U.S. lawmakers say deal on coronavirus relief remains elusive

U.S. House Speaker Nancy Pelosi, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows made clear in separate interviews Sunday that they remain far apart on a coronavirus relief deal that would restore expired unemployment benefits for millions of Americans.

The three spoke a day after a rare weekend meeting at the Capitol yielded some signs of progress. They plan to meet again on Monday, but pointed to multiple areas of disagreement that suggest consensus remains elusive, even while saying they would continue to work toward a deal.

“We still have a long ways to go,” Meadows said on CBS’ “Face the Nation.” “I’m not optimistic that there will be a solution in the very near term.”

Pelosi, D-Calif., who has been pushing for a comprehensive bill to address multiple economic and health care needs, insisted the administration continues to resist a public health strategy to attack the virus, which is surging in many states.

“That is one of the points we still have not come to any agreement on,” Pelosi said on ABC’s “This Week.”

Mnuchin defended the administration’s response to the pandemic, while pointing to Democrats’ demands for $1 trillion in new state and local aid as a non-starter.

“The Democrats right now are insisting on over $1 trillion to state and local governments and that’s something we’re not going to do,” Mnuchin said on ABC.

Pelosi, Mnuchin and Meadows have met almost daily for the past week at the Capitol along with Senate Minority Leader Charles Schumer, D-N.Y., as they try to craft a new coronavirus relief bill.

After struggling to reach agreement among themselves on an overall bill, Republicans and administration officials have been pushing for a short-term fix to address the expiration of $600 weekly enhanced unemployment benefits, which lapsed Friday for some 30 million workers.

Democrats continue to resist a short-term approach, and rejected an administration proposal to extend the $600 benefit for an additional week to give more time to negotiate. Pelosi has said that idea was pointless since the parties were not close to a deal.

“We will be close to an agreement when we have an agreement,” Pelosi said Sunday.

Republicans have proposed reducing the $600 weekly payment to $200, or adopting a formula that would amount to replacing about two-thirds of a worker’s wages before they were unemployed. They have consistently argued the $600 enhanced benefit, which comes on top of whatever benefit is provided by state unemployment systems, is so generous it provides a disincentive for jobless people to return to the workplace.

Mnuchin repeated that argument Sunday, while acknowledging it was not always the case.

“Let’s just face it, we know factually there are cases where people are overpaid. There are cases where people are underpaid,” Mnuchin said.

For many low-wage workers, the benefits have amounted to a bump in pay from what they were making at previous jobs. Studies have estimated between 40% and 68% of people on unemployment insurance are making more with the extra $600 than they were previously at work.

But some preliminary studies on the issue have not found the temporary bump is a disincentive for a noticeable number of workers. A recent study by three Yale economists found workers receiving the extra benefits returned to work at roughly the same rate as others, finding “no evidence that more generous benefits disincentivized work.”

Pelosi suggested Democrats could be open to an approach that reduced the $600 over time as the unemployment rate declines, an idea that has been embraced by a number of congressional Democrats.

“The amount of money that is given as an enhancement for unemployment insurance should relate to the rate of unemployment, so as that goes down you can consider something less than $600, but in this agreement it’s $600,” Pelosi said.

Many economists believe the expiration of the enhanced benefits, which were approved in March as part of Congress’ $2 trillion Cares Act, will act as a drain on the economy, since the extra money allowed workers to pay rent and buy groceries and other necessities. A moratorium on evictions also recently expired, and the administration has discussed renewing that as part of a short-term fix that could include other elements as well, such as more money for schools and the small-business Paycheck Protection Program.

House Democrats passed a $3 trillion bill in May that would have extended the $600 enhanced benefits through January. They are incensed that Republicans waited months to start negotiating again, only to quickly run up against the unemployment insurance deadline and start demanding a short-term solution.

Mnuchin defended the GOP approach, saying it made sense to wait and see how the programs Congress approved in the spring had worked. Four bipartisan bills passed in March and April injected around $3 trillion into the economy.

“That has never been done in the history of time,” Mnuchin said.

But now, Mnuchin said, “The president is determined to spend what we need to spend and we’re acting very quickly now. … We’re going to work every day until we reach a reasonable agreement that’s good for the American public.”

On Thursday, the Commerce Department reported that the U.S. economy shrank by a record 9.5 percent from April through June. Most lawmakers of both parties agree on the need for more action from Congress, although Senate Majority Leader Mitch McConnell, R-Ky., has said about 20 Senate Republicans believe no additional action is needed, in part because of deficit concerns.