Stimulus impasse continues as a year goes by since Pelosi and Trump last spoke

House Speaker Nancy Pelosi and President Donald Trump last spoke by phone one year ago Friday.

That lack of communication — and complete implosion of any sort of professional relationship between the two — is not the reason the negotiations over a sweeping coronavirus relief package remain stalled.

But it certainly doesn’t help.

To be clear, Pelosi and Treasury Secretary Steven Mnuchin, Trump’s lead negotiator, have clinched several major deals — both in Covid relief and on the spending front — over the last few years. But those same deals have played a significant role in a new element that has helped cloud prospects for any kind of big deal: the lack of trust in Mnuchin from Senate Republicans, who for months have grumbled that the Treasury secretary has been too willing to accept Pelosi’s terms.

That, of course, is an area where Trump’s involvement — even, perhaps, through direct conversations with Pelosi — might help shake things loose. While the speaker-to-President calls haven’t happened (and there’s no sign any will occur any time soon), Trump did insert himself into the long-stalled stimulus talks last week. First he called them off entirely. Then he made clear he wanted to go “big” and signed off on a $1.8 trillion proposal to send Pelosi’s way.

The complete 180-degree turn happened in a matter of days and could be considered the opening act of something akin to a poorly performed high school musical with every actor on a different page. Trump, calling for a topline cost even higher than Democrats, while attacking Pelosi, the top Democratic negotiator, personally. Mnuchin making clear to Pelosi that Trump was serious about a comprehensive deal, as White House communicators indicated the official position was a piecemeal approach. Senate Republicans panning an larger deal, as Trump made clear they’d get on board if one was clinched. Trump panning Mnuchin’s inability to “come home with the bacon.”

All as Americans seeking unemployment benefits rose last week by the most in two months, small businesses continued to face waves of failure, airline layoffs mount, evictions loom and long-promised aid for schools, child care and frontline health care workers remained stuck and the coronavirus resurged in areas across the country.

Pelosi and Mnuchin did make tangible progress in their talks Thursday. Mnuchin agreed to accept “with minor edits” the Democratic language on a national strategic testing, tracing and surveillance proposal, according to Pelosi’s spokesman Drew Hammill. That had been the primary issue Pelosi had been publicly raising for several weeks — a central tenet in her stated goal to “crush the virus.”

But — and this is key here — Pelosi made clear to colleagues in a letter late last night that several very significant policy disputes are nowhere near resolved. This has always been the case and nothing, not even the progress on the testing piece of the talks, managed to bring those other policy disputes closer to resolution. Holdups include unemployment insurance, tax credits, child care funding and the liability protections. These aren’t small issues.

House Ways and Means Chairman Richard Neal, a Massachusetts Democrat, released a statement out of the blue on Friday pointing to the lack of expansions for the child and earned income tax credits in the Trump administration’s proposal.

“The Trump administration’s tone deaf relief proposal fails to include the robust assistance Americans need to survive the ongoing Covid-19 crisis,” Neal said. Several of Pelosi’s key chairs have put out similar statements in recent days. The translation — the outstanding issues aren’t minor. They are essentially the meat of any deal in the eyes of Democrats. And they remain unresolved.

Pelosi, in a call with House Democrats on Thursday, said they had reached a point of “maximum leverage,” according to a person on the call. It’s point she’s made, while making clear this would be the worst moment for Democrats to fold in the talks, repeatedly over the last week. To the Democrats who have grown antsy for a deal, or urged Pelosi to take the administration’s offer, Pelosi also laid out a promise in her letter to colleagues.

Democrats won’t leave the negotiating table, and any deal, she wrote, “will be safer, bigger and better, and it will be retroactive.”

Mnuchin has been steadfast — the Trump administration wants additional stimulus, is willing to try several different avenues, from standalone and scaled back proposals to a big deal, to get that done. But he’s also made clear significant differences remain.

“I don’t agree with the speaker’s approach of we have to do all or nothing,” Mnuchin said earlier this week. “We’re continuing to negotiate a comprehensive bill, but we want to put money into the economy now.”

Meanwhile Trump keeps claiming in interviews he’s willing to go higher on the topline, with seemingly no knowledge of the depth of the granular policy disputes that are the actual holdups to a Mnuchin-Pelosi agreement.

All of that comes as Senate Majority Leader Mitch McConnell publicly, and explicitly, shot down the idea any deal at or above $1.8 trillion would ever reach the Senate floor. In other words, he has no interest in anything Pelosi and Mnuchin are even discussing.

Instead, he will put a pared back $500 billion Covid relief proposal on the Senate floor next week. Asked back home in Kentucky if the proposal lined up with what Trump was pushing for, McConnell chuckled. “Actually, no,” he said.

“He’s talking about a much larger amount than I can sell to my members.”

McConnell also said publicly this week he knows the GOP proposal is likely to be blocked by Democrats. It would mark the second time Senate Democrats block a GOP stimulus effort, as they’ve repeatedly rejected standalone or piecemeal efforts in place of a comprehensive deal. Once that happens, he will move onto his central priority: the confirmation to the Supreme Court of Judge Amy Coney Barrett.

That gets to another key element, people involved point out: the clock. With less than three weeks to Election Day and a sizeable deal still far from in hand, even if Mnuchin and Pelosi were to reach an agreement in principle, the actual process of drafting it, socializing it with members, whipping votes then putting it on the floors of the respective chambers is time consuming. It’s something Mnuchin has acknowledged.

“We’ve struck midnight on the idea of any law being signed before the election,” one aide working on the proposal told CNN.

But McConnell’s public statements the last two weeks are something to keep top of mind whenever a deal is reached — if one is reached at all. There remains, and with good reason based on the last three-plus years, an assumption that Trump can just snap his fingers and get Republicans into line. He said as much when asked about the stimulus talks during his Thursday town hall on NBC. His top advisers appear to agree.

“The President wants a deal, Secretary Mnuchin is negotiating a deal, if Speaker Pelosi wanted a deal, I think we could roundup enough Senate Republicans to get a deal,” Larry Kudlow, a top White House economic official, said Friday on Fox Business.

Mnuchin, in a call Thursday afternoon, told Pelosi that if a deal is eventually reached, Trump would “weigh in” with McConnell in order to get him to change his mind.

But the context here is key: this isn’t just McConnell. It’s the vast majority of the Senate Republican conference that opposes where Mnuchin has taken talks. Mnuchin knows it first-hand. He was on the receiving end of a near-unified barrage of criticism about the direction of the talks on a conference call with Senate Republicans last weekend. McConnell set that call up.

And McConnell’s public position laid out several times this week reflects his conference. That position is unlikely to shift so long as his members remain in their current place.

As one GOP senator said with a laugh Thursday night when asked about Mnuchin’s comments to Pelosi regarding Trump pressing McConnell to put a bill on the floor if a deal is reached: “Good luck with that.”