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McConnell and Pelosi expect a coronavirus relief deal — but huge differences remain

The two most powerful lawmakers in Washington told CNBC on Thursday they believe Congress will strike a coronavirus relief agreement but said major differences must be resolved during an increasingly bitter process.

“Exactly when that deal comes together I can’t tell you, but I think it will at some point in the near future,” Republican Senate Majority Leader Mitch McConnell said on “Squawk on the Street.”

Speaking to CNBC shortly after McConnell, House Speaker Nancy Pelosi, D-Calif., also said she expects an agreement to boost an economy and health-care system devastated by the pandemic. 

Negotiators have struggled to craft an aid bill that could pass both chambers of Congress as Democrats and Republicans try to hash out a bevy of disputes. The sides have to decide how to extend extra federal unemployment insurance, continue a moratorium on evictions from federally backed housing, help schools educate students safely and offer relief to cash-strapped state and local governments. 

Pelosi and Senate Minority Leader Chuck Schumer have repeatedly cited progress after a series of meetings with Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows. But they have failed to reach an accord. The four officials plan to meet again at 5 p.m. ET on Thursday, NBC News reported. 

“Will we find a solution? We will,” Pelosi told CNBC. “Will we have an agreement? We will.” 

But illustrating the election-year tensions at work as officials slog toward a bill, Pelosi took a shot at Republicans and their priorities. Asked why she could not work with the GOP by explaining that legislation would help people of color and other Americans who face structural barriers, Pelosi responded, “Perhaps you mistook [Republicans] for somebody who gives a damn.” 

Democrats and the White House have apparently started to yield ground on issues including unemployment insurance and funding for the U.S. Postal Service. They still appear far from any consensus as millions of people face the prospect of slipping into poverty.

On Wednesday, Meadows said the sides “continue to be trillions of dollars apart” on legislation. Last week, the GOP proposed a roughly $1 trillion relief plan. Republicans took a more narrow approach than House Democrats, who passed a $3 trillion package in May. 

Meadows has indicated the Trump administration could pull out of talks and try to address jobless benefits and the eviction moratorium by executive action if the sides fail to reach an agreement by Friday. Schumer insisted Wednesday that Democrats “are not walking away” from talks. 

It is unclear what President Donald  Trump can accomplish through unilateral action, as he needs Congress to approve funding for programs. Even so, Pelosi said she hopes Trump takes steps himself to stop evictions. 

“He can extend the moratorium, and I hope that he does,” she said.

But she noted that a moratorium is only so effective if people lack the money to pay their rent. Democrats have pushed for rental and mortgage assistance funds in the bill. Republicans did not include money for housing payment aid in their plan. 

Democrats have also pushed for nearly $1 trillion more in aid for states and municipalities and strengthened Supplemental Nutrition Assistance Program benefits to be included in the package. 

McConnell told CNBC that “the argument is over how much [aid] is appropriate at this particular juncture.” 

The Senate Republican leader has previously said he is “prepared to support” whatever deal Democrats and the Trump administration strike, even if he does not like parts of it. McConnell will likely have to rely on Democrats and the least conservative Republicans to pass a bill in the Senate, as many GOP senators oppose even the $1 trillion bill. 

“I’ve got members … who think we’ve done enough, but that’s not my view,” he told CNBC. 

Lawmakers face pressure to approve more relief after a $600 per week enhanced federal unemployment benefit expired at the end of July. Millions of people who lost jobs because of the pandemic have relied on the payments and now face a sudden and sharp loss of income. 

Democrats want to extend the extra unemployment benefits at $600 a week into next year. In their legislation, Senate Republicans called to continue the payments at $200 per week through September, then set the benefit at 70% wage replacement. 

The White House offered Democrats a short-term extension of the enhanced insurance. Pelosi and Schumer rejected it. 

New economic data released Thursday show the extent to which people still rely on the benefits in a floundering economy. Another 1.2 million people filed initial jobless claims last week. Continuing claims, or people getting benefits for two straight weeks, came in at 16.1 million. 

Democrats have repeatedly accused Republicans of moving too slowly to offer more relief during the pandemic. The GOP did not release its offer countering the Democratic bill until last week, giving the parties only a few days to strike an agreement before financial lifelines expired. 

He argued Congress needed to wait to see how the U.S. recovered after lawmakers passed more than $2.5 trillion in aid earlier this year. The economy appeared to lose momentum in July as Covid-19 outbreaks around the country forced states to pause or roll back their economic reopening. 

McConnell said it is “not too late” to pass more aid. 

“This is the perfect time to look at it,” he said. 

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