President Donald Trump has ordered his negotiators to halt talks over a new stimulus package, after the two sides have struggled for months to reach a deal, a stunning move that puts an end to last-ditch efforts for a major economic relief package as millions are reeling from the coronavirus crisis.
“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 wrote in a series of tweets Tuesday afternoon.
Trump’s message stunned lawmakers – especially since Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi had been trading proposals and negotiating for days in the hopes of narrowing their differences, though they were still far apart in their talks.
The decision to pull the plug on the talks is a major blow to Americans still struggling with the fallout from the once-in-a century pandemic and endangers an economic recovery that for months was driven by the initial $2.2 trillion stimulus passed by Congress in the spring. With that money largely spent and gone, economists – including Federal Reserve Chairman Jerome Powell in a renewed plea for action Tuesday – have warned more support is imperative in the months ahead.
The timing of Trump’s sudden move perplexed even Republicans since there was little downside politically to allowing the talks to continue to play out. Now, they fear, that Trump’s decision will make it easier for Democrats to pit the blame squarely on the White House for the collapse of the talks as many voters are eager for more relief from Washington.
Trump weighed in shortly after a private conference call with Senate Majority Leader Mitch McConnell, House GOP Leader Kevin McCarthy and Mnuchin, who was scheduled to speak later Tuesday afternoon with Pelosi.
The President’s tweet may have come as a surprise to some top Republicans as well as Democrats.
On Trump call with GOP leaders, the President signaled he wanted a deal and didn’t say he was going to pull the plug on the talks, according to a source familiar with the call.
Republicans were critical of Pelosi, arguing she was moving the goalposts and noted there were plenty of obstacles to get a deal. But the expectation after that call was that talks would continue.
McConnell indicated Tuesday afternoon, however, that he backs Trump’s move to end stimulus talks.
“I do,” McConnell told CNN when asked if he supports the President’s decision.
“I think his view was that they were not going to produce a result and we need to concentrate on what’s achievable,” McConnell said of Trump’s move.
But in the wake of the announcement, the President’s call to end the talks generated some bipartisan pushback.
Sen. Susan Collins of Maine, a Republican up for reelection in one of the tightest races this cycle, called the decision to end talks a “huge mistake” and said in a statement that she had been in touch with Mnuchin.
And GOP Rep. John Katko, a New York lawmaker who represents a swing district, responded to the news in a tweet saying, “I disagree with the President. With lives at stake, we cannot afford to stop negotiations on a relief package,” and adding, “I strongly urge the President to rethink this move.”
Pelosi slammed the announcement from the President in a statement, saying, “Clearly, the White House is in complete disarray.”
“Today, once again, President Trump showed his true colors: putting himself first at the expense of the country, with the full complicity of the GOP Members of Congress,” Pelosi said, adding, “Walking away from coronavirus talks demonstrates that President Trump is unwilling to crush the virus.”
Pelosi and Mnuchin spoke over the phone at 3:30 p.m. ET, according to Drew Hammill, Pelosi’s deputy chief of staff, who tweeted that Mnuchin “confirmed that the President has walked away from COVID talks.”
“The Speaker expressed her disappointment in the President’s decision to abandon the economic & health needs of the American people,” Hammill said.
Pelosi unloaded on the President over the decision during a private conference call with House Democrats on Tuesday, telling her caucus that Trump isn’t telling the truth about the negotiations, arguing that Democrats have a scientific plan to crush the virus and that Republicans have a real contempt for science, a person on the call told CNN.
Pelosi warned that health care workers will lose their jobs and people will get hurt by Trump’s decision, calling it a sad moment for the country, the person said.
The speaker addressed the news on the call by saying of Republicans, “This is who they are,” a source told CNN.
Pelosi also questioned whether Trump taking a steroid was impacting his thinking, according to two people on the call. Trump was given the corticosteroid drug dexamethasone on Saturday after his oxygen level transiently dipped, White House physician Sean Conley said during a briefing on Sunday.
“Believe me, there are people who think that steroids have an impact on thinking,” Pelosi told Democrats as she tried to explain her view of what the President was trying to do, a person on the call said. “So I just don’t know.”
After her statement, a “dear colleague” letter to Democrats and her comments to the full caucus, Pelosi continued hammering Trump on a Democratic leadership call, according to a source with knowledge of the call.
Pelosi said that Trump is “desperate” and so is trying this “stunt.” She called his abrupt decision to end the talks a “Hail Mary.”
She also said his tweet was incorrect. Trump said he came up to $1.6 trillion, but she said that Mnuchin was at $1.3 trillion. Either way, she said, it was too little.
She criticized Mnuchin’s final offer as meager on unemployment insurance, money for schools, child care, and for state and local governments. And in her “dear colleague” letter, Pelosi cited the need for more stimulus mentioned in the Federal Reserve chairman’s remarks from earlier Tuesday.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Pelosi quoted Powell as saying. “Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy and holding back wage growth. By contrast, the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste.”
In one sign of how the announcement from the President took lawmakers by surprise, one member texted CNN that Trump’s tweet was “incredible,” while another reacted by saying only, “wow.”
Democrats and Republicans have been at odds over proposals for a new stimulus measure for months, despite efforts to reach a deal through bipartisan negotiation.
One of the key issues has been disputes over a price tag for any new stimulus.
Last week, the House of Representatives approved a $2.2 trillion coronavirus stimulus measure put forward by House Democrats with no bipartisan deal in sight as Pelosi and Mnuchin continued talks.
The legislation gives Democrats something to point to as lawmakers face pressure from constituents to deliver more aid as the pandemic continues to take a devastating toll across America.
But the Democratic plan was widely rejected by Republicans as too costly and is not expected to be taken up by the GOP-led Senate.
That vote came after House Democrats moved in May to pass a sweeping bill to spend roughly $3 trillion on relief measures, a proposal that similarly generated opposition from Republicans, who dismissed the aid package as a liberal wish list.
This story has been updated with additional developments Tuesday.
CNN’s Jacqueline Howard contributed to this report.