President Donald Trump said Tuesday that he had told his administration negotiators to end talks with Democrats on coronavirus stimuli until after the November 3 election.
The declaration, if the White House goes through, would stop continued pressure to send trillions of dollars more to Americans as the outbreak rages across the US and the economy struggles to recover from virus-related stalemate. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi discussed an aid package for an hour Monday and planned to speak again on Tuesday. Trump had asked the sides to close a deal just three days ago.
"I have instructed my representatives to suspend negotiations until after the election. Immediately after my victory, we will pass an important stimulus bill that focuses on hardworking Americans and small businesses," Trump tweeted on Tuesday.
The president added that he had asked Senate Majority Leader Mitch McConnell to "focus on confirming Supreme Court candidate Amy Coney Barrett." Trump spoke to Republican congressional leaders about stimulus plans earlier in the day.
In a statement on Trump's tweets, Pelosi said Trump "showed his true colors: he put himself first at the expense of the country, with the full complicity of GOP members of Congress." She added that "The departure of coronavirus talks shows that President Trump is not ready to destroy the virus."
Investors penalized stocks in response to Trump's tweets. The Dow Jones Industrial Average fell more than 300 points, about 1.1%, in the minutes following the announcement.
Although the talks had made little progress in months, traders had become more hopeful that the sides could reach an agreement ahead of the elections as many individuals and companies are struggling during the ongoing outbreak.
Congress has failed to provide new aid to individuals for months as millions of Americans have become unemployed in the pandemic battle to pay for food, rent, and other living expenses. Lifelines that supported the economy in the early stages of the pandemic, including the $ 600 weekly unemployment benefit and time window for applying for loans for the small business paycheck protection program, expired weeks ago.
In his Tuesday tweets, Trump appeared to be arguing that the U.S. economy doesn't need any further stimulus. He wrote, "We are world leaders in economic recovery, and the best is yet to come!"
While the US quickly regained many of the jobs it lost earlier this year, weaker-than-expected wage growth of 661,000 in September raised concerns about the slowdown in the US economic recovery. At 7.9%, the unemployment rate was still significantly higher than before the pandemic.
Trump's move to halt negotiations came just hours after Federal Reserve Chairman Jerome Powell urged Congress to approve further fiscal stimulus. A lack of sustainable support from the federal government could "lead to a weak recovery and create unnecessary difficulties for households and companies".
The president decided to back out of negotiations just weeks before an election where his battle against the virus outbreak and containment of the economic damage had hurt his chances of a second term in the White House. Former Vice President Joe Biden, who backed more incentives, has criticized the president for not limiting the economic devastation caused by the coronavirus.
Jared Bernstein, former Biden economic advisor and informal advisor to his presidential campaign, criticized the president for postponing talks.
"Given that literally millions of people are starving and displaced, and employment growth is declining, this is no time for the president to stop negotiations," he said. "His lack of leadership throughout the process was and is a major stumbling block."
Democrats and the Trump administration had struggled to agree what provisions a fifth aid package would include and how much the proposal would cost.
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