US Democrats and the White House were no closer to agreeing on a new emergency pandemic spending package Wednesday as Treasury Secretary Steven Mnuchin traded blame with House Speaker Nancy Pelosi over failed negotiations.
President Donald Trump's administration and Democratic leadership have for weeks been discussing a new round of emergency aid to workers and businesses hit hard by the coronavirus crisis, but have been unable to agree on how much to spend.
Mnuchin said he spoke with Pelosi by phone but that she was unwilling to budge unless the White House agreed to spend at least $2 trillion as part of the new measure -- a figure rejected by Republicans.
"The Democrats have no interest in negotiating," he said. Earlier in the day, Mnuchin told Fox Business Network that "Democrats are very focused on politics," and may be avoiding a deal in order to hurt Trump.
In a joint statement, Pelosi and top Senate Democrat Chuck Schumer accused the White House of intransigence and refusing to budge from their proposal to spend only $1 trillion on the new measure.
"Democrats have compromised," they said.
"Repeatedly, we have made clear to the administration that we are willing to come down $1 trillion if they will come up $1 trillion. However, it is clear that the administration still does not grasp the magnitude of the problems that American families are facing."
Mnuchin says that a deal is possible if Democrats will agree on a new bill costing less than $3 trillion, the amount proposed by the Democratic-controlled House of Representatives in May.
"Our view is let's spend a little over a trillion dollars on areas of the economy that are going to be very impactful now that we can agree on," he said. "We don't need to do everything at once."
- Unemployment benefits -
As a stopgap measure Trump signed four executive orders over the weekend, including one to provide $400 a week in additional unemployment benefits to jobless workers.
That's less than the $600 approved in the $2.2 trillion CARES Act rescue package passed in March, but White House economic advisor Larry Kudlow said it would put the economy back on track.
"The executive orders provide considerable assistance and economic growth incentive. So we can stay with that as we are entering what I think is a self-sustaining economic recovery," Kudlow said on Fox Business Network.
Trump has also floated a capital gains tax cut, which would mostly benefit wealthy investors who trade stocks. Mnuchin said it would help spur investment and an economic recovery, but Schumer slammed the proposal.
"President Donald Trump and Senate Republicans say a tax cut for wealthy investors will help fight the COVID economic crisis, but think $600/week is too much for 30 million unemployed Americans," Schumer said on Twitter.
- State aid controversial -
Mnuchin continues to oppose the Democrats' demand to provide aid to state and local governments which lost massive amounts of revenue when businesses shut down nationwide.
He said plenty of money remains from the previous bill which would allow states to chip in $100 of the $400 weekly jobless benefit.
However, Treasury's own data through July 23 shows that major cities and populous states have used much of the funding: California has spent 75 percent, while Detroit used over 90 percent and New York city nearly 100 percent.
Economists note that pandemic funding pressures mean many state and local governments may be forced to lay off teachers, police and firefighters.
Separately, Treasury on Wednesday reported a 224 percent surge in the deficit to $2.8 trillion as of the end of July, compared to $867 billion in the same month last year.