In scuttling stimulus talks, Trump invites political risk for himself and Republicans
By Jim Tankersley and Emily Cochrane
President Donald Trump’s decision to walk away from bipartisan talks over a coronavirus aid bill less than a month before Election Day was a remarkably perilous act for a president about to face voters and for Republicans who are fighting to keep the Senate and now risk being blamed for the collapse of a compromise that had always faced steep obstacles.
Vulnerable Republicans were alarmed at what one of them, Sen. Susan Collins of Maine, called a “huge mistake.” Democrats seized on the president’s move to accuse Trump of callous disregard for Americans struggling amid the pandemic. And by Tuesday night, Trump himself took to Twitter to try to walk back his own decision to kill the negotiations, suggesting that he might support narrower stimulus measures.
But such bare-bones plans have been rejected by Democrats and Republicans alike, and there was little reason to believe they would be successful now. If that holds, there will be no comprehensive plan to provide jobless aid or stimulus checks to Americans, furnish aid to small businesses and airlines, or send federal support to state and local governments, at least for now. The economic recovery will continue to shudder, and Trump will have left little ambiguity about how a plan to stabilize it finally fell apart.
“Trump made this really easy for Democrats,” said Tony Fratto, a former aide to President George W. Bush, who is now a partner at Hamilton Place Strategies in Washington.
“Republicans can try to explain that the blame is on Democrats. Democrats only have to hold up Trump’s tweet, taking the blame himself.”
Former Vice President Joe Biden, the Democratic presidential nominee, did just that Tuesday in his own Twitter post that said, “Make no mistake: if you are out of work, if your business is closed, if your child’s school is shut down, if you are seeing layoffs in your community, Donald Trump decided today that none of that matters to him.”
Even as Republicans publicly blamed House Speaker Nancy Pelosi for the breakdown, saying she had been unwilling to compromise, multiple aides privately likened the president’s tweets to his 2018 declaration that he would be “proud to shut down the government for border security.” His words at the time effectively handed Democrats political cover for the historic lapse in government funding that would follow, and top Republican officials feared that they could have the same effect now, with voters already casting ballots.
In an interview on ABC’s “The View” Wednesday, Pelosi said Trump’s blitz of follow-up tweets calling for tailored aid measures was evidence that he had seen the political downside of ending negotiations, saying the president was “rebounding from a terrible mistake that he made yesterday, and the Republicans in Congress are going down the drain with him on that.”
Compounding the political risk, Trump said the halt in stimulus negotiations would give Republicans time to focus on quickly confirming his Supreme Court nominee, Judge Amy Coney Barrett, a move that polls have shown is unpopular with voters. By contrast, Americans are overwhelmingly in favor of another stimulus bill.
“This is going to make it very hard for him to make the case that he’s doing all he can to pull the nation out of economic malaise,” Fratto said.
Trump vowed that a recovery plan would pass “immediately after I win,” but there was little indication that the powerful political disincentives that have so far stymied efforts to strike a bipartisan deal would dissipate in the lame-duck session that bridges the weeks between Election Day and the start of a new Congress in January. The election outcome, aides and lawmakers warned, could in fact deepen the intransigence on both sides, further delaying relief to Americans.
For months, even as the economic need grew and the contours of a compromise became clear, political forces have conspired to thwart a stimulus deal. Republicans who feared Trump was headed for defeat in November began polishing their fiscally conservative credentials in anticipation of future campaigns, including the 2024 presidential race, by asserting their opposition to another costly aid plan. By staying out of the talks early and remaining disengaged at key moments, Trump confounded many in his own party by failing to push Republicans to cut a deal, a detachment that only grew after he signed executive orders in August that attempted to bypass Congress to deliver some relief.
And Democrats, sensing mounting Republican political vulnerability, have been unwilling to make many concessions — which could provide a potential political lifeline to Trump and his party — when they believe an electoral sweep for their party in November could allow them to push through a far more generous bill after Election Day. Top Democrats believe that voters increasingly see Trump as a “chaos” president and that a last-minute agreement could temper that perception.
“Their political positions are far apart, and their polling, which is being done daily, says they’re not being punished for not doing a deal,” Douglas Holtz-Eakin, a former head of the Congressional Budget Office who runs the conservative think tank American Action Forum and remains close to many Republicans in Congress, said last week. “The minute that changes, they’ll shift.”
The elements of an agreement have been obvious for some time: a price tag somewhere around $2 trillion, including extended aid of around $400 a week for the unemployed; additional support for small businesses and direct payments to low- and medium-income households; liability protections for businesses and workers; and more money for schools, state and local governments and coronavirus testing.
Democrats had started negotiations north of $3 trillion, with a bill that passed the House in May. Sen. Mitch McConnell, R-Ky. and the majority leader, waited until midsummer to present his party’s $1 trillion plan but has since scaled down his offer considerably to $350 billion, even as the Trump administration was reaching for a much larger package. Trump has been a disruptive force in the negotiations, never making clear what he wanted and by turns cheering on the talks and moving to blow them up.
As recently as Saturday, he had called for an agreement, tweeting, “OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE.”
Jason Furman, a former top economist for President Barack Obama, had recently begun pushing for Democrats to accept an offer by Treasury Secretary Steven Mnuchin, the lead White House negotiator, of a $1.6 trillion package, stressing the potential harm to people and businesses if the economy went months without more stimulus.
“I’m disappointed that policymakers haven’t come together more quickly because time really matters here,” Furman said in an interview. “It matters for schools. It matters for families. It matters for testing to control the spread of the virus.”
Business groups pressured congressional leaders on both sides to compromise, to little avail.
Several analysts blamed the relative stability of stock markets in recent months for undermining urgency for another package, a sentiment Trump seemed to reflect in his Twitter posts Tuesday. “Our Economy is doing very well,” he wrote. “The Stock Market is at record levels.”
After Trump’s posts withdrawing from negotiations, the S&P 500 dropped. On Wednesday morning, it rose again, on what analysts speculated was hope that Trump’s latest Twitter posts might revive the stimulus talks.