Trump Threatens to Bypass Congress as Stimulus Talks Fail Again

By Emily Cochrane and Jim Tankersley

Democrats said the talks had been “disappointing,” and President Trump promised to use executive orders to provide relief if no agreement could be reached.

“This isn’t about negotiating or leverage or anything,” Speaker Nancy Pelosi said on Friday. “It’s about meeting the needs of the American people.”
“This isn’t about negotiating or leverage or anything,” Speaker Nancy Pelosi said on Friday. “It’s about meeting the needs of the American people.”Credit...Erin Schaff/The New York Times

WASHINGTON — Crisis negotiations between the White House and top Democrats teetered on the brink of collapse on Friday, as both sides said they remained deeply divided on an economic recovery package and President Trump threatened to bypass Congress and act on his own to provide relief if no deal could be reached.

In a hastily called evening news conference after talks on Capitol Hill broke up without a compromise, Mr. Trump said he could sign executive orders within a week to delay payroll tax collections, extend an eviction moratorium, give flexibility to Americans who owe student loans and supplement unemployment benefits through the end of the year.

“If Democrats continue to hold this critical relief hostage, I will act under my authority as president to get Americans the relief they need,” Mr. Trump said in a ballroom at his golf resort in Bedminster, N.J., where dozens of club members, some sipping wine, gathered to watch as the president claimed that the economy was quickly bouncing back.

It was not clear what power Mr. Trump might have to move unilaterally to extend jobless aid or otherwise redirect federal relief money as he sees fit because Congress controls spending. And Mr. Trump conceded that such a move was likely to be met with a legal challenge that would block any help from reaching the tens of millions of Americans who have depended for months on $600 weekly federal jobless payments that vanished last week in the absence of a deal to extend them.

“Probably, we’ll get sued,” Mr. Trump said.

But his threat to do so reflected the failure of days of marathon talks on Capitol Hill to reach a bipartisan compromise to pump more aid into the slowing economic recovery — and the president’s determination to be seen as acting in the face of the gridlock.

It came after another in a string of unproductive meetings between Mark Meadows, the White House chief of staff, and Steven Mnuchin, the Treasury secretary, and Democratic leaders, which ended with no agreement and no additional talks scheduled.

Lawmakers and lobbyists said Mr. Trump was looking at possibly invoking a law that governs federal response to natural disasters like hurricanes to unilaterally restore enhanced jobless benefits that expired last week. Administration officials have suggested Mr. Trump might seek to repurpose funds that Congress allocated for coronavirus relief this year that have not yet been spent by states or federal agencies.

Critical issues continue to divide the negotiators, including the overall price tag of the bill and whether to help states and localities across the country bridge budget shortfalls that are a direct result of the pandemic recession. The central tension point has been how much additional assistance to send to unemployed Americans. Democrats are pressing to extend the $600 weekly benefit, while Republicans have sought to cut it.

Mr. Trump declined to say how much jobless aid he would seek to provide by executive order.

Republicans have shifted position on the additional unemployment benefits, first proposing to extend them at a much lower rate, then raising their bid in negotiations with Democrats. But Mr. Trump has remained steadfast in his public opposition to any money for states and local governments, which he has falsely said would go only to states run by Democrats and does not have any relationship to the current crisis.

It was not clear whether any unilateral move by the president would effectively scuttle further talks, or serve to accelerate them. Democrats emerged from what they called a “disappointing” afternoon negotiating session accusing the administration of refusing to compromise.

“This isn’t about negotiating or leverage or anything,” Speaker Nancy Pelosi said. “It’s about meeting the needs of the American people.”

Even as they said they would advise Mr. Trump to issue executive orders to provide economic relief, administration officials held out the possibility that further negotiations could yet yield an agreement.

“I don’t want to speculate as to whether there is an agreement or not,” Mr. Mnuchin said. “We will continue to try to get an agreement that’s in the best interest of the people, and that’s why we’re here.”

Mr. Meadows conceded that executive orders were not “a perfect answer — we’ll be the first ones to say that.”

“But it is all that we can do and all the president can do within the confines of his executive power,” he added, “and we’re going to encourage him to do it.”

Democrats, who had earlier said they would be willing to lower their spending demands to $2.4 trillion from $3.4 trillion, said the White House needed to return with a higher overall price tag, after Mr. Trump’s negotiators declined to accept that offer. Republicans have proposed a $1 trillion plan.

“The House is Democratic, they need a majority of Democratic votes in the Senate,” said Senator Chuck Schumer of New York, the Democratic leader. “Meet us in the middle — for God’s sake, please — for the sake of America, meet us in the middle.”

Mr. Mnuchin and Mr. Meadows demanded that Democrats agree to lower the amount of aid for state and local governments, and provide more specifics about how they were proposing to revive lapsed unemployment benefits.

A jobs report on Friday that found that the United States economy added 1.8 million jobs in July further muddled the talks, giving each side support for its talking points. Democrats seized on it as a call to action, quickly issuing a statement calling for a face-to-face meeting to continue negotiations on the stimulus package.

But the White House and Republicans, who are pressing for a narrower recovery measure, cheered the report, which beat economists’ expectations, and were likely to see it as confirmation of their argument that it is time to scale back federal help.

The overall scope and cost of any agreement remains one of the most significant sticking points, along with how much aid should be provided to state and local governments. Republicans have offered $150 billion in new relief, arguing that a significant portion of aid allocated in the $2.2 trillion stimulus law has not yet been spent, while Democrats included nearly $900 billion in their opening proposal.

ImageMark Meadows, left, the White House chief of staff, with Steven Mnuchin, the Treasury secretary, after meeting on Friday with Ms. Pelosi and Senator Chuck Schumer.
Mark Meadows, left, the White House chief of staff, with Steven Mnuchin, the Treasury secretary, after meeting on Friday with Ms. Pelosi and Senator Chuck Schumer.Credit...Erin Schaff/The New York Times

In a private call with Republican senators on Friday morning, Mr. Mnuchin and Mr. Meadows indicated that the funding for state and local governments remained one of the most stark divisions between the two parties, according to two people familiar with the discussion, who spoke on the condition of anonymity to disclose the details of a private phone call. One person said that the two administration officials singled out education funding as another sticking point, given that Democrats were pressing for far more relief to send to schools, as well as a Democratic demand for additional relief for the Postal Service and election protections ahead of the general election in November.

Mr. Trump has threatened all week to act on his own if no deal can be reached, telling reporters that he could move as soon as Friday or Saturday. At his news conference on Friday night, he said the action could come next week.

Any move to reprogram unspent federal dollars for unemployment could prompt legal challenges that could stall its delivery. Even without those challenges, overburdened state unemployment offices could need weeks or as much as a month to begin supplementing traditional benefit checks again with federal dollars. The orders would do nothing to help small businesses that have already exhausted federal assistance or state and local governments bracing for layoffs amid declining tax revenues.

Suspending the payroll tax will do nothing to help unemployed Americans, and analysts warn it could likely not help workers, either. That is because workers would still be on the hook to pay the deferred taxes next year, and many employers will choose to continue to withhold the taxes to guard against workers owing penalties on unpaid taxes.

Economic forecasters expect the job market to cool even further this month and in September, particularly if consumer spending declines because of the expiration of unemployment benefits.

Nicholas Fandos contributed reporting.