Schumer, Democrat of New York and the minority leader, Steven Mnuchin, the Treasury secretary, and Mr. Meadows.

Republicans, for their part, blamed Democrats for what they described as an unwillingness to compromise on a number of critical fronts, like agreeing to liability protections for businesses or accepting a lower level of funding for schools that are already starting the academic year. They remained bitterly opposed to Democrats’ demands for hundreds of billions of dollars for food aid, election security and the Postal Service.

“A lot of Americans’ hopes — a lot of American lives — are riding on the Democrats’ endless talk,” said Senator Mitch McConnell, Republican of Kentucky and the majority leader, vowing to remain in Washington in anticipation of an agreement. “I hope they are not disappointed.”

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It is all but guaranteed that a popular small-business loan program will stop accepting applications at the end of the week, becoming yet another casualty of the faltering negotiations. And it appeared likely that the talks would stretch into next week. Mr. Meadows said he would host a daily conference call next week with Republican senators to keep them updated on the progress — or lack thereof — of negotiations.

“I was hoping that maybe you wouldn’t have that call after Friday because we’d have a deal,” Senator Roy Blunt, Republican of Missouri, told reporters. “I do think at some point, everybody has to make a decision either we’re going to do this or not, and if we’re not, we’re not.”

The persisting impasse has prompted the president and his lieutenants to double down on the threat of unilateral executive action, including addressing a lapsed federal unemployment benefit and Mr. Trump’s demands for a payroll tax cut. (At least one Republican senator, Charles E. Grassley, the chairman of the Finance Committee, expressed skepticism about whether a payroll tax cut was warranted with millions of Americans unemployed.)

Democrats could challenge some of those, though Ms. Pelosi said on Thursday that she would welcome an eviction moratorium order, provided that there was additional rental and housing assistance attached. She and Mr. Schumer had previously rejected a proposal that would extend the moratorium through the end of the year because it did not come with such aid.

“What’s the use of a moratorium if you’re going to have eight months of rent to pay at the end of moratorium?” Ms. Pelosi said. “And what does that mean to the landlord? No money.”

But a better-than-expected jobs number on Friday could sway Mr. Trump — who has repeatedly said that the rebound from the recession is well underway, and that the economy will rapidly return to its precrisis state — against agreeing to any more of Democrats’ demands on issues like reviving the now-expired $600-per-week federal supplement for unemployed workers. Both Ms. Pelosi and Mr. Schumer have repeatedly rejected any Republican proposals that would curtail that benefit in favor of a new, likely more complex system or an overall lower weekly sum.

It could also embolden the faction of the Senate Republican caucus that is pushing for no additional federal deficit spending. But some analysts in Washington say even a particularly brutal jobs report could complicate negotiations, because Republicans may cite it as a sign that the additional unemployment benefits that had been in place through the end of July were so generous that they deterred laid-off Americans from returning to work.

A string of recent studies have found the opposite: that the additional income from the benefits has propped up consumer spending and bolstered the economy, without discouraging workers from taking jobs if offered.

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Analysts have raised warnings about a possible letdown in the jobs report this week, particularly after a sharp drop in the private-sector job growth that the private payrolls firm ADP reported on Wednesday.

“We believe the labor market reached an inflection point in July,” economists at Nomura wrote this week in a research note in which they forecast a gain of 550,000 jobs in July, “starting what will likely be a slower phase of recovery.”

Mr. Trump, speaking to Fox News on Thursday, predicted a “big number” from Friday’s report. Presidents have the ability to see jobs numbers a day ahead of their release, but an administration official said Mr. Trump had not seen the report before making his remarks.

Annie Karni contributed reporting.

The post As Jobs Report Looms, Trump and Congress Remain Split Over Stimulus Plan appeared first on New York Times.

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