White House lurches in new direction on stimulus talks, pushing for airline aid

White House lurches in new direction on stimulus talks, pushing for airline aid

The newest twist in the talks appears to be fast-tracking negotiations to aid the airline industry while shelving prospects for broader unemployment aid and other programs. But the situation seemed somewhat fluid in the wake of a late-night change of heart from Trump, where he demanded piecemeal legislation on $1,200 stimulus checks and small-business assistance, in addition to airline aid.

White House Chief of Staff Mark Meadows said the administration still held out hope for such one-off measures — even though Democrats have consistently rejected that approach — and Trump broke his coronavirus isolation Wednesday afternoon to go into the Oval Office, where a spokesman said he was being briefed on stimulus talks.

After sinking on Tuesday, the stock market rallied sharply Wednesday on the prospect of a partial deal. The Dow Jones industrial average closed up 531 points, or nearly 2 percent. Airline stocks fared even better, with American and United airlines seeing their share prices rise more than 4 percent.

The herky-jerky nature of the economic relief talks has played out over months, as the White House and Democrats have failed to agree on a broader support package. The economy showed some signs of recovery over the summer, but pockets appear to be softening again. The travel industry last week announced layoffs, and the labor market has weakened while the coronavirus pandemic remains a factor across much of the country.

Trump and Pelosi exchanged insults again on Wednesday, a sign that the broader relief talks are unlikely to be revived. But both sides did appear interested in trying to work out immediate aid for the airline industry, which has not recovered from the pandemic’s impact. Last week, American and United began furloughing more than 30,000 employees.

The White House’s approach has changed multiple times in the past few days. On Tuesday, Trump called off all talks until after the election. Mnuchin’s outreach Wednesday morning came after Republicans running for reelection questioned — and in some cases denounced — Trump’s directive to walk away.

Pelosi last week urged airlines to wait on the layoffs, saying she would renew a payroll support program either as a stand-alone bill or part of a broader deal.

Rep. Peter A. DeFazio (D-Ore.) tried Friday to advance a $28 billion bill to help airlines keep workers on payroll, under a procedure that would have required unanimous consent from all lawmakers. Republicans blocked the move, with GOP aides saying they’d had barely any time to review the bill.

Senate Republicans have pushed a package of similar size for the airlines that has less stringent requirements on how the aid will be used. It’s unclear whether Pelosi and Mnuchin could come up with a deal on airlines that both parties would support, especially after Tuesday’s bizarre events that began when Trump suddenly announced on Twitter that “I have instructed my representatives to stop negotiating until after the election.”

The backlash was swift. Seven hours after Trump said talks were terminated, he appeared to reverse himself in a new string of tweets.

At 9:54 p.m. Eastern, he called on the House and Senate to “IMMEDIATELY” approve $25 billion in new aid for the airline industry, which has already begun laying off thousands of employees after federal aid programs expired last week.

At 10:18 p.m., he called for Congress to direct $1,200 payments to millions of Americans and said he wanted immediate aid for small businesses.

“I am ready to sign right now,” he wrote. “Are you listening Nancy?”

He was referring to Pelosi, though he also tagged Meadows and other congressional leaders in the Twitter post.

White House officials and congressional leaders couldn’t explain how the process would play out from here.

All of Trump’s new directives and position changes have come via pronouncements on Twitter. He hasn’t been seen in public since returning to the White House from the hospital on Monday evening.

“It’s hard to see any clear, sane path on what he’s doing, but the fact is he saw the political downside of his statement of walking away from the negotiations,” Pelosi said Wednesday in an appearance on “The View.” “He’s rebounding from a terrible mistake he made … and the Republicans in Congress are going down the drain with him on that.”

Pelosi also questioned publicly whether the steroids Trump is taking as he battles the novel coronavirus might be affecting his cognition, a notion she’d floated privately to Democratic lawmakers on Tuesday. “Also, if you have the coronavirus it has an impact as well. So the combination is something that should be viewed,” Pelosi said on “The View.”

She said there should be “an intervention” by people around the president because “something’s wrong.”

Democrats have for months rejected the idea of passing piecemeal stimulus funding, instead insisting on one comprehensive package to aid the economy, although Pelosi has suggested that Congress could act first to help the airline industry. The president’s demands Tuesday night left out addressing the expiration of additional federal unemployment benefits for tens of millions of jobless Americans.

Meanwhile, lawmakers reacted strongly to the called-off negotiations. The Problem Solvers Caucus, a bipartisan group that proposed a $1.5 trillion stimulus package, called for a resumption in negotiations, while Rep. John Katko (R-N.Y.), a House member in a difficult reelection race, said he disagreed with the president and would “strongly urge” Trump to rethink the decision.

Sen. Lindsey O. Graham (R-S.C.), a Trump ally who is also in a tough reelection fight, wrote on Twitter on Wednesday that Trump should look at the Problem Solvers proposal. “It has many good things for individuals and businesses,” Graham wrote.

White House National Economic Council Director Larry Kudlow told CNBC on Wednesday that there was a “low probability” of approving additional legislation in time for the election but reiterated the call for passing piecemeal legislation.

“We’ve only got four weeks to the election, and we have a justice of the Supreme Court to get passed. It’s too close to the election — not enough time to get stuff done at this stage in the game,” Kudlow said. “What the president was saying is, ‘We’re too far apart for a gigantic bill.’ ”

The president has long sought an additional stimulus package ahead of the Nov. 3 election, and it remained unclear exactly why he suddenly gave up on talks, although Republicans have been skeptical all along of whether Pelosi would agree to anything that would be widely acceptable to the GOP. On a phone call with Trump on Tuesday shortly before he tweeted that talks were over, Senate Majority Leader Mitch McConnell (R-Ky.) suggested that Pelosi might be stringing him along, according to two people with knowledge of the call who spoke on the condition of anonymity to discuss it.

“It became very obvious over the last couple days that a comprehensive bill was just going to get to the point where it really did not have much Republican support at all,” Meadows said. “It was more of a Democrat-led bill, which would have been problematic more so in the Senate.”

The White House and Congress approved nearly $3 trillion in economic aid earlier this year in response to the pandemic. Some programs in those laws, such as enhanced unemployment aid, small-business aid, rental assistance, airline aid and student loan protections, have expired. House Democrats have passed two large bills to direct more aid. The first bill would have approved more than $3 trillion in new assistance, while the second bill was scaled back slightly, seeking more than $2 trillion in new aid.

The White House has sought a roughly $1.6 trillion bill. One of the biggest sticking points for the White House and congressional Democrats is how to handle the budget crises facing states and cities. Democrats want to approve a large package of assistance for these governments, while Trump has repeatedly expressed opposition.

Fed Chair Jerome H. Powell on Tuesday warned that the economy could suffer without more fiscal relief, a viewpoint Trump appeared to endorse before he began his second string of Twitter posts late in the evening.

Lori Aratani contributed to this report.

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