Pelosi: Mnuchin says Trump will lobby McConnell on big COVID-19 deal

Treasury Secretary Steven Mnuchin suggested Thursday that President Trump will press Senate Republicans to accept a massive coronavirus relief package if a deal with Democrats emerges, according to the office of Speaker Nancy Pelosi (D-Calif.).

Trump in recent days has urged Congress to “go big” as lawmakers weigh another round of emergency stimulus, indicating Thursday that he’s told Mnuchin to seek more funding than the $1.8 trillion proposal offered by the White House last week.

Yet Senate Majority Leader Mitch McConnell (R-Ky.) has rejected such a high figure, citing opposition from a long list of conservatives in his conference. McConnell is expected to stage a vote next week on a much smaller package, in the range of $500 billion. 

On a call with Mnuchin on Thursday afternoon, Pelosi raised concerns about McConnell being a roadblock to a larger aid package, even if Democrats and the White House can seal an agreement. The Treasury secretary, according to Pelosi spokesman Drew Hammill, assured her Trump would intervene to lobby the majority leader on behalf of the legislation.

“The Speaker also raised Leader McConnell’s comments today about not being willing to put a comprehensive package on the Senate floor. The Secretary indicated that the President would weigh in with Leader McConnell should an agreement be reached,” Hammill tweeted.

The Speaker also raised Leader McConnell’s comments today about not being willing to put a comprehensive package on the Senate floor. The Secretary indicated that the President would weigh in with Leader McConnell should an agreement be reached. (3/4)

— Drew Hammill (@Drew_Hammill) October 15, 2020

Trump’s impact on the fate of a still-elusive deal remains to be seen.

Republicans on Capitol Hill have, throughout Trump’s tenure, mobilized behind their Oval Office ally on a host of legislation, both mundane and controversial. Yet with Trump trailing in the polls — and McConnell fighting to save vulnerable GOP senators and keep his majority — cracks in the facade have begun to emerge. 

McConnell on Thursday said in no uncertain terms that he won’t call a vote on a stimulus bill anywhere near the size Pelosi and Mnuchin are discussing.   

“That’s where the administration is willing to go,” McConnell told local reporters in Kentucky. “My members think half a trillion dollars, highly targeted, is the best way to go.”

The GOP divisions arrive as Pelosi and Mnuchin continue to seek a bipartisan coronavirus deal before the Nov. 3 elections.

For almost a week, the sides have remained roughly $400 billion apart, with Pelosi sticking to the Democrats’ $2.2 trillion proposal, passed by the House earlier in the month, and Mnuchin offering $1.8 trillion last week. The sides have also disagreed on specific legislative language dictating how the funding will be allocated.

But on Thursday, the pair made some headway: Mnuchin said he had largely agreed to Pelosi’s demand for a national testing strategy, featuring $75 billion for testing and tracing, as well as specific language on that topic — “subject to some minor issues.”

“I think, quite frankly, we won’t need to spend all that money, but we’re happy to take the money,” he said in an interview with CNBC.

Hammill said the White House will deliver that offer formally on Friday. 

“The Secretary stated he would accept Democrats’ language for a national strategic testing plan with “minor” edits & that language would be shared tomorrow,” he said. “The Speaker looks forward to reviewing.”

The Speaker and Secretary Mnuchin spoke at 3:30 p.m. today for 1 hr, 22 mins. The Secretary stated he would accept Democrats’ language for a national strategic testing plan with “minor” edits & that language would be shared tomorrow. The Speaker looks forward to reviewing. (1/4)

— Drew Hammill (@Drew_Hammill) October 15, 2020

Yet there’s been no indication that the sides have come closer on what is perhaps the greatest barrier to a deal: funding for state and local governments. Mnuchin has offered $300 billion in that area — an “extraordinary compromise”, he said Wednesday — but the figure falls well short of the $436 billion Pelosi has proposed.

Another sticking point relates to a corporate tax break, included in the CARES Act, that allows companies to apply losses over the past three years to taxes they paid in the five years previous — a benefit estimated to approach $150 billion. Pelosi and the Democrats are seeking to eliminate that provision in the current negotiations and shift funding into a separate tax benefit for low income families — a move Republicans are resisting.  

“They’re losing their jobs through no fault of their own. They’re parents,” Pelosi said Wednesday night in an interview with MSNBC’s Lawrence O’Donnell. “But no, [Republicans] insist on having their net operating loss tax break for the wealthiest, while they give zero to an Earned Income Tax Credit.”

Earlier in the day, Trump had urged Congress once more to arrive at a compromise, saying he’s ready to go higher than either side has proposed.

“Absolutely, I would. I would pay more. I would go higher. Go big or go home, I said it yesterday. Go big or go home,” Trump said during a phone interview on Fox Business Thursday morning. 

Trump also seemed to criticize Mnuchin, saying the Treasury secretary — who had led successful negotiations on four rounds of emergency relief earlier in the year — simply “hasn’t come home with the bacon” this time around. 

GOP leaders on Capitol Hill, meanwhile, say it’s Pelosi who’s blocking an agreement, accusing the Speaker of running out the clock to prevent Trump from claiming a victory before the election.

“There is one stumbling block to any deal getting through, it doesn’t matter the size. The Speaker of the House is the only one that’s denying it,” House Minority Leader Kevin McCarthy (R-Calif.) told reporters Thursday. 

It’s unclear when Pelosi and Mnuchin will speak next, but the sides will continue to trade proposals on Friday.

“Staff will be exchanging language on several areas which the Speaker and the committees of jurisdiction will review,” Hammill said.