Trump has said he will work with Congress on a stimulus package if he wins the election. (File)
Washington:
US President Donald Trump on Tuesday called off talks on a new stimulus package to stimulate the Covid-ravaged US economy until the end of the election, plunging Wall Street and upsetting recent progress in long-delayed negotiations.
Tuesday afternoon’s tweet belied the optimism that had grown in recent days after House of Commons Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed talks on a follow-up to the law $ 2.2 trillion CARES adopted to mitigate the coronavirus slowdown.
Federal Reserve Chairman Jerome Powell on Tuesday again called for additional spending to help the United States weather a recession that caused tens of millions of layoffs and a historic contraction in annualized GDP in the second quarter.
But Trump accused the Democratic House leader of negotiating in bad faith and said he had asked Senate Majority Leader Mitch McConnell to focus instead on confirming his appointed judge to an opening to the Supreme Court.
“Nancy Pelosi is asking for $ 2.4 trillion to bail out Democratic states, mismanaged money, high crime, money that is in no way related to COVID-19,” Trump tweeted, citing an incorrect number for the Democrats’ latest proposal.
“We have made a very generous offer of $ 1.6 trillion and as usual it does not negotiate in good faith. I reject their request and look to the future of our country.”
The president’s tweet drew enthusiasm from Wall Street traders hoping for another cash injection from Congress, causing the Dow to fall 1.3% at the close.
Trump’s rival in the November election, Joe Biden attacked, claiming the president had “turned his back on all the workers whose jobs had not yet returned … and take care of their children.” “
Support needed
If he wins the election in which polls show him behind Biden, Trump added he would work with Congress to “pass a major stimulus bill that focuses on hard-working Americans and small businesses.” .
The president said he told McConnell to focus the Republican-controlled chamber on confirming Amy Coney Barrett to the Supreme Court seat freed last month by the death of Ruth Bader Ginsburg, which would give Tories a solid majority of six to three.
Earlier today, Powell told an economic conference that the U.S. recovery from Covid-19 would be “stronger and faster” with more government assistance to protect against the possibility of accelerating losses of jobs.
“Insufficient support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said.
“Even if political actions turn out to be more important than necessary, they will not be wasted.”
The CARES law passed when the pandemic struck in March included additional weekly payments of $ 600 to the unemployed as well as a small business loan and grant program.
However, both programs expired towards the end of July, and despite weeks of discussions, Pelosi, Mnuchin and other senior officials have remained very distant on how much to spend on another bill.
Any measure was to partially restore weekly payments to the unemployed and the small business assistance program.
It could also have given additional funds to the hard-hit airlines which laid off more than 30,000 people in early October after the funds budgeted under the CARES Act expired.
Trading on Hope
Art Hogan of National Securities told AFP that congressional hopes for additional spending played a key role in Wall Street’s recent gains, but “that door that was slashed open has closed.”
Labor Department data released last week showed the pace of hiring in September slowing from the previous month, with a disappointing 661,000 added jobs.
Meanwhile, data shows more than 800,000 people file new claims for unemployment benefits every week, still on top of the worst week of the 2008-2010 global financial crisis more than six months after the start of the business closures.
Traders were happy to see Mnuchin and Pelosi restart negotiations last week, Hogan said, but now they have been disappointed.
“It’s gone from a tailwind to a headwind for this market,” he said.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
