White House to propose $1.8 trillion stimulus

With the presidential election fast approaching, the White House is preparing a $1.8 trillion economic rescue plan to try to coax congressional Democrats into an agreement, according to media reports on Friday.

President Donald Trump, who this week has veered wildly in his position on stimulus to help the world’s largest economy recover from the damage done by the Covid-19 pandemic, now seems to be making a major push to roll out funding before his November 3 bid for re-election.

The new proposal, an improvement over the administration’s previous $1.6 billion offer, brings them closer to the Democrats’ latest package costing $2.2 trillion.

But Trump, who is trailing in the polls against Democratic rival Joe Biden, said he wants an even more robust plan.

“A lot of people are being hurt. I would like to see a bigger stimulus package frankly than either the Democrats or the Republicans are offering,” Trump said in an interview with conservative talk radio host Rush Limbaugh.

“I would like to see money going to people. It was not their fault.”

That marked the latest dramatic shift from the president who just days ago called off negotiations with Democrats and said there would be no new aid to struggling businesses and unemployed workers until after the election.

But as Trump has turned cheerleader and trumpets his newfound optimism, Senate Majority Leader Mitch McConnell poured cold water on the chances for a deal, saying Congress is unlikely to agree on a new stimulus package before the election due to “vast” differences over how much to spend.

“We do need another rescue package, but the proximity to the election and the differences of opinion about what is needed at this particular juncture are pretty vast,” McConnell said Friday at a press conference in his home state of Kentucky.

While he would like to see legislators rise above their political differences to approve “one last rescue package... I think that’s unlikely in the next three weeks,” the Republican senator said.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have been negotiating for weeks, raising hopes for a huge, new relief package to follow up on the $2.2 trillion CARES Act and other measures that brought the total aid passed by Congress to nearly $3 trillion.

Pelosi said differences remain over policy as well as money.

“I do hope that we will have an agreement soon,” Pelosi said Friday on MSNBC. “But as you say, they keep changing their minds.”

Pelosi’s spokesman Drew Hammill said Mnuchin on Friday “returned to the table with a proposal that attempted to address some of the concerns Democrats have.”

“Of special concern, is the absence of an agreement on a strategic plan to crush the virus. For this and other provisions, we are still awaiting language from the Administration as negotiations on the overall funding amount continue,” he said on Twitter.

Economists say a new round of government support is critical to prevent a wave of layoffs and bankruptcies and to provide continued support for the unemployed, and the IMF has urged governments worldwide to maintain spending measures to shore up their economies as the pandemic wreaks havoc.

In the tense final days of the campaign, the prospects for a deal took some head-snapping twists this week after Trump halted negotiations on Tuesday and then backpedaled amid an outcry from both parties and business leaders as well as a drop in the stock market.

Wall Street -- one of Trump’s favorite indicators of success -- veered higher after the news of the expanded White House offer, and the Dow Jones Industrial Average was holding on to a gain of 0.5 per cent at around 1900 GMT.

Trump earlier Friday was upbeat on the talks, tweeting “Covid Relief Negotiations are moving along. Go Big!” While Trump has downplayed the coronavirus even though he was hospitalized last week after contracting the illness, fellow Republican McConnell urged people to use masks and respect social distancing measures.

“It’s obvious this disease is not gone,” he said. “The only way to kill it is with a vaccine.”

Separately, Senator Marco Rubio, who has successfully urged the Trump administration to pursue investigations of Chinese companies, called on Friday for the US government to consider options to delay an initial public offering of China’s Ant Group, the fintech arm of Chinese e-commerce giant Alibaba.

“It’s outrageous that Wall Street is rewarding the Chinese Communist Party’s blatant crackdown on Hong Kong’s freedom and autonomy by orchestrating Ant Group’s IPO on the Hong Kong and Shanghai stock exchanges,” Rubio, a Republican, said in a statement to Reuters.

Agencies