Pelosi says 'just about there' on US stimulus; Senate hurdle awaits

[WASHINGTON] US House Speaker Nancy Pelosi said she and Treasury Secretary Steven Mnuchin are "just about there" on resolving a key piece of a coronavirus relief package, even as there are significant differences still being negotiated.

Ms Pelosi said she and Mr Mnuchin were nearing agreement on how to allocate money for testing and tracing to safely reopen schools and the economy, a central element for the speaker in the talks.

She said they still haven't settled three of the main sticking points: Democrats' demands for aid to state and local governments, school funding and Republican insistence on a liability shield for employers.

Ms Pelosi and Mr Mnuchin were scheduled to talk by phone again Thursday afternoon as they rush to forge a compromise that would allow introduction of stimulus legislation in the House.

But as at 4 pm in Washington the call hadn't taken place. Ms Pelosi said they were waiting to hear from the heads of committees that would be drawing up a bill on some of the details "but that hasn't happened yet".

US stocks rose as banks rallied on a jump in Treasury yields, but investors remained fixated on the talks in Washington.

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Markets tumbled earlier this month when President Donald Trump pulled his team out of the talks - underscoring why neither side will want to be seen walking away from the table amid the final countdown to Election Day. The risk of a selloff gives both teams an incentive to keep going, even if a deal remains elusive.

"We continue to be engaged in negotiations, and I am hopeful we will be able to reach an agreement," Ms Pelosi said at a news conference Thursday.

She said earlier on MSNBC that it "would be my hope" to get fiscal stimulus finished by the Nov 3 election, but she pointed to Senate Majority Leader Mitch McConnell's publicly expressed opposition to the spending levels under discussion.

Senate Republicans remain the ultimate roadblock to enacting a roughly US$2 trillion deal being negotiated by Ms Pelosi and Mr Mnuchin.

Mr McConnell has made no promises on when the Senate might take up any compromise agreement, and some senior GOP lawmakers expressed skepticism whether the chamber would vote on one, even after the election.

Senate Appropriations chairman Richard Shelby of Alabama said he's among Republicans in the chamber who have been frustrated by the lack of details they've gotten from Mr Mnuchin about the talks.

"A lot of the top line he is talking about is big - but we haven't seen anything," Mr Shelby said, expressing doubt that a stimulus could be finished before the election.

"I think it's about two minutes to midnight, and we're not going to pass anything until we see the particulars."

Funding for state and local governments, a key issue dividing Democrats and Republicans going back to the summer, was singled out by both sides as a remaining challenge.

Mr Trump and his allies have characterised large-scale aid to local authorities as an effort to bail out poorly run, Democratic states.

"There are still significant policy differences between the two teams," White House National Economic Adviser Larry Kudlow said on Fox Business.

The Democratic stimulus bill "needs to be amended significantly more", he said. "The clock is ticking."

Mr Trump, and other Republicans, have accused Democrats of not really being interested in getting a bill passed.

White House Chief of Staff Mark Meadows Wednesday complained that it's the administration that's "advancing this negotiation further and further to Nancy Pelosi's side of the ledger". The speaker has made only "small" concessions, he said on Fox News.

Senate Democratic leader Chuck Schumer on Wednesday put the onus on Republicans for the lack of an agreement, highlighting reports that Mr McConnell had advised the White House to avoid a pre-Nov 3 deal, given the likelihood of division among Republicans on any vote in the Senate.

"Ask the American people," Mr Schumer said. "They know who to blame."

GOP senators continued to raise concerns about both the size of the deal under negotiation - US$1.9 trillion, according to Mr Meadows - and policy issues in the language.

They also expressed skepticism about a vote on a stimulus deal after the election, which Ms Pelosi has floated as a possibility.

Missouri Republican Roy Blunt, a member of Mr McConnell's leadership team, said: "If we're going to do it this year, I think it's now or never."

Republican John Thune, the party's No 2 leader in the Senate, indicated there wouldn't be enough Republican votes to assure passage of a stimulus package as large as Ms Pelosi is seeking.

Republican Senator Chuck Grassley of Iowa told reporters: "It's pretty hard to predict because I think that what happens in the presidential election will determine that more than anything we know right now."

BLOOMBERG