(Bloomberg) — House Speaker Nancy Pelosi said she hopes the current selloff in U.S. stocks will prompt President Donald Trump to agree to Democratic demands in stalled stimulus talks and end a three-month stalemate.
“What the president cares a lot about is the stock market,” Pelosi said on MSNBC. “As he sees the market react to the spread of the virus and sees the market react to the fact that we do not have an agreement — which could inject resources into the economy — hopefully now he will come to the table in a serious way.”
Trump has blamed Pelosi for the impasse, saying she is holding up an agreement to provide aid to Democrat-run states and cities.
After shrugging off the impasse in Washington over a relief package during summer, investors began showing signs of concern in September, when the S&P 500 Index logged its first monthly decline since a rout in March when the pandemic prompted lockdowns. Equity indexes tumbled this week as it became clear that no pre-election deal is in the offing and coronavirus infections are rising again. The S&P 500 was down 3.2% as of 3:50 p.m. on Wednesday, heading for its worst day in almost two months.
Pelosi and Treasury Secretary Steven Mnuchin last spoke Monday and were unable to resolve an impasse over language in a proposed bill directing the administration to develop a comprehensive anti-Covid-19 virus strategy. The two sides differed on how $75 billion in testing and tracing funds can be used.
Gap Remains
That sticking point is one of several, including Democratic demands for aid for cash-strapped state and local governments and Republican demands for liability protections for companies from Covid-19 related lawsuits.
Trump increased his offer in the talks to $1.9 trillion from $1 trillion over the course of October, closer to Pelosi’s demand of $2.4 trillion.
“This election is a choice between a Trump super recovery or a Biden depression. You’re going to have a depression. Your 401(k)s, down the tubes. Look how great our stock market — had a little blip yesterday because Nancy Pelosi will not approve stimulus, that’s all,” Trump said at a Michigan rally on Tuesday, before the latest turmoil in the stock market.
Pelosi said that a deal hinges Trump on getting Senate Republicans on board because she is not willing to face a new round of negotiations with them if Democrats come to terms with the White House. The Senate GOP has so far backed a $500 billion offer and Majority Leader Mitch McConnell urged the White House not to agree to a larger bill before the election.
(Updates market move in fourth paragraph and additional context in final two paragraphs.)
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