Overnight, US Treasury Secretary Steven Mnuchin appeared before the House Select Subcommittee on coronavirus. In his opening remarks he noted: “While we continue to see signs of a strong economic recovery, we are sensitive to the fact that there is more work to be done, and certain areas of the economy require additional relief.” He called for Congress to reach a bipartisan agreement on a further relief package.
Negotiations between the Republicans and Democrats over another relief package hit a stalemate last month with the former offering USD1tn in additional spending against USD3.4tn proposed by the Democrats. Yesterday, Mnuchin took a more conciliatory tone stating: “Whether it’s one trillion or one-and-a-half trillion, again, let’s not get caught on a number” and that “Let’s move forward on a bipartisan basis now. I do not think the right outcome is zero. Nobody does.” However, Nancy Pelosi has been clear that the Democrats would not be willing to support a deal less than USD2.2tn which they see as meeting in the middle. But when asked if he would support this as a compromise Mnuchin replied “I do not support $2.2 trillion, but what's more important is what is the breakdown in getting money to American workers, American families, kids where we can agree on money. There is tremendous areas of agreement and that's what we should be doing right away.” Yesterday, following a call with Mnuchin, Nancy Pelosi stated: “Sadly, this phone call made clear that Democrats and the White House continue to have serious differences understanding the gravity of the situation that America’s working families are facing”. Thus, while both sides agree more relief is required, more wrangling and compromise looks to be required to agree the size and content of the package.
Faced with the impasse in negotiations with the Democrats in August, Trump has used his executive powers to provide some support including unemployment benefits as the unemployment benefits granted under the CARES Act came to an end in July. Yesterday, the Centre for Disease Control and Prevention, under an agency order, put in place a moratorium on the eviction of renters financially impacted by coronavirus until the end of the year. However, reaching a bipartisan agreement on a further relief package remains critical to sustain the US economic recovery.