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MNI (Washington)
WASHINGTON (MNI)

Congressional Democrats and White House negotiators failed to reach an agreement on a coronavirus package Friday as the White House prepares unilateral actions to break the logjam.

Treasury Secretary Steven Mnuchin told reporters that while he has been told by Trump to continue to seek a deal, there was a "lack of activity today." Senate Majority Leader Mitch McConnell sent members home rather than forcing impatient senators to bide their time, suggesting a vote on any deal won't come until late next week at the earliest.

"We're going to recommend to the president that over the weekend we move forward on some executive actions," on rental foreclosures and delaying student loan payments, Mnuchin said.

Both sides said the future of the negotiations were uncertain after a combative meeting on Friday and questions went unanswered as to whether further meetings are currently scheduled.

White House negotiators would be willing to come back and talk if Congressional Democrats have new proposals, Mnuchin said. But Democrats told Mnuchin to come back only when ready to talk about a higher number, House Leader Nancy Pelosi said.

Move a Trillion

"We'll go down USD1 trillion, you go up USD1 trillion," Pelosi said earlier Friday before the round of talks.

Her latest offer is around USD2.4 trillion and a series of GOP offers issued privately has brought the White House offer into the USD1.5 trillion range, above a Senate Republican bill unveiled earlier at USD1.1 trillion.

Talks have been in about the same place for two weeks, White House chief of staff Mark Meadows said. Meadows is helping lead the talks along with Mnuchin.

The lack of a deal may further weaken the world's largest economy as many unemployed people are now losing a weekly federal benefit of USD600. The Fed has said fiscal action is urgent with monetary policy going full tilt but unable to put cash directly in the hands of companies and households, and perceptions of a lagging Covid-19 recovery is one reason the U.S. dollar has weakened in recent weeks.

Meet in Middle

The divide over more funding for state and local governments moving to lay off workers to meet balanced budget laws was highlighted by Pelosi in comments to reporters. Trump tweeted late Friday afternoon that he has "no interest" in providing "Bailout Money to poorly run Democrat cities and states," contradicting earlier comments from Mnuchin about compromising around funds for local essential service workers.
Democrats want USD950 billion in new funding for state and local governments, while Republicans have offered about USD150 billion.

Talks have also failed to come to agreement on unemployment benefits, and McConnell's red line of liability protections from coronavirus-related lawsuits.

Even if an agreement is reached between the four negotiators, legislation would have to pass both chambers of Congress. It remains to be seen if any deal would garner enough support and whether Trump would sign a deal if it moved predominately with Democratic support.

"Because there are 20 Republicans who don't want to vote for anything, that doesn't mean the whole thing should shift in their direction. You have to meet in the middle," Charles Schumer, Democrat of New York, said Friday.

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com