Pelosi says she won’t budge on stimulus ahead of call with Meadows

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“They are just going to have to come up with more money,” Pelosi said. “That could be a very short conversation if they aren’t ready to meet in the middle.” Subscribe to Bull Sheet for no-nonsense daily analysis on what’s happening in the markets, delivered free to your inbox.

House Speaker Nancy Pelosi said she won’t budge from Democrats’ demands on a new pandemic relief package when she has her first discussion in three weeks with White House Chief of Staff Mark Meadows, diminishing prospects for progress in negotiations.

Pelosi and Meadows have scheduled a call Thursday afternoon, which will be the first time the key negotiators have spoken since stimulus talks hit an impasse on Aug. 7. The call is set for 2:30 p.m. Washington time, according to people familiar with the plan who requested anonymity to discuss the matter.

“They are just going to have to come up with more money,” Pelosi said. “That could be a very short conversation if they aren’t ready to meet in the middle.”

Democrats want Republicans to double their roughly $1 trillion stimulus offer in exchange for reducing their $3.4 trillion proposal by $1 trillion.

Meadows on Wednesday predicted that there would be no stimulus deal with House Democrats until the end of September, and said that they may be combined with a stopgap resolution needed to sustain funding of the federal government beyond Oct. 1, and avert a shutdown.

The new talks come after Meadows on Saturday tried to have an impromptu meeting with Pelosi while she was at the Capitol and went with his entourage to her suite, only to be told she was in a meeting.

Economic Warnings

Aid to state and local governments, the conditioning of school aid on fully re-opening classrooms, and the level of weekly unemployment insurance payments have been the biggest sticking points in the stalled talks. Democrats have been seeking $915 billion for regional authorities and a $600-per-week added unemployment benefit into 2021, significantly beyond what Republicans favor.

The White House has put $150 billion for states and localities on the table, and President Donald Trump on Aug. 8 signed an order creating a temporary $300-per-week benefit using limited disaster relief funds. 

That temporary unemployment benefit, which hasn’t yet been distributed, is expected to run out in under five weeks once the program gets up and running.

The U.S. economy continues to suffer from the coronavirus slowdown. Initial jobless claims in regular state programs were 1.01 million in the week ended Aug. 22, the second straight week above 1 million, Labor Department data showed Thursday.

Fiscal Imperative

Federal Reserve Chair Jerome Powell warned the U.S. faces a “long tail” of relatively high unemployment as people struggle to find work in industries hit hard by the pandemic. “We need to stay with those people. We need to support them,” Powell said Thursday at a virtual iteration of the Kansas City Fed’s annual Jackson Hole conference.

Powell also called for more direct aid to small businesses, putting the onus on Congress to step up on fiscal policy.

Senate Republicans continue to refine a slimmed-down stimulus proposal with $300 per week in unemployment benefits but without the $1,200 direct stimulus payments for most people — which both Trump and Pelosi have favored.

Discussions over the proposal aren’t expected to yield congressional floor action for weeks. The Senate isn’t scheduled to return to Washington until Sept. 8, with the full House returning for votes the following week.

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