The Trump administration makes a $1.8 trillion stimulus offer to Democrats, which includes $400 federal unemployment benefits and $1,200 direct payments

President Donald Trump Tasos Katopodis/Getty Images
  • The Trump administration made a $US1.8 trillion stimulus offer to Democrats, but they spurned it and said it didn’t do enough to tackle the ongoing coronavirus pandemic.
  • It contains $US1,200 direct payments, $US400 weekly federal unemployment benefits, and significant aid to states.
  • The White House’s renewed push for federal aid ahead of the election is a stark reversal from three days ago when Trump pulled the plug on negotiations.
  • Visit Business Insider’s homepage for more stories.

The Trump administration made a $US1.8 trillion stimulus offer to Democrats on Friday, the largest one yet in fluid negotiations with Speaker Nancy Pelosi. But she rebuffed it by saying it didn’t provide a fuller strategy for COVID-19 testing and tracing.

The White House is renewing an aggressive push to pass a government rescue package before the election, only three days after the president ended talks and sparked criticism from some Republicans — a stark reversal in a turbulent stretch of on-again, off-again negotiations.

Democrats, however, did not accept the administration’s offer, which was an increase from $US1.6 trillion they had rejected as too paltry.

“Of special concern, is the absence of an agreement on a strategic plan to crush the virus,” Pelosi spokesman Drew Hammill wrote on Twitter after Pelosi spoke with Treasury Secretary Steven Mnuchin on Friday.

Pelosi threw more cold water onto the White House plan on Saturday. In a letter to her caucus, she called the plan “insufficient” and said it amounted to “one step forward, two steps back.” She added Democrats continue pushing for more funding and details from the administration.

“When the President talks about wanting a bigger relief package, his proposal appears to mean that he wants more money at his discretion to grant or withhold,” Pelosi said.

Trump favours a broad economic aid package. He suggested during a radio interview earlier on Friday he could support a stimulus plan bigger than the $US2.2 trillion amount Democrats are seeking. He also wrote on Twitter that the aid package should “Go Big”.^tfw

The package contains numerous measures to provide more government assistance to individuals and businesses, per The Washington Post, citing two people familiar with the plan.

The plan repurposed nearly $US400 billion in unspent relief funds from the spring to offset part of the price tag, bringing overall new spending to $US1.5 trillion.

Some of the provisions include:

  • $US1,200 direct payments to adults plus $US1,000 for each dependent child.
  • $US400 weekly federal unemployment benefits (end date unclear).
  • $US300 billion in aid to state and local governments.
  • $US75 billion for coronavirus testing and tracing.

The proposal increases the amount of aid to states by $US50 billion. The stimulus check provision also bumps the amount for children to $US1,000 instead of the $US500 provided under the CARES Act in March.

The offer caps a volatile week in stimulus negotiations. Talks between Mnuchin and Pelosi veered in recent days from considering a standalone rescue bill for airlines to attempting to cut a deal on a big government rescue package.

But Trump’s demands for a larger package collide with the economic disposition of many Republicans. Many GOP senators opposed a $US1 trillion spending plan that Senate Majority Leader Mitch McConnell and other Republicans introduced earlier this summer, citing concern over the growing federal debt.

There was similar GOP opposition to a “skinny” stimulus plan, which Democrats criticised as inadequate and ultimately blocked last month.

“I’ve got a significant percentage of my members who think we’ve done enough and who are alarmed by the amount of national debt,” McConnell said at a campaign event in Kentucky Thursday. He was cool on the prospect of passing a stimulus package before the election on Friday, given the ongoing Supreme Court nomination process of Judge Amy Coney Barrett.

Meanwhile, Pelosi said on MSNBC that Trump’s about-face was prompted by stocks sliding earlier in the week.

“He got a terrible backlash from it, including in the stock market, which is what he cares about,” she said on Friday. “And so then he started to come back little by little, and now a bigger package.”

Experts say sectors of the economy are slowing down. Nearly a dozen major companies are moving ahead with at least 75,000 layoffs if the federal government doesn’t provide further relief. Unemployment claims have regularly topped 800,000 for almost every week since early August, far above pre-pandemic levels.

In addition, the latest jobs report showed the economy regained 661,000 jobs, a sharp drop compared to the past three months. The US still hasn’t recovered half the jobs it lost in March and April.

Lawmakers authorised nearly $US3 trillion in federal spending as the pandemic crashed into the economy, causing a colossal amount of job losses and small business failures.

Many economists across the political spectrum are urging Congress to approve more government spending to battle the pandemic and keep individuals and businesses afloat.

“I’m always concerned about the level of debt, but on this one, I’ll say we’re at war with this virus,” Bill Hoagland, a senior vice president at the Bipartisan Policy Centre and former Republican staff director for the Senate Budget Committee, told Business Insider. “With low interest rates, you fight this with all the resources you have.”

A new analysis released Friday from the Brookings Institution indicated a $US2 trillion stimulus package would restore the nation’s economic activity to pre-pandemic levels by the middle of next year.