Mnuchin says coronavirus relief deal unlikely before U.S. election

WASHINGTON (Reuters) – U.S. Treasury Secretary Steve Mnuchin on Wednesday said he and House of Representatives Speaker Nancy Pelosi were “far apart” on some details of another coronavirus relief package, and that an agreement would be hard to reach before the Nov. 3 election.

The White House as well as Democrats and Republicans in Congress are under mounting pressure to hammer out a bipartisan fiscal stimulus deal to help Americans weather a pandemic that has killed nearly 216,000 people and damaged the economy.

But the two sides are divided over several priorities. Meanwhile Senate Republicans are resisting as too expensive a $1.8 trillion offer that Mnuchin proposed last week. Pelosi says it’s insufficient and is calling for a $2.2 trillion aid package.

Mnuchin, who spoke with the California Democrat on Wednesday, acknowledged the two were still “far apart” on some issues and said politics were “part of the reality.”

“I’d say at this point, getting something done before the election and executing on that would be difficult just given where we are and the level of detail, but we’re going to try to continue to work through these issues,” Mnuchin said at the Milken Institute Global Conference in Washington.

Major U.S. stock indexes added to losses after Mnuchin’s comments.

Drew Hammill, deputy chief of staff for Pelosi, described the talks on Wednesday as productive, but added that the Trump administration’s lack of a national strategic testing plan remained a “major area of disagreement.”

“In response to proposals sent over the weekend, the two spent time seeking clarification on language, which was productive,” Hammill said on Twitter. He added that Pelosi and Mnuchin spoke for about an hour.

They will speak again on Thursday and staff would continue to “exchange paper,” Hammill said.

Mnuchin said he did not agree with Pelosi’s “all-or-nothing” approach to a deal. He said there’s some $300 billion unspent from previous coronavirus aid packages that could be “repurposed” by Congress immediately.

On Tuesday, Senate Majority Leader Mitch McConnell, the top Republican in Congress, announced that the Senate would vote next week on a slimmed down $500 billion COVID-19 bill. Democrats blocked a similar proposal last month.

Congress passed about $3 trillion in coronavirus aid, including help for the unemployed, in March.

(Reporting by Tim Ahmann, Susan Cornwell, David Morgan and Doina Chiacu; Editing by Chizu Nomiyama and Paul Simao)

Trump signs coronavirus relief orders after talks with Congress break down

By Jeff Mason

BEDMINSTER, N.J. (Reuters) – President Donald Trump signed executive orders on Saturday partly restoring enhanced unemployment payments to the tens of millions of Americans who lost jobs in the coronavirus pandemic, as the United States marked a grim milestone of 5 million cases.

Negotiations broke down this week between the White House and top Democrats in Congress over how best to help Americans cope with the heavy human and economic toll of the crisis, which has killed more than 160,000 people across the country.

Trump said the orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis. Some of the measures were likely to face legal challenges, as the U.S. Constitution gives Congress authority over federal spending.

“This is the money they need, this is the money they want, this gives them an incentive to go back to work,” the Republican president said of the lower payments. He said 25% of it would be paid by states, whose budgets have been hard hit by the crisis.

Republicans have argued that higher payments were a disincentive for unemployed Americans to try to return to work, though economists, including Federal Reserve officials, disputed that assertion.

Trump’s move to take relief measures out of the hands of Congress drew immediate criticism from some Democrats.

“Donald Trump is trying to distract from his failure to extend the $600 federal boost for 30 million unemployed workers by issuing illegal executive orders,” said Senator Ron Wyden, the top Democrat on the Senate Finance Committee. “This scheme is a classic Donald Trump con: playacting at leadership while robbing people of the support they desperately need.”

The Democratic-majority House of Representatives passed a coronavirus support package in May which the Republican-led Senate ignored.

Democratic presidential candidate Joe Biden called the orders a “series of half-baked measures” and accused Trump of putting Social Security “at grave risk” by delaying the collection of payroll taxes that pay for the program.

Trump also said he was suspending collection of payroll taxes, which pay for Social Security and other federal programs, an idea that he has repeatedly raised but has been rejected by both parties in Congress. He said the suspension would apply to people making less than $100,000 per year.

His orders would also stop evictions from rental housing that has federal financial backing and extend zero percent interest on federally financed student loans.

Trump initially played down the disease’s threat and has drawn criticism for inconsistent messages on public health steps such as social distancing and masks.

He spoke to reporters on Saturday at his New Jersey golf club, in a room that featured a crowd of cheering supporters.


Nearly two weeks of talks between White House officials and congressional Democrats ended on Friday with the two sides still about $2 trillion apart.

House Speaker Nancy Pelosi had pushed to extend the enhanced unemployment payments, which expired at the end of July, at the previous rate of $600 as well as to provide more financial support for city and state governments battered by the crisis.

Pelosi and Senate Minority Leader Chuck Schumer on Friday offered to reduce the $3.4 trillion coronavirus aid package that the House passed in May by nearly a third if Republicans would agree to more than double their $1 trillion counteroffer.

White House negotiators Treasury Secretary Steven Mnuchin and Chief of Staff Mark Meadows rejected the offer.

The $1 trillion package that Senate Majority Leader Mitch McConnell unveiled late last month ran into immediate opposition from his own party, with as many as 20 of the Senate’s 53 Republicans expected to oppose it.

Trump did not rule out a return to negotiations with Congress.

“I’m not saying they’re not going to come back and negotiate,” he said on Saturday. “Hopefully, we can do something with them at a later date.”

Democrats have already warned that such executive orders are legally dubious and would likely be challenged in court, but a court fight could take months.

Trump has managed to sidestep Congress on spending before, declaring a national emergency on the U.S.-Mexico border to shift billions of dollars from the defense budget to pay for a wall he promised during his 2016 election campaign.

Congress passed legislation to stop him, but there were too few votes in the Republican-controlled Senate to override his veto – a scenario that would likely play out again with less than 90 days to go before the Nov. 3 presidential election.

(Reporting by Jeff Mason, additional reporting by Raphael Satter, Brad Brooks, and Rich McKay; Writing by Scott Malone; Editing by Diane Craft, Daniel Wallis, Jonathan Oatis and Sonya Hepinstall)

U.S. Treasury to sell $112 billion next week, continue shift to longer-dated debt

By Ross Kerber

BOSTON (Reuters) – The U.S. Treasury Department said on Wednesday it will sell $112 billion next week in notes and bonds and that it plans to continue to shift more of its funding to longer-dated debt in coming quarters, as it finances measures to offset the impact of the COVID-19 epidemic.

The Treasury said it expects its debt needs to moderate but remain elevated, after borrowing a staggering $2.753 trillion in the second quarter.

“Treasury continues to face unprecedented borrowing needs as a result of the federal response to COVID-19,” Brian Smith, Treasury’s deputy assistant secretary for federal finance, said on a conference call.

The Treasury will sell $48 billion in three-year notes, $38 billion in 10-year notes and $26 billion in 30-year bonds next week as part of its quarterly refunding.

It said on Monday that it plans to borrow $947 billion in the third quarter, about $270 billion more than it previously estimated for the July-September period.

The federal agency will use “long-term issuance as a prudent means of managing its maturity profile and limiting potential future issuance volatility,” Smith said in a release.

As Treasury increases auction sizes, it will have larger increases in 7-year, 10-year, 20-year and 30-year notes and bonds, he said.

Treasury has been raising extra money to fund trillions of dollars in coronavirus-related economic aid allocated by Washington. As of Tuesday, White House negotiators were trying to reach a deal with congressional Democrats to extend relief measures including unemployment benefits, liability protections for businesses and a moratorium on evictions.

Borrowing has spiked far above the quarterly record set during the 2008 financial crisis.

A declining economic outlook has driven down U.S Treasury yields across the curve to record or near-record lows, helping raise equity prices and lower borrowing costs.

(Additional reporting by Karen Brettell in New York; Editing by Paul Simao)

Not in the room where it happens: U.S. Senate’s McConnell opts out of coronavirus talks

By Richard Cowan

WASHINGTON (Reuters) – As coronavirus aid negotiations between top White House officials and Democratic leaders in the U.S. Congress bogged down over the past week, the question reverberating through near-empty Capitol hallways has been “Where’s Mitch?”

That’s Mitch McConnell, the Senate majority leader with the reputation of being a legislative mastermind and a tough, wily deal-maker.

McConnell, a Republican like President Donald Trump, said on Tuesday he is deliberately hanging back as Congress’s top Democrats and White House negotiators work out a deal to help American families stay afloat during severe economic times caused by the coronavirus pandemic.

If they reach a deal, he said, it would be “something I’m prepared to support even if I have some problems with certain parts of it.”

Unlike in past showdowns over spending and borrowing authority bills, McConnell would not bring a strong hand to negotiations – his party’s 53-member majority in the 100-seat Senate is deeply fractured over his $1 trillion package, with dissenters expected no matter what emerges from the talks.

The betting is that Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows could have an easier time without McConnell in the room as they try to craft a bill that will need Democratic support for passage anyway.

An arm’s-length appearance could also help deflect fallout if this legislative battle ends poorly, something that could be on his mind as he seeks to retain his seat in congressional and presidential elections in November.

That’s not to say that McConnell has gone AWOL. While he may not be in the sessions, he is in close touch with the White House behind the scenes.

“He’s definitely giving guidance,” Senator Bill Cassidy told Reuters on Tuesday. “Clearly Mnuchin and his team are the ones negotiating directly. But I certainly get a sense that they’re going in there knowing that which McConnell will accept and that which he will not.”

Senator Mike Rounds called McConnell’s approach pragmatic.

“In the past he’s made it clear that unless you have House Democrats on board and you have the White House on board, you’re really not going to get to a conclusion,” Rounds told reporters.


Unlike the wall of opposition Republicans erected against former President Barack Obama’s landmark healthcare law, or the party’s lockstep backing for tax cuts, many Republicans are leery of spending more to battle COVID-19 — despite the virus’ impact on Americans’ lives and America’s economy.

McConnell’s pledge to support a deal, even as he keeps a low profile, could anger conservative Republican senators who have questioned whether Washington should do anything beyond the $3 trillion it already has passed to battle the fallout from the pandemic, which has killed more than 157,000 nationwide.

“We do have divisions,” McConnell acknowledged in his understated way.

In contrast, Democrats led by House of Representatives Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer have presented a unified front around a $3 trillion proposal passed by the House in May.

On Tuesday, Schumer suggested McConnell had lost control of his caucus: “He’s not in the room negotiating because the Republicans can’t even articulate a coherent position.”

The Senate is being pressured from many sides to act on what could be the last piece of major legislation before election day on Nov. 3.

Trump, who has been trailing in polls versus presumptive Democratic nominee Joe Biden, repeatedly has called for steps to extend unemployment insurance or help those facing eviction from their homes, which Democrats have been pressing for months.

The U.S. Chamber of Commerce on Tuesday also urged action to protect businesses from liability lawsuits during the pandemic — McConnell’s main priority.

Former Republican House Speaker John Boehner always had a ready answer when he found himself, like McConnell now, in a tight spot.

“A leader without followers is simply a man taking a walk,” he would say during raucous times during his tenure.

Now, McConnell may have found himself in Boehner’s shoes.

(Reporting by Richard Cowan, David Morgan and Patricia Zengerle; Editing by Scott Malone and Sonya Hepinstall)

FCC proposes extra funds to restore Puerto Rico comms

FILE PHOTO: Ajit Pai, Chairman of the Federal Communications Commission, testifies before a Senate Appropriations Financial Services and General Government Subcommittee on Capitol Hill in Washington, U.S., June 20, 2017. REUTERS/Aaron P. Bernstein

By David Shepardson

WASHINGTON (Reuters) – The chairman of the U.S. telecoms regulator on Tuesday proposed making available up to $77 million to fund repairs of communication networks and restore services in storm-lashed Puerto Rico and the U.S. Virgin Islands.

As of Monday – almost two weeks after Hurricane Maria walloped Puerto Rico, knocking out its electric grid – nearly 90 percent of cell phone sites on the island remained out of service, according to the U.S. Federal Communications Commission.

Almost 70 percent of cell towers remained out in the U.S. Virgin Islands, with little progress made over the last week.

FCC chairman Ajit Pai said on Tuesday that he wants carriers to be advanced money from the U.S. government’s Universal Service Fund “to expedite repair and restoration efforts.”

The fund provides federal subsidies to companies to make communications services more accessible and affordable in places where the cost is high.

Pai said he wants the FCC to approve giving carriers “up to seven months of their normal federal support in advance – right now, in a lump sum – to help them repair their networks and restore service to consumers.”

The FCC’s five-member board is not due to meet to consider the chairman’s proposal until Oct. 24, although it could meet earlier if all the commissioners agree.

In a statement, network provider AT&T Inc <T.N> praised the FCC efforts at rebuilding communications infrastructure.

The company will “closely assess the details of the chairman’s proposal as we continue with the recovery and restoration of our network and facilities,” it said.

Wireless companies have been setting up temporary cell sites and bringing in equipment but still face hurdles with widespread power outages.

Much of the landline network was also badly damaged.


(Reporting by David Shepardson; Editing by Chizu Nomiyama and Rosalba O’Brien)


Texas gives Houston $50 million for Hurricane Harvey costs

Texas gives Houston $50 million for Hurricane Harvey costs

(Reuters) – Texas Governor Greg Abbott on Friday gave $50 million to Houston to help cover costs related to Hurricane Harvey, a move the mayor said will allow the city to avoid a temporary property tax hike that was up for a city council vote in October.

Mayor Sylvester Turner, who accepted the money from the Republican governor at a city hall press conference, said he will pull his proposal for a one-year tax increase to cover the city’s share of debris removal expenses and for insurance-related payments.

Parts of Houston suffered severe wind and flood damage after Hurricane Harvey made landfall on Aug. 25. It was the strongest hurricane to hit Texas in more than 50 years.

Earlier this week, Abbott rejected Turner’s request for the state to immediately tap its $10 billion rainy day fund to aid its largest city.

On Friday, the governor said he had the flexibility to withdraw $50 million from a state disaster relief fund for Houston.

“This looked like the best solution at this point,” Abbott told reporters.

He added that once the state gets a handle on total hurricane expenses, the Texas legislature will consider tapping into the rainy day fund when its next regular session begins in January 2019 or sooner in a special session.

(Reporting by Karen Pierog; Editing by Sandra Maler)