Mnuchin pitches new $1.2 trillion Covid-19 stimulus package to Pelosi

WASHINGTON (BLOOMBERG) - Treasury Secretary Steven Mnuchin said he presented a new US$916 billion (S$1.22 trillion) Covid-19 relief proposal to House Speaker Nancy Pelosi, in the first move by the Trump administration since Election Day to break a months-long standoff.

Ms Pelosi and Senate Democratic leader Chuck Schumer called it progress, but said it shouldn't be used to obstruct the bipartisan negotiations already underway on a proposal from a group of Democratic and Republican lawmakers.

The Mnuchin offer, which was made to Ms Pelosi in a 5pm phone call on Tuesday (Dec 8), was essentially a joint proposal from the White House, Senate Majority Leader Mitch McConnell and House Republican leader Kevin McCarthy.

Mr Mnuchin said he conferred with President Donald Trump, whose support will be needed to gather GOP votes.

"This proposal includes money for state and local governments and robust liability protections for businesses, schools and universities," Mr Mnuchin said in his statement.

Those two issues have been the two key roadblocks in bipartisan talks on a US$908 billion proposal put forth last week.

"It's a much better product" than the US$908 billion option, House Republican leader Kevin McCarthy said in an interview.

Ms Pelosi and Mr Schumer said in a joint statement that getting Mr McConnell to go along with a US$916 billion proposal was progress, but that the focal point should be the talks still going on in Congress on the bipartisan plan.

They faulted the White House plan for leaving out enhanced unemployment benefits. "Members of the House and Senate have been engaged in good-faith negotiations and continue to make progress," they said. "The bipartisan talks are the best hope for a bipartisan solution."

Along with a widely supported renewal of aid for small businesses, the Mnuchin plan includes stimulus checks, something that members of both sides of the aisle have favoured - including President-elect Joe Biden and Mr Trump.

There's US$600 per qualifying adult, with another US$600 per child, according to Mr McCarthy.

Those cheques would be in place of the US$300 a week temporary supplementary unemployment benefits included in the bipartisan proposal.

The proposal does extend two other expiring Unemployment insurance programs one for gig workers and the other for workers who have exhausted their 13 weeks of standard benefits.

The administration's new approach also has US$160 billion for aid to state and local authorities, according to a person familiar with the matter.

That's on the face of it the same scale of help as in the US$908 billion bipartisan plan. Another US$100 billion goes for education funding, the person said.

Mr McConnell earlier Tuesday had floated the idea of setting aside the two elements in a final 2020 aid package - something Democratic leaders quickly rejected.

Mr Mnuchin's plan ties both provisions so they can either be removed or stay in together, according to Mr McCarthy.

Asked about Mr Mnuchin's plan, a spokesman for Mr McConnell said the leader has no further remarks beyond his statement earlier Tuesday.

Liability protections have been a key priority for Mr McConnell, but opposed by Democrats. Republicans, meantime, have criticised helping states as an improper bailout.

Representative Hakeem Jeffries of New York, a member of Ms Pelosi's leadership team, called Mr Mnuchin's move "a step in the right direction" and said "I think this plane is going to get landed."

Still, Senate Democratic leader Chuck Schumer said earlier Tuesday Democrats viewed stimulus checks as needed to be added to the US$908 billion bipartisan package, and not replace other elements - in the way the Mr Mnuchin plan has done.

Mr Mnuchin said that he and White House Chief of Staff Mark Meadows had "reviewed" the US$916 billion proposal with Mr Trump, Mr McConnell and Mr McCarthy.

Mr Schumer in his earlier comments said that leaving out state and local aid would hurt essential workers across the nation, including police officers and firefighters, who face job losses.

He accused Mr McConnell of "pulling the rug out" from under the bipartisan group of lawmakers working on the US$908 billion plan. Mr Schumer and Ms Pelosi had backed that framework as a basis for negotiations.

While Mr Mnuchin had led talks for weeks with Ms Pelosi on a stimulus deal before Election Day, the administration thereafter largely left it to Mr McConnell to deal with Democrats on the matter.

The Senate majority leader has repeatedly called for support for his own, smaller and more targeted proposal. He also refrained from endorsing the bipartisan pitch as a base for talks even as some GOP members warmed to the idea.