Pelosi, Mnuchin search for common ground as U.S. COVID-19 talks resume

[October 09, 2020]  By Richard Cowan and Patricia Zengerle

WASHINGTON (Reuters) - U.S. House of Representatives Speaker Nancy Pelosi on Thursday said legislation to help airline companies survive the fallout from the coronavirus pandemic could only move through Congress with guarantees that a comprehensive aid bill would be developed too.

In an interview with Bloomberg TV, Pelosi also expressed confidence that she and Treasury Secretary Steven Mnuchin will be able to reach an agreement on the amount of aid in new legislation to "crush" COVID-19 cases, which are still rampant in the United States.

Pelosi said there was "a clear understanding" that airlines aid had "to be in the context of a fuller bill. They don't have to happen at the same moment but they have to be happening with the assurance that we will go beyond the assistance to the airlines."

Earlier, at a weekly news conference, Pelosi said, "There is no standalone bill without a bigger bill."

During a 40-minute conversation between Pelosi and Mnuchin later in the day, the two officials "focused on determining whether there is any prospect of an imminent agreement on a comprehensive bill. The Secretary made clear the President's interest in reaching such an agreement," wrote Pelosi Deputy Chief of Staff Drew Hammill in a tweet.

White House spokeswoman Alyssa Farah roiled the waters, however, when she told reporters that Trump wants a "skinny" coronavirus relief bill, despite Pelosi's insistence on a comprehensive measure in addition to helping the nation's airlines.

The Democratic speaker particularly wants to dispatch hundreds of billions of dollars to state and local governments to help them grapple with falling revenues and worries of laying off police, firefighters and other front-line workers as the pandemic hobbles the U.S. economy.

Rather than pass a comprehensive bill, along the lines of a measure approved in mid-May by the Democratic-controlled House, the Trump administration is focused on providing separate "standalone" bills.

Besides helping struggling U.S. airlines, they want to deliver another round of $1,200 direct payments to Americans.

U.S. stocks rose on Thursday amid prospects in Washington of additional coronavirus aid.

Senate Majority Leader Mitch McConnell, at a news conference in his home state of Kentucky, said another rescue package was needed but noted "vast differences" over costs. He said the looming Nov. 3 U.S. elections have made it harder to reach a bipartisan compromise.

Earlier on Thursday, Trump told Fox Business network in a telephone interview about talks, "Now they are starting to work out." Two days ago, he cut off negotiations via a post on Twitter.

Democrats have been pushing for $25 billion in new aid to alleviate airline companies' planned layoffs. But they have called for at least $2.2 trillion in wide-ranging aid, while top Trump aides have signaled a willingness for around $1.6 trillion.

U.S. House Speaker Nancy Pelosi departs a news conference on Capitol Hill in Washington, U.S. October 8, 2020. REUTERS/Erin Scott

Trump's remarks early on Thursday were one more lurch in a roller-coaster week in which he had reversed his call for intensive negotiations on a new coronavirus aid bill by proclaiming that there would be no more talks on a deal until after the Nov. 3 presidential and congressional elections.

Trump, who was diagnosed last week with COVID-19, is trailing Democratic presidential candidate Joe Biden in public opinion polls less than a month before the election.

Worries over the pandemic top voters' concerns and Trump has gotten low marks on his handling of it.

Meanwhile, White House economic adviser Larry Kudlow told Fox News that the U.S. economic recovery does not depend upon another stimulus bill, despite warnings from Federal Reserve Chairman Jerome Powell that action was needed.

But Kudlow added that the administration wants to see "standalone" bills to provide additional unemployment assistance, an extension of the Paycheck Protection Program small business loans, stimulus checks for individuals and education aid.

All these components would make for a package with a high price tag -- possibly well beyond anything Senate Republicans would support.

Two conservative Republicans, Senators Mike Lee and Pat Toomey, on Thursday questioned any new aid to U.S. airlines, saying that no other Fortune 500 firms have received taxpayer-funded grants and that they should rely on existing long-term federal loans.

"The excess capacity of the airline sector will not be resolved in the near future and continuing to force the entire payroll obligation onto the taxpayers is not sustainable," Toomey and Lee said in a statement.

Many Senate Republicans have balked at spending anything over $1 trillion in new aid, with some of them opposed doing anything beyond the more than $3 trillion enacted earlier this year.

McConnell, a Republican, wants to concentrate in the weeks before the election on confirming Amy Coney Barrett to the U.S. Supreme Court vacancy created by the death of Justice Ruth Bader Ginsburg.

(Reporting by Patricia Zengerle, Susan Heavey, Lisa Lambert, David Morgan, Susan Cornwell and Richard Cowan; Editing by Chizu Nomiyama and Alistair Bell)

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