The Trump administration is stepping back from negotiations on a new stimulus package and leaving it to Senate Majority Leader Mitch McConnell to revive long-stalled talks with House Speaker Nancy Pelosi, according to two people familiar with the matter.

While the White House probably would consult with GOP lawmakers on details of a Covid-19 relief bill, it’s now unlikely to take the lead on talks, according to the people, who spoke on condition of anonymity to discuss internal deliberations. The White House would only take over if negotiations have to be restarted completely, the people said.

McConnell’s position on stimulus has been even farther from the Democrats’ $2.4 trillion proposal than that of Treasury Secretary Steven Mnuchin, who had been lead Republican negotiator, leaving low odds of a breakthrough before January. Pelosi and Senate Democratic leader Chuck Schumer reiterated their call for a big package Thursday.

“There’s not been any discussion yet between McConnell and Pelosi, but McConnell is not going to rely on Mnuchin any more to do the dealing,” Senate Finance Committee Chairman Chuck Grassley, an Iowa Republican, said. “I think he is intending to take it over and to try to get something going and get it done.”

Trump’s Attention
President Donald Trump had committed to pursuing a large-scale stimulus after the election, even saying he would approve a $2 trillion bill, but has since focused on attempting to overturn President-elect Joe Biden’s victories in battleground states.

Prospects for a continuing stalemate threaten to undercut an already weakening U.S. economic recovery, as the country’s coronavirus case count surges to daily records.

Federal Reserve Chair Jerome Powell said earlier this month that fiscal stimulus is “absolutely essential” to the U.S. economic recovery. He has also said that even if spending proved more than necessary, it “will not go to waste.”

Mnuchin and Pelosi were at an impasse before Election Day, with the administration proposing about $1.9 trillion in spending, and Democrats at $2.4 trillion. A welter of policy issues, from aid to state and local governments to a Republican push for liability protections for businesses, had also prevented a deal.

Smaller Bill
McConnell has continued to insist on a much smaller package of about $500 billion, pointing to signs of a continuing recovery including a slide in the unemployment rate. He has also cited encouraging news on a coronavirus vaccine.

“The level at which the economy is improving further underscores that we need to do something at about the amount that we put on the floor in September and October,” McConnell told reporters. Democratic leaders “still are looking at something dramatically larger. That’s not a place I think we’re willing to go,” he said.

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