White House, Congress Weigh Next Stimulus With Virus Spreading

The White House and congressional Democrats are preparing for a fourth round of economic stimulus to get the U.S. through its coronavirus outbreak, even while they’re still arguing over the $2 trillion measure President Donald Trump signed Friday.

White House officials have compiled lists of requests from government agencies totaling roughly $600 billion, according to people familiar with the matter. The proposals include more state aid as well as financial assistance for mortage markets and the travel industries.

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House Speaker Nancy Pelosi told reporters on Monday that Democrats are “collecting information, taking inventory” on what might be needed in another round of stimulus. She also indicated states and local governments need more federal assistance, and said there could be further direct payments to everyday Americans.

And in an interview with the New York Times published on Monday, she indicated that another possible move was getting rid of the limit on state and local tax deductions, or SALT, that was part of the 2017 tax overhaul and affects California, Pelosi’s home state, and New York.

But a spokesman for Chuck Grassley, an Iowa Republican and chairman of the Senate Finance Committee, dismissed the idea as “a nonstarter.”

“Millionaires don’t need a new tax break as the federal government spends trillions of dollars to fight a pandemic.” said the spokesman, Michael Zona.

The U.S. outbreak isn’t expected to peak for another two weeks, according to projections by the Institute for Health Metrics and Evaluation at the University of Washington, and the president has urged Americans to continue “social distancing” practices that have devastated the economy until May.

Trump said early Monday that he’s considering hazard pay for health care professionals in a subsequent bill. He said Sunday that he’s assigned the Treasury and Labor secretaries to work on restoring a tax break for corporate restaurant spending that was repealed as part of his 2017 tax overhaul. Such a change stands to benefit the president’s company, the Trump Organization, which rents space to restaurants at many of its resort properties.

Many of the priorities Pelosi outlined for a fourth round on Monday were part of an alternative stimulus bill House Democrats proposed last week, but were rejected by Senate leaders in negotiations with Trump’s administration.

There’s bipartisan momentum building for another stimulus measure in Congress. Senator Ted Cruz, a Texas Republican, said Monday on Bloomberg Television that “if the crisis continues for substantially longer I have no doubt that the Congress will have to act again.”

Lingering Friction

But there’s lingering friction between Trump and Pelosi over the $2 trillion stimulus, which may shadow negotiations on a fourth round.

Democrats are angry that the president issued a statement Friday saying he’d gag a new inspector general intended to watchdog the distribution of $500 billion in aid to companies. Several White House aides were unhappy that Treasury Secretary Steven Mnuchin agreed to the oversight in the first place, according to two people familiar with the matter.

And Trump on Monday criticized Pelosi for seeking to win some Democratic priorities in the legislation he signed Friday, such as airline pollution controls.

“We want to change the voting laws, we want to change this, we want windmills all over the place to ruin everybody’s house and farm. We want to do all sorts of things,” Trump said on “Fox & Friends.” “They wanted things that were so ridiculous and had nothing to do with putting people that just essentially lost their jobs putting them back to work.”

Nonetheless, the federal government on Monday proceeded with plans to oversee virus-related spending. Glenn Fine, the acting inspector general at the Defense Department, will lead a nine-member Pandemic Response Accountability Committee established by the most recent law.

Inspector General Dispute

That’s separate from the special inspector general the law creates at the Treasury Department, who will be nominated by Trump and confirmed by the Senate. That office, to sit inside of Treasury, will have an operating budget of about $25 million for five years and submit quarterly reports to Congress.

Trump said in his signing statement he wouldn’t allow the new IG to tell Congress it’s been stonewalled for information by government agencies without his permission, an effort by the White House to curb the watchdog’s powers.

Representatives of the White House and the Treasury did not immediately respond to requests for comment on Monday night.

— With assistance by Erik Wasson, and Jennifer Jacobs

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