What to Know in Washington: Stimulus Talks Stuck in $1T Ditch

There’s little chance of agreement on a new federal coronavirus relief plan without a compromise on the roughly $1 trillion in aid to beleaguered state and local governments that Democrats demand and the White House opposes.

Democrats have offered to cut their original stimulus proposal totaling $3.5 trillion by roughly one third, but insist on keeping help for states, cities, and other municipalities. President Donald Trump’s negotiators, in addition to rejecting the Democrats’ topline number, have offered to put in no more than $150 billion for local assistance.

Negotiations are at a standstill heading into two weeks in which the Democratic Party then the Republican Party hold their respective presidential nominating conventions.

Senate Majority Leader Mitch McConnell (R-Ky.) said yesterday the Senate is in recess and will not hold votes until Sept. 8 — although senators, like members of the House, can be called back on 24 hours’ notice if a stimulus deal has been made.

“I’m still hoping we’ll have some kind of bipartisan agreement here, some time in the coming weeks,” McConnell said as he left the Senate floor.

The chasm between the two sides, and potential for the impasse to stretch well into September, has governors and mayors from both parties on the edge.

Although there are other areas of disagreement — among them, McConnell’s plan to shield employers from liability for Covid-19 infections, and Speaker Nancy Pelosi’s (D-Calif.) drive to bolster the U.S. Postal Service — the question of state aid may be the biggest stumbling block.

Senate Republicans included no aid for local governments in their initial proposal for the next stimulus bill released at the end of July. It did include $105 billion for schools, which are mostly funded by states and cities, and $16 billion in grants to states for coronavirus testing, contact tracing and surveillance. Read more from Billy House.

• BGOV OnPoint: Comparing the House and Senate Coronavirus Bills

Photographer: Amanda Andrade-Rhoades/Bloomberg

McConnell at the Capitol on Thursday

Trump Says He Won’t Veto Postal Funds: Trump said at a White House briefing he wouldn’t veto a stimulus bill with funds for the U.S. Postal Service over his criticism of efforts to encourage mail-in voting during the coronavirus pandemic, Teaganne Finn reports. Earlier Trump directly tied his opposition to a proposed $25 billion financial lifeline for the Postal Service to his criticism of efforts to encourage mail-in voting during the coronavirus pandemic.

• Separately, Rep. Gerry Connolly (D-Va.) requested a flash report regarding the legality of Postmaster General Louis DeJoy’s changes to the service standards and implementation of a reorganization plan at the U.S. Postal Service. It’s “unclear whether the Postmaster General is complying with all statutory, regulatory, and administrative processes” related to the changes to operations, Connolly said in a letter to the service’s inspector general. Read more from Victoria Hodge.

N.Y. Projects $62 Billion Tax Loss from Virus Over Four Years: New York is facing $62 billion in tax losses over the next four fiscal years as a “direct consequence” of the coronavirus pandemic, the state Budget Division said in a quarterly estimate. State Budget Director Robert Mujica called for the federal government to “put an end to its months of dithering and deliver funding to states” to avoid permanent cuts in services. Read more from John Herzfeld.

Schumer Backs $120 Billion Restaurant Fund: Senate Minority Leader Chuck Schumer (D-N.Y.) is backing a bipartisan bill that would create a $120 billion fund for restaurants, which have been ravaged by the coronavirus pandemic. Schumer said in a statement today that lawmakers should “act now to pass this important legislation and other critical assistance that struggling small businesses and workers are in desperate need of.”

His support increases the possibility that the bailout for restaurants could move forward on its own. The hospitality industry, which has had millions of job losses as states and cities instituted lockdowns and indoor dining restrictions to control the spread of the novel coronavirus, is central to the economy of Schumer’s home state, but food and drinking establishments have struggled with existing relief programs for small businesses. Read more from Ben Brody.

What to Watch

The House will meet in a pro forma session at 2 p.m.

The Senate will meet in a pro forma session at 10 a.m. The Senate will next return for business on Sept. 8 at 3 p.m.

Trump heads to Bedminster, N.J., where he is scheduled to deliver remarks at 5 p.m. to the City of New York Police Benevolent Association. The president earlier said in a New York Post interview he is campaigning in the New York because he believes it is in play during his re-election after sometimes violent protests erupted in New York City following the death of George Floyd,Justin Sink reports. Trump lost New York by 22 points in 2016.

The Coronavirus Pandemic

Trump Clashes With Biden on Mask Requirements.: Trump clashed with Democrat Joe Biden over requirements to wear masks to prevent the spread of the coronavirus after the former vice president called for governors to issue mandates in their states. “Every single American should be wearing a mask when they are outside for the next 3 months at a minimum,” Biden told reporters yesterday in Delaware. “It’s not about your rights, it’s about your responsibilities as an American.”

Trump rejected Biden’s approach later in the day. “If the president has the unilateral power to order every single citizen to cover their face in nearly all instances, what other powers does he have?” Trump said. “We want to have a certain freedom, that’s what we’re about.” Read more from Mario Parker and Jordan Fabian.

Reopening Indian Country Schools Called Risky: The federal government’s September goal for reopening 53 American Indian schools for in-person classes is premature and may be politically motivated, Democrats said, even as access to broadband for virtual learning lags. The Bureau of Indian Education plans to reopen brick-and-mortar schools in 10 states on Sept. 16, it told tribal leaders in a memo last week. Trump has pressured K-12 schools for weeks to reopen this fall. While many districts have rejected Trump’s pressure, the 53 schools are run by federal officials. Read more from Andrew Kreighbaum and Tripp Baltz.

Covid-19 Shaping Up to Be Battle for Years: The coronavirus pandemic is likely to be a challenge for years to come even with a vaccine, according to pharmaceutical and public-health experts. While a vaccine will provide some measure of protection to societies around the globe, the virus is likely to flare up from time to time and be constantly battled, much like the flu and other pathogens.

“We know this virus is not going away any time soon. It’s established itself and is going to keep on transmitting wherever it’s able to do so,” Soumya Swaminathan, chief scientist for the World Health Organization, at the “How Covid-19 Is Reshaping the Global Healthcare Ecosystem” event hosted by Bloomberg Prognosis. “We know we have to live with this.” Read more from Drew Armstrong and Riley Griffin.

Fake Shot Could Be Ticket to Front of Vaccine Line: Thousands of Americans who volunteer for coronavirus vaccine trials, only to get a placebo, should jump toward the front of the line when a shot is available, bioethicists said. Front-line health workers will likely get the vaccine first once one is ready, but parsing out who should go next for limited shots among 300 million Americans is something medical experts and policymakers are already wrestling with. One of the groups up for some extra consideration is volunteers who received a placebo in clinical trials. Jeannie Baumann has more.

Vaccine Rush Leaves Little Recourse for Anyone Harmed: Americans who suffer adverse reactions to coronavirus vaccines that the U.S. is racing to develop will have a hard time getting compensated for injuries from the drugs. That’s because pandemic-related claims for vaccines will be routed to a rarely used federal program set up to encourage drugmakers to help combat public health emergencies. It spares pharmaceutical and device makers from costly liability lawsuits in exchange for taxpayers compensating injured patients — though it doesn’t guarantee there’s funding to do so.

Since it began in 2009, the program has paid out less than $6 million, and it has yet to receive any dedicated U.S. government funding for Covid-19. Read more from Valerie Bauman and Susan Decker.

Elections & Politics

What Kamala Harris Did on Climate and Fossil Fuel: An unlikely consensus developed soon after Biden selected Sen. Kamala Harris (D-Calif.) as his running mate. Trump and his petroleum-industry allies fell into near perfect agreement with climate activists and environmental groups on one thing: Harris is an aggressive crusader against fossil fuels. While that position might be useful for riling political bases on both sides, a review of evidence from her career as a prosecutor and legislator indicates that Harris appears more moderate than either side admits. And her record shows that her motivation has been driven more by climate justice than climate change. Read more from Leslie Kaufman.

Biden Campaign Raising $1 Million an Hour Since Harris Pick: Biden’s deputy campaign manager Rufus Gifford said in a Twitter post last night the campaign had raised $48 million in the 48 hours since Harris was announced as Biden’s vice presidential pick, Chelsea Mes reports.

Trump’s Net Worth in Office Is Down $300 Million: As the presidential election nears, American voters are sure to be asked if they’re better off financially than they were four years ago. Trump isn’t. The president’s net worth has declined $300 million in the past year to $2.7 billion, erasing 10% of his fortune since he took office, according to the Bloomberg Billionaires Index, Caleb Melby and Tom Maloney report.

Trump to Deliver Speech From White House Lawn: Trump plans to accept the Republican presidential nomination from the lawn of the White House, saying the location would save money on security costs. Some critics — including Sen. John Thune (R-S.D.), the second highest-ranking Republican in the Senate — had suggested giving the nominating speech on federal grounds could be problematic. Read more from Justin Sink.

Bloomberg Joins Lineup of Speakers: More speakers, including two former Democratic presidential candidates, have been added to the lineup for next week’s virtual Democratic National Convention: Former New York City Mayor Michael Bloomberg and entrepreneur Andrew Yang. Other speakers will be Michigan Gov. Gretchen Whitmer, Los Angeles Mayor Eric Garcetti, and Rep. Cedric Richmond (D-La.), among others, Misyrlena Egkolfopoulou reports. Michael Bloomberg is the majority owner of Bloomberg Government’s parent company.

Scott to Speak at GOP Convention: Sen. Tim Scott (R-S.C.) will make a speech at the Republican National Convention the week of Aug. 24 as the party seeks to make “Honoring the Great American Story” its overarching theme, according to an official with Trump’s campaign. It’s unclear which night Scott, the only Black senator who is frequently discussed as a potential 2024 Republican presidential candidate, will speak. Read more from Kevin Cirilli.

Judge Demands Evidence of Mail Voting Fraud: A federal judge appointed by Trump gave the president’s campaign one day to turn over evidence to support its claims of widespread mail-in voting fraud—or admit that it doesn’t exist. The Trump campaign and Republican National Committee are suing Pennsylvania’s secretary of state, Kathy Boockvar, and local election boards over their plan for mail-in balloting for the Nov. 3 elections. Trump’s team said the plan “provides fraudsters an easy opportunity” to commit fraud. Bob Van Voris has more.

Defense & Foreign Affairs

Trump Claims Foreign-Policy With UAE-Israel Deal: Trump hasn’t yet delivered the “deal of the century” he’s long sought in the Middle East, but his administration’s efforts have produced an agreement between Israel and the United Arab Emirates that even opponent Biden is calling a historic step. It’s an accomplishment that comes with plans for a White House signing ceremony on the cusp of the November presidential election after Trump failed to deliver on efforts to secure a nuclear deal with North Korea or force Iran’s leaders to the negotiating table through a “maximum pressure” campaign of sanctions. Read more by David Wainer, Glen Carey and Jordan Fabian.

Trump Team Wades Again Into Balkan Mediation: Serbia and Kosovo accepted an invitation by Trump’s envoy to meet at the White House next month even as the European Union leads the efforts to reconcile the wartime foes amid recurring U.S. attempts to mediate as well. Richard Grenell, Trump’s point man for the region, scheduled the meeting for Sept. 2, more than two months after a similar US initiative fell through when an EU-backed court unveiled war crimes charges against Kosovo President Hashim Thaci. Top officials of the neighbors later convened in Brussels to jumpstart long-stalled negotiations in talks both sides described as “difficult.” They’re expected to convene again under EU auspices on Sept. 7. Read more from Misha Savic and Gordana Filipovic.

Kim Jong Un Replaces Premier Amid Flood, Virus: North Korean leader Kim Jong Un replaced the premier he named about a year ago and lifted a lockdown on the border city of Kaesong put in place on concerns a former defector who crossed back from South Korea brought coronavirus with him. The moves announced in state media reports come as North Korea is facing flooding set to wipe out farmland and deal another blow to its already staggering economy. Read more Jeong-Ho Lee and Seyoon Kim.

Jimmy Lai Says He Was Arrested on ‘Trumped Up’ Charges: Hong Kong media tycoon Jimmy Lai said he was arrested on “trumped up” charges, pushing back against landmark national security legislation that has raised questions about press freedoms and the future of the democracy movement. “They’re trumped up. I can’t go further on the details,” Lai said in an interview with Bloomberg Television today. Read more from Iain Marlow and Stephen Engle.

What Else to Know Today

Retailers Are Amazon’s New Washington Foe: More than a dozen trade groups are launching a new coalition aimed at forcing e-commerce companies such as Amazon to take stronger measures to fight stolen or counterfeit goods sold on their platforms. The industry associations, which represent Walmart, Target, and Best Buy, among other companies, announced today they are founding The Buy Safe America Coalition to back legislation that would require digital marketplaces to verify information about third-party merchants.

The lobbying push by retailers will only add to the scrutiny facing companies such as Amazon and EBay over their role in allowing counterfeit products from bicycles to jeans to be sold around the world. Lawmakers, Trump and companies have all been exploring ways to curb the deluge of fake goods online. Read more from Naomi Nix and Rebecca Kern.

U.S. Faces Bumpy Antitrust Road With Big Tech: Tech giants have enormous influence over what we buy, read, see and think. But is their market power illegal? At a July 29 House hearing, lawmakers leveled monopoly-abuse accusations at the leaders of Amazon, Apple, Google and Facebook. David McLaughlin, Ben Brody and Naomi Nix sift through the charges, compile the evidence, summarize the CEOs’ defenses and ask the experts if the lawmakers made their case. Read more.

DOJ Says Yale Discriminates Against Asians, Whites: The Justice Department said it has notified Yale that the school illegally discriminates against White and Asian American applicants in its admissions process, after a two-year probe. The government said Yale violates federal civil rights law by discriminating against applicants based on race and national origin because race is “the determinative factor” in hundreds of admissions decisions each year, Patricia Hurtado reports.

Methane Curbs Axed in Reboot of Obama Rules: The Trump administration’s withdrawal of curbs on methane emissions from oil wells and other equipment threatens to disadvantage U.S. energy producers touting natural gas as a green alternative to coal. The final rules, unveiled by Environmental Protection Agency Administrator Andrew Wheeler yesterday, may provoke a backlash in Europe, where regulators have developed a tougher methane strategy. Jennifer A. Dlouhy has more.

CFPB Penalties Decline: The Consumer Financial Protection Bureau’s penalties against companies have significantly decreased in recent months as the agency has pivoted its focus to small-time violators. The bureau’s enforcement actions, under Director Kathy Kraninger, have slowed down compared to former Director Richard Cordray’s tenure. Monetary penalties and consumer redress amounts have also declined under Kraninger, in part because the CFPB has targeted smaller companies that in many instances are unable to pay. Read more from Evan Weinberger.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com; Michaela Ross at mross@bgov.com