Happy Wednesday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Pelosi, Mnuchin talk but make no progress on ending stalemate: House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin spoke by phone Wednesday but appeared to make no progress toward breaking the impasse on a fifth coronavirus relief package.
- The call — initiated by Mnuchin, according to a source familiar with the conversation — is the first time they’ve spoken since talks collapsed last Friday.
- But instead of indicating movement toward a detente on Wednesday, both sides underscored how entrenched the negotiations are and blamed each other for the stalemate.
Pelosi and Senate Minority Leader Charles Schumer (D-N.Y.) released a joint statement saying that Mnuchin had made an “overture” to meet, but also made clear that the White House wasn’t moving on either the price tag of the legislation or what should be in it.
Mnuchin quickly fired back that the description offered by the Democratic leaders was “not an accurate reflection” of his conversation with Pelosi.
The Hill’s Jordain Carney brings us up to speed here.
The latest:
- Democrats had offered to reduce their $3.4 trillion price tag by $1 trillion if GOP negotiators agreed to increase their roughly $1 trillion package by the same amount, but the offer was rejected.
- The two sides are also far apart on issues like unemployment insurance, Senate Majority Leader Mitch McConnell’s (R-Ky.) red line of liability protections, and more money for state and local governments – a top priority for Democrats.
LEADING THE DAY
Trump grabs ‘third rail’ of politics with payroll tax pause: President Trump’s pledge to “terminate” the payroll tax that funds Social Security defies the conventional wisdom of staying away from what’s known as the “third rail” of politics.
Proposing a major reform to Social Security shortly before an election traditionally has been seen as the political equivalent of touching the highly electrified rail that powers subway cars.
- The last president to try, George W. Bush, made a similar move shortly after winning a convincing reelection in 2004, and was stopped dead in his tracks.
- Bush’s ill-fated effort to reform Social Security energized dispirited Democrats and sapped political momentum from the start of his second term.
Yet the danger of overhauling the funding stream for a program that in turn provides payments to seniors has not deterred Trump from risking support in key battleground states like Florida.
The Hill’s Alexander Bolton walks us through the risks Trump is taking here.
Trump pitches fair housing repeal to ‘suburban housewife’ with racist tropes: President Trump on Wednesday claimed that his decision to scrap an Obama-era rule meant to quash racial discrimination would win the support of suburban women afraid of living near low-income housing projects, channeling decades of racist attacks on such developments.
- Trump claimed in a tweet that the “suburban housewife” would vote for him out of fears that “low income housing would invade their neighborhood” under Joe Biden, the presumptive Democratic presidential nominee.
- Trump also attacked the former vice president’s promise to revive the revoked rule, known as the Affirmatively Furthering Fair Housing (AFFH) rule, and claimed for no clear reason that Biden would put Sen. Cory Booker (D-N.J.) in charge of its enforcement.
“The ‘suburban housewife’ will be voting for me. They want safety & are thrilled that I ended the long running program where low income housing would invade their neighborhood. Biden would reinstall it, in a bigger form, with Corey Booker in charge!” Trump tweeted, also tagging the accounts of the Fox News show “Fox & Friends” and Fox Business Network anchor Maria Bartiromo.
The background: Trump’s tweet is his latest attempt to draw from decades of racist opposition to housing desegregation efforts and low-income housing projects into support for his reelection bid. Trump’s argument is also out of step with his administration’s justification for repealing the AFFH rule in July.
- That rule, issued by the Department of Housing and Urban Development (HUD) in 2015, required local governments to prove that federal subsidies for housing projects would not go to developments with discriminatory zoning laws or regulations.
- HUD replaced the AFFH rule last month with a measure meant to give local governments more flexibility and credence.
- But while HUD said the decision was meant to protect the autonomy of local governments to stamp out racial discrimination, Trump has pitched it as a way to keep low-income Americans out of wealthy neighborhoods where he baselessly claims they would commit crimes.
Federal deficit at $2.8T breaks annual record with 2 months to spare: The federal deficit hit $2.8 trillion for the first 10 months of fiscal 2020, breaking the previous annual record, according to figures released Wednesday by the Treasury Department.
The spike in the deficit, which is already double the largest full-year deficit on record, largely stems from the COVID-19 pandemic. The recession and lower tax revenues, combined with substantial government spending to battle the effects of the coronavirus, have created a massive hole in the federal budget for fiscal 2020, which ends on Sept. 30.
The Hill’s Niv Elis breaks it down here.
GOOD TO KNOW
- The S&P 500 on Wednesday nearly surpassed its record, closing at 3,380.
- A top Federal Reserve official said Wednesday that the inability of the U.S. to control the coronavirus pandemic limited the benefit of trillions in fiscal stimulus approved by President Trump and Congress earlier this year.
- The price of food fell a seasonally-adjusted 0.4 percent in July, the first monthly drop in food prices since last April, according to the Commerce Department.
- Robert Smith, CEO of Vista Equity Partners, said companies that profited from the slave trade should consider paying reparations to Black Americans, citing the coronavirus pandemic’s disproportionate impact on the community.
- The U.S. Chamber of Commerce on Wednesday asked the Treasury Department to answer “significant questions” raised by President Trump’s executive order allowing a deferral of payroll taxes.