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House Speaker Nancy Pelosi (D-CA), Senate Democratic leader Chuck Schumer (D-NY), Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows had what both sides said was a productive meeting on Saturday after days of trading blame over expanded unemployment benefits expiring July 31. Talks are set to continue today (starting at 1 p.m.) but there is still a gulf between the two sides on longstanding issues like the size of the unemployment add-on — Republicans want to reduce the previous $600 amount — and state and local government funding, and how and when a deal comes together is unclear.

The Washington Post reported this morning that the White House is examining executive action that can be taken to address the virus and its economic effects, perhaps on unemployment benefits and preventing evictions, given partisan differences over a next bill. The President accused Democrats of politicizing additional relief and blocking a deal to extend unemployment benefits, and August 1 tweeted "Payroll Tax Cut plus Dollars!" returning to an issue that the Administration previously said was dropped from the discussions. Conservative groups are reportedly launching an ad buy on the issue and Stephen Moore, a Heritage Foundation economist and previous Trump adviser, urged the President in a Wall Street Journal (WSJ) op-ed to "declare a national economic emergency and announce that the Internal Revenue Service will immediately stop collecting the payroll tax."

Secretary Mnuchin and Chief of Staff Meadows will head back to the Capitol today, and the Senate returns to session with a potential vote tomorrow on extending unemployment benefits. On ABC's "This Week" yesterday, Secretary Mnuchin expressed the same concerns the Administration has had for months:

• the now-expired $600 add-on resulted in some workers being overpaid and should be reduced;
• the $875 billion+ in state and local government funding sought by Democrats could be used by states to address financial issues that predate the virus; and
• too large a relief bill will swell the federal budget deficit.

"We have to balance. There's obviously a need to support workers and support the economy. People through no fault of their own are shut down because of this terrible disease," he said. "On the other hand, we have to be careful about not piling on enormous amount of debts for future generations." The White House did establish some distance from the liability protections in the Senate GOP proposal, with press secretary Kayleigh McEnany saying Friday, "That's a question for Mitch McConnell … that's his priority."

Also on ABC, Speaker Pelosi suggested that going forward the add-on could relate to the rate of unemployment — as that goes down then you can consider something less than the $600 — "but in this agreement it's $600." In terms of whether a deal is within reach, she said, "It will be close to an agreement when we have an agreement."

Meadows said on CBS's "Face the Nation," "We still have a long ways to go … I'm not optimistic that there will be a solution in the very near term."

The Senate's August recess is scheduled to begin at the end of the week. The House is out, with their recess already scheduled to begin, and members will receive 24 hours' notice prior to a vote related to coronavirus legislation. The relief bill talks make the August schedule uncertain.

Health care — A story in today's Washington Post discusses the fact that a health care proposal promised by President Trump in recent weeks, perhaps as a replacement for the Affordable Care Act (ACA), has yet to be unveiled.

Election — President Trump tweeted about a WSJ editorial over the weekend on presumptive Democratic presidential nominee Joe Biden's tax increase proposals topping $3 trillion/10 years, saying, "Actually, it will be much more than that, and much of it on nonsense. Markets and your 401k's will CRASH. Jobs will disappear!" The WSJ editorial said of Biden, "He claims his tax proposals will soak only the affluent, but they won't raise nearly enough money to finance all of his plans. In the end everyone will pay."

A Washington Post story over the weekend discussed Biden's more robust plans on climate change along the lines of those pushed by more progressive candidates, which were demonstrated in a July 14 $2 trillion plan to "create millions of high-quality, union jobs by building a modern infrastructure and a clean energy future" that targets eliminating carbon emissions from power plants within 15 years. The article noted that Biden "has framed his climate plan as a jobs program" and discussed a campaign task force on the issue that included former Senator John Kerry and Rep. Alexandria Ocasio-Cortez (D-NY) and members of the House Select Committee on the Climate Crisis, with some overlaps in the groups' recommendations.

Speculation continues regarding Biden's imminent running mate selection, with some stories over the weekend discussing Rep. Karen Bass (D-CA) among other previously discussed candidates.

The global EY Tax COVID-19 Response Tracker is updated through July 31.

On Friday, August 7 (at 12:00 p.m. ET) is the EY Webcast, "Tax in the time of COVID-19." Events like the spread of the coronavirus (COVID-19) and the resulting economic crisis have made managing tax positions and tax functions much more difficult. To get the information your company needs to know now, join our panelists for a conversation about operating the tax function in these difficult times. Registration information is forthcoming.

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