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House Speaker Nancy Pelosi (D-CA) and Senate Democratic leader Chuck Schumer (D-NY) traded dueling press releases with Treasury Secretary Steven Mnuchin on coronavirus relief legislation yesterday (August 12), accusing each other of standing in the way of a $1 trillion GOP deal or $2 trillion Democratic deal. During a news conference, President Trump cast doubt on a deal with Democrats, saying, "the bill is not going to happen because they don't even want to talk about it because we can't give them the kind of ridiculous things that they want."

A joint statement from the Democratic leaders said, "an overture was made by Secretary Mnuchin to meet" but it's clear "the White House is not budging from their position concerning the size and scope of a legislative package." Secretary Mnuchin, who in an earlier Fox Business appearance called for a deal on overlapping priorities at a price tag of just over $1 trillion, later issued a statement refuting the Democrats' characterization and saying they are unwilling to meet unless $2 trillion is agreed to in advance. The House-passed HEROES Act topped $3 trillion and Democratic leaders offered to drop to $2 trillion achieved by shortening the duration of programs.

Secretary Mnuchin said Democrats have "no interest in negotiating" and made clear the broad scope of relief that the White House is willing to support: "substantial funds for schools, child care, food, vaccines, hospitals, PPP for small businesses, rental assistance, broadband, airports, state and local government assistance, and liability protection for universities, schools, and businesses." (The White House had previously distanced itself from the liability piece, calling it a Senate GOP priority.)

On MSNBC, Speaker Pelosi suggested that Republican proposals in areas like food assistance is paltry, and until they're ready to come up to $2 trillion, "it's no use sitting in a room and let them tell us that states should go bankrupt. The fiscal soundness of our states is essential to the strength of our economy." She said of Democrats and the Administration, "we're miles apart."

National Economic Council Director Larry Kudlow suggested at the White House yesterday that a large coronavirus bill may not be necessary, Reuters reported. He said he doesn't think the stalemate between the White House and Democrats on the Hill will hurt the economy and only "targeted money" is needed now.

Also during the news conference, President Trump highlighted his executive action, saying: "I'm providing a payroll tax holiday to all Americans earning less than 100,000 per year, meaning bigger paychecks for working families through the end of 2020." He also said the approach is preferable to more additional direct stimulus payments: "We'll be terminating the payroll tax after I hopefully get elected, we will be terminating the payroll tax. So that will mean anywhere from $5,000 to even more per family and also great for businesses and great for jobs. That is better than the payments. That's better than anything else."

Building on comments he has made in recent days about seeking more tax relief for capital gains, President Trump said on Fox Business this morning that he would reduce the rate to 15% in his second term.

The New York Times reported, "White House officials have explored whether President Trump has the power to sidestep Congress and unilaterally cut a broad swath of taxes as the president looks for ways to inject fuel into a slumping economy." The report said temporarily delaying taxes allows President Trump to draw a contrast with presumptive Democratic nominee Joe Biden and his proposed tax increases and may "put Democrats in what will be the uncomfortable position of allowing those taxes to be reinstated when the deferment expires." It said Stephen Moore, a Heritage Foundation economist and previous Trump adviser, has urged consideration of delaying other types of taxes like the gas tax.

The U.S. Chamber of Commerce yesterday called for clear guidance on the payroll tax deferral.

The Senate is in session but not currently acting on any legislation. Leader Mitch McConnell (R-KY) took to the floor yesterday to say of coronavirus relief, in part, "The Democrats aren't taking this as a serious issue. They aren't acting like this is serious and the American people are hurt."

In a drill-down on one specific portion of coronavirus relief going without further funding, Politico reported, "The Paycheck Protection Program, which has kept millions of small businesses afloat during the pandemic, is in limbo, creating a new source of uncertainty for the country's economic recovery."

Election

Senator Kamala Harris (D-CA) appeared with Joe Biden for the first time since being announced as his running mate and blamed President Trump for the state of the coronavirus response. "Here's a reason it has hit America worse than any other advanced nation. It's because of Trump's failure to take it seriously from the start — his refusal to get testing up and running, his flip-flopping on social distancing and wearing masks, his delusional belief that he knows better than the experts."

President Trump defended his handling of the virus, saying "We've done more testing than anybody in the world. We've done the best job of any country in the world and that includes … making ventilators that nobody else could have done." He also pointed to tax increase proposals by Biden and Harris: "He wants to increase everybody's taxes. And she's one of the people that wants that."

The running mate choice continued to receive approval from many Democrats, with Speaker Pelosi saying on MSNBC, "let's recognize her not only as the first woman of color to be vice president, but the best possible person he could have chosen to proceed into this election and, of course, to win and serve the American people."

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