President Trump said on Oct. 6 that he rejected the Democratic Party’s economic stimulus proposal and ordered his representatives to halt negotiations until the presidential election is over. Trump said on social media that “we offered a very generous $1.6 trillion package” but that Pelosi was not sincere in negotiating. Investors sold stocks after the news broke. The three major U.S. stock indexes jumped on the news. The Dow Jones fell more than 600 points in the minutes after the news was announced, going from up to down in the short term, down about 1.3 percent. Biden criticized Trump for doing this as a betrayal of America’s trust.
Federal Reserve Chairman Jerome Powell had just reiterated earlier on Tuesday his call for the U.S. government to take more economic stimulus measures to support the most vulnerable people in America.
The current U.S. stimulus talks have been at an impasse for months. Powell said the risk of Congress imposing too much stimulus is much lower than the risk of not stimulating enough. Powell argued that lawmakers should take further action even as government spending increases the already high federal budget.
U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin negotiated again on Tuesday for a new stimulus package.
Pelosi called on Republicans to support the Democratic version of the stimulus bill passed by the House of Representatives last week. However, there is still a huge gap between the $2.2 trillion proposed by the Democrats and the $1.6 trillion proposal backed by the White House.
In a statement Tuesday, Pelosi said, “Powell’s warning could not have been clearer: strong action must be taken immediately to avoid economic catastrophe as a result of the epidemic. It’s long past time for Republicans to join us in voting to pass a bill that will meet the needs of the American people.”
The Democrats passed a $2.2 trillion epidemic relief package last week. The plan includes restoring $600 in additional weekly unemployment benefits, sending $1,200 in direct checks to most Americans, providing $436 billion in direct aid to state and local governments, and authorizing a second round of Paycheck Protection Program (PPP) loans to small businesses.
The $1.6 trillion plan previously proposed by the Republicans included $400 per week in additional unemployment benefits, $250 billion in state and local government relief, and corporate liability protection.
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