Democrats in the US House of Representatives have started drafting a stimulus proposal of about US$2.4 trillion that they can take into possible negotiations with the White House and Republican-controlled US Senate, Democratic officials said.
The Democratic plan would also address demands from swing-state lawmakers in the party for the passage of a COVID-19 pandemic-relief plan before they adjourn for their re-election campaigns — even if it does not result in a deal that gets signed into law.
The bill could get passed by the House next week. While smaller than the US$3.4 trillion package the House passed in May, it remains much larger than what the US Senate has said it could accept.
Photo: AFP
US President Donald Trump has indicated that he would be willing to go as high as US$1.5 trillion.
“When you are talking about US$2.2 trillion and US$1.5 trillion you are in deal-making territory” said US Representative Dan Kildee, a Democrat.
US House of Representatives Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer had earlier pressed the White House for a US$2.2 trillion package.
As the top-line figure remains well above what the Trump administration has favored, the House bill might do little on its own to resolve the impasse in talks that has persisted since last month.
Republicans in the US Senate proved unable to coalesce around an earlier US$1 trillion proposal and instead backed a US$650 billion plan that ended up getting blocked by Democrats as insufficient.
The bill adds to the previous US$2.2 trillion Pelosi-Schumer plan, including help for the US airline industry to avert massive job losses, which could start on Thursday when restrictions expire from a prior round of federal assistance. Also included is aid for small businesses and a bailout for restaurants.
Pelosi and US Secretary of the Treasury Steven Mnuchin each raised the prospect of resuming negotiations on a stimulus package on Thursday, without giving any indication that they had moved closer to a compromise.
Mnuchin said during a US Senate Banking Committee hearing that a targeted pandemic relief package was “still needed.”
“If the Democrats are willing to sit down, I’m willing to sit down anytime for bipartisan legislation. Let’s pass something quickly,” Mnuchin said.
Pelosi on Wednesday told reporters that she was not sure when she and Mnuchin would next talk.
“We are ready for a negotiation,” she said. “I am talking with my caucus and my leadership, and we will see what we are going to do.”
The prospect of talks helped push shares higher, but that optimism was tempered by reports showing a resurgence in COVID-19 cases in Europe and investors pulled shares back off their session highs.
Lawmakers on both sides remained skeptical a deal could be done before the Nov. 3 presidential election.
US Representative Kevin Brady, the top Republican on the Tax Writing Committee, said the effort to draft a Democratic-only bill was not a good sign.
“It’s a waste of time,” Brady said. “She [Pelosi] could draft 10 more partisan bills — it doesn’t get us an inch closer.”
US Senate Committee on Appropriations Chairman Richard Shelby, a Republican, said: “There’s always a chance around here, as you know, but it is slim.”
“I don’t think we are going to get it done before whatever break we have before the elections,” said US Senator Ben Cardin, a Democrat.
The Republicans are “underestimating” the danger to the US economy and are unlikely to accept a significant stimulus, he said.
The risk of a slowdown in the economic recovery is rising with the lack of movement on fiscal stimulus. Initial claims for unemployment insurance remained at a level above the peak during the Great Recession of 2007 to 2009, the latest weekly data showed.
US Federal Reserve Chairman Jerome Powell told the US Senate Banking Committee hearing that “it’s likely that additional fiscal support will be needed.”
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