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Expiring benefits raise economic stakes of stalled stimulus talks

10/18/2020

Washington's inability to pass a much-needed stimulus bill ahead of November's election is expected to inflict further damage on the economy, potentially kneecapping its recovery as the expiration of key benefits looms. Haggling between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin has progressed, with Mnuchin saying he is willing to sign on to a $1.8 trillion deal, but the sides say they remain far apart on key issues. President Trump has zigzagged from calling off talks because Democrats refused to lower their price tag to insisting that he was willing to shell out even more than what Pelosi had on the table.

Meanwhile, despite Trump’s insistence that Republicans are “ready to go” on whatever agreement Mnuchin and Pelosi strike, Senate Majority Leader Mitch McConnell (R-Ky.) has made clear that his caucus is opposed to a large spending package. He is instead moving ahead with a vote on a $500 billion package that seems unlikely to become law. With the election just more than two weeks away, the gridlock means that businesses and workers crushed by the COVID-19 pandemic are unlikely to see relief until the lame-duck session or possibly the new year. The outcome of the election, which could reshape the power levers in Washington, is poised to scramble the political calculus on each side for a deal and could block one from going forward altogether.

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