In a Tuesday afternoon Twitter post President Donald Trump said he opposed House Democrats’ $2.4 trillion coronavirus stimulus legislation.“Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19,” Trump wrote on Twitter “We made a very generous offer of $1.6 Trillion Dollars and, as usual, she [House Speaker Nancy Pelosi is not negotiating in good faith. I am rejecting their.. … request, and looking to the future of our Country. 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 added that he has requested Senate Majority Leader Mitch McConnell to focus full time on approving his nominee Judge Amy Coney Barrett to the US Supreme Court.
Stocks had been modestly higher earlier in the day with the Standard & Poor’s 500 up 0.29% at 2 p.m. New York time. But they immediately tumbled on the news. At the close the S&P was down 1.40%. The NASDAQ Composite, which had been up 0.15% at 2 p.m., was down 1.57% at the close The Russell 2000, which had continued a recent run of strength by gaining 1.86% as of 2 p.m., fell to a loss of 0.30% at the close.
Treasury Secretary Steven Mnuchin and House Speaker Pelosi had been slated to hold more discussions on the size of another round of coronavirus stimulus today following a week of phone negotiations. Mnuchin, negotiating for the White House, had last offered a deal for $1.6 trillion in stimulus spending.
With Senate Majority Leader Mitch McConnell ceding the lead on the package to the President, today’s Twitter post leaves no one on the Republican side pushing for another round of stimulus.
In short no talks and no stimulus package until after the election.
And maybe not even until January
I’d point out, it’s likely that Republicans will only look to move ahead in November if President Trump and the party win on November 3. If Republicans lose the White House and the Senate, I’d have to question the willingness of Republicans to pass anything while they continue to hold a Senate majority until the new Congress meets in 2021. For their part, I would question the willingness of Democrats to accept a smaller stimulus package in any lame duck session at the end of 2020 if they win the White House and the Senate. If the Republicans retain control of the White House and the Senate, but the Democrats retain control of the House of Representatives in a new Congress, we’re back to the same stalemate in January.