Washington, Oct 6 (efe-epa).- President Donald Trump called a halt Tuesday to negotiations with Democrats in Congress on another stimulus package to address the economic harm from the coronavirus pandemic, which has claimed more than 210,000 lives in the United States.
“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,” the president tweeted, just hours after Federal Reserve Chair Jerome Powell urged lawmakers to do more to boost the recovery.
Traders at the New York Stock Exchange reacted negatively to Trump’s move and both the Dow Jones Index and S&P 500 had their worst sessions since Sept. 23. The Dow tumbled 375.88 points, or 1.34 percent, in the final hour of trading, while the S&P retreated 47.68 points, or 1.40 percent.
The president commented after a conference call with Senate Majority Leader Mitch McConnell, the leader of the Republican minority in the House of Representatives Kevin McCarthy, and Treasury Secretary Steve Mnuchin, the administration’s lead negotiator.
Trump’s decision to pull the plug on the talks was a stunning reversal, coming just three days after this tweet from the president: “OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE. Thank you!”
Mnuchin had been in discussions with the nation’s top Democrat, House Speaker Nancy Pelosi, aimed at bridging the gap between the $2.2 trillion bill passed by the House and the administration’s initial proposal for $1.6 trillion in new spending.
Pelosi, who was conferring with members of her caucus when she learned of Trump’s tweet shutting down the negotiations, was quick to respond.
“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,” the California lawmaker said.
“Walking away from coronavirus talks demonstrates that President Trump is unwilling to crush the virus,” she said in a statement, blasting the administration for “rejecting the urgent warnings of Fed Chairman Powell today.”
In remarks to the virtual annual meeting of the National Association for Business Economics, Powell gave his view on the health of the recovery from “the sharpest downturn on record,” brought on by the pandemic.
While noting that unemployment, which reached 14.7 percent in April, has already fallen back to 7.9 percent, he said that rebound remains fragile.
“The expansion is still far from complete. 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 for households and businesses,” the Fed chair said.
“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,” he said.
“Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” Powell told the group. EFE