“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump tweeted on Tuesday.
Trump’s announcement is a huge blow for thousands of airline workers facing layoffs, millions of small businesses, and 26 million unemployed Americans. It also dashes hopes for another round of stimulus checks.
The financial markets reacted negatively immediately following Trump’s tweet, with the Dow Jones Industrial Average plunging more than 600 points.
The biggest sticking points to a deal for another stimulus package have been pretty consistent for months now: financial aid to cities and states, liability protections for businesses, and the overall cost of the package.
The two sides made some progress during renewed negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin this month, but they were still said to be far apart, particularly on the scope of the measure. Democrats passed a scaled-down $2.2 trillion bill last week; Republicans, particularly in the Senate, opposed a larger package.
“We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith,” Trump claimed of Pelosi in a tweet on Tuesday.
Meanwhile, Pelosi blasted Trump for walking away from talks and accused him of “putting himself first at the expense of the country, with the full complicity of the GOP Members of Congress.”
“Clearly the White House is in complete disarray,” the speaker added in a statement.
Trump walking away from stimulus talks robs Republicans, especially vulnerable ones who are on the ballot this year, of a key talking point just weeks from the Nov. 3 election. Prior to Tuesday, GOP lawmakers often claimed Pelosi did not want a deal on another stimulus package. Now Democrats can say it was Trump who killed the talks and who does not want to provide additional coronavirus relief to millions of struggling Americans.
Federal Reserve Chairman Jerome Powell said earlier on Tuesday that the U.S. economy will suffer without more fiscal relief from Congress, warning of “tragic” consequences if it does not act.
“At this early stage, I would argue that the risks of policy intervention are still asymmetric. Too little support would lead to a weak recovery, creating unnecessary hardship,” Powell said.
Economists are for the most part astonished that Trump has not pushed for more stimulus, at a time when a boost to the economy could help his reelection chances.
“I’ve been floored it hasn’t happened,” said Heidi Shierholz, a senior economist at the Economic Policy Institute who served in the Obama Labor Department. “People are begging Republicans to do the thing that would make it more likely that Trump gets reelected, including me.”
Emily Peck contributed reporting.