With Covid Relief Talks Stalled, Mnuchin Calls for Bipartisan Deal

Treasury Secretary Steven Mnuchin testifies before the House Select Subcommittee on the Coronavirus Crisis during a hybrid hearing Tuesday. (Graeme Jennings/Pool via AP)

WASHINGTON (CN) — Treasury Secretary Steve Mnuchin urged lawmakers on Tuesday to quickly strike a bipartisan deal on sweeping relief for Americans hit hard by the Covid-19 pandemic, the same day the Trump administration rolled out a temporary order halting evictions and foreclosures through the end of this year.

The House Select Subcommittee on the Coronavirus Crisis met to hear with testimony from Mnuchin on the White House’s response to the economic crisis caused by the Covid-19 crisis that has throttled the U.S. for seven months. As of Tuesday, the respiratory disease caused by the novel coronavirus has killed over 183,000 Americans and infected more than 6 million.

It was Mnuchin’s fifth appearance before Congress since the pandemic began. His comments were at times eager and ambitious, given the vast array of highly contentious disagreements between Democrats and Republicans on what the cost should be for the next round of relief.

Congresswoman Maxine Waters, a California Democrat, elicited a vow from Mnuchin to reignite talks with House Speaker Nancy Pelosi while pressing him on whether he fully understood the urgency felt by millions of unemployed Americans left waiting on Congress to act.

“Can I tell her that you suggested I call her right after the hearing?” Mnuchin asked.

Waters agreed.

“Done,” Mnuchin said. 

After talks between Democratic leaders – Pelosi and Senate Minority Leader Chuck Schumer – and Republican negotiators – Mnuchin and White House Chief of Staff Mark Meadows – fell apart in late July, President Donald Trump issued a series of executive orders meant to serve as a stopgap. One of the orders boosted unemployment benefits, albeit temporarily and to the tune of just $300, half of what Democrats proposed for extra weekly unemployment insurance.

Those funds are drawn out of the Federal Emergency Management Agency. So far, over two dozen states have signed up for the program but less than 10 have been able to collect and disperse the funds. FEMA did not immediately return request for comment Tuesday.

A phone call between Mnuchin, Meadows and Pelosi last week ended with a compromise from Democrats to drop their proposed $3.4 trillion price tag in the House-passed Heroes Act relief package down to $2.2 trillion.

Republicans in late July opened their negotiations for a new package with a proposed $1.1 trillion “skinny relief” deal, much to Democrats’ chagrin. A major sticking point has been a raging dispute over funding for the U.S. Postal Service. While Senate Republicans offered $10 billion for the Postal Service in their deal, Democrats called for twice that amount.

Proposed operational shakeups and cutbacks by Postmaster General Louis DeJoy only solidified Democrats’ calls for a $25 billion infusion to the agency ahead of this year’s presidential election, when it is expected to handle huge numbers of mail-in ballots  because of the pandemic.

Though the House passed a standalone bill approving $25 billion for the Postal Service late last month, that legislation was dead on arrival.

But other standalone legislation may help dealmakers, Mnuchin said Tuesday. In particular, he called for Congress to draft legislation that would repurpose $130 billion still remaining in the Paycheck Protection Program created for cash-strapped business owners.

Appearing to signal willingness from Republicans to negotiate, Mnuchin said of the possible repurposing: “I believe this legislation would pass with overwhelming support in the Senate and I would encourage the House to move forward with it.”

The Treasury secretary also celebrated a three-month gain of 9 million jobs, suggesting that 41% of the jobs that were lost due to the pandemic have already been recovered. While his confidence was palpable, a Morning Consult poll published Tuesday depicted less optimism from America’s labor force.

More Americans are returning to work amid the Covid-19 pandemic but cynicism is high, with nearly a quarter of working adults saying they expect to see further losses to their income in the next four weeks. (Graphic courtesy of Morning Consult)

Despite more people returning to work, those still unemployed are cynical – 50% said they do not anticipate being able to cover basic expenses with unemployment insurance alone. Further, 21% of working adults said they expect to see a loss in their income in the next four weeks.

According to the Bureau of Labor Statistics, unemployment at the end of July hovered at 10.2%.

“Some jobs lost at the beginning of the pandemic have returned and certain businesses have reopened. That’s a good thing,” said Committee Chairman Jim Clyburn, a South Carolina Democrat. “This administration claims this partial rebound means we are guaranteed a V-shaped recovery where we go back to full strength quickly, but the evidence doesn’t bear that out.”

One million Americans have filed new unemployment claims every week, meaning the economy is in “serious trouble,” Clyburn added, noting that “only the wealthy are bouncing back to prosperity while lower income families continue to suffer.”

Some families soon may get a little relief from the threat of impending evictions or foreclosures. On the heels of Mnuchin’s appearance before the coronavirus committee, the White House announced a directive establishing a temporary halt on such removals through Dec. 31, 2020.

The CARES Act covered only federally backed rental units but the new order – announced in conjunction with the Centers for Disease Control and Prevention and the Health and Human Services Department – covers “any rental unit in the United States so long as the tenant or homeowner meets the requirement,” an official from the CDC said in a phone call Tuesday.

According to the order, a “landlord, owner or other person with legal right to pursue eviction shall not evict any covered person from any residential property for the remainder of 2020 for failure to pay rent.”

Critically, the definition of a “covered person” includes any “persons that receive or would have been eligible for an economic impact payment or based on 2020 income, those with $99,000 in income or less or couples filing jointly of $198,000 or less.”

Further, a senior HHS official said on a call Tuesday that “all persons seeking eviction protection must show they have taken best efforts possible to seek government assistance to make their rental payments.”

“A renter who cannot pay his or her full rent should pay an amount that is not unduly burdensome. It’s not an invitation to stop paying rent,” the senior official said.

Applicants must also demonstrate that they will become homeless or forced to move into congregant housing settings if were to be evicted. And anyone who benefits from this assistance is still obligated to pay accrued rent in accordance with their lease or contract, allowing landlords with noncompliant tenants to retain their right to pursue evictions later.

If a person files for relief and is still evicted in the meantime, however, how their personal record and credit report will reflect the eviction was a question officials were unprepared to answer Tuesday. An eviction on a person’s record can make renting or obtaining a mortgage exponentially more difficult.

Another senior administration official said that under the order, any landlord who refuses to honor it may be held criminally liable.

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