White House to propose $1.8 trillion stimulus plan: Reports

With the presidential election fast approaching, the White House is preparing a $1.8 trillion economic rescue plan to try to coax congressional Democrats into an agreement, according to media reports Friday.

President Donald Trump this week has veered wildly in his position on stimulus to help the economy recover from the damage done by the Covid-19 pandemic, but now seems to be making a major push to roll out funding before his November 3 bid for re-election.

The new proposal, an improvement over the administration's previous $1.6 billion offer, brings them closer to the Democrats' latest package costing $2.2 trillion.

"The president has approved a revised package," White House economic adviser Larry Kudlow said. "I think we are moving in the right direction. The gap is narrowing."

Kudlow did not provide details, but media reports quoted sources as saying the offer was increased by $200 billion.

But even as Trump continues to express newfound optimism after abruptly shutting down the talks and then swiftly changing his mind, Senate Majority Leader Mitch McConnell said Friday Congress is unlikely to agree on a new stimulus package before the US election due to "vast" differences over how much to spend.

"We do need another rescue package, but the proximity to the election and the differences of opinion about what is needed at this particular juncture are pretty vast," McConnell said at a press conference in his home state of Kentucky.

McConnell said that while he would like to see legislators rise above their political differences to approve "one last rescue package... I think that's unlikely in the next three weeks."

His statements contradicted Trump's optimistic comments in recent days, including on Friday, when he tweeted "Covid Relief Negotiations are moving along. Go Big!"

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have been negotiating for weeks, raising hopes for a huge, new relief package to follow up on the $2.2 trillion CARES Act and other measures that brought the total aid passed by Congress to nearly $3 trillion.

But the prospects for a deal took some head-snapping twists this week after Trump halted negotiations on Tuesday and then backpedaled amid an outcry from both parties and business leaders as well as a drop in the stock market.

Wall Street -- one of Trump's favourite indicators of success -- veered higher after the news of the expanded White House offer, with the Dow Jones Industrial Average up 0.6 percent at about 1700 GMT.

Pelosi said she and Mnuchin had a long negotiating session on Thursday and are due to speak again Friday to discuss pending issues of money and policy.

"I do hope that we will have an agreement soon," Pelosi said Friday on MSNBC. "But as you say, they keep changing their minds."

Economists say a new round of government support is critical to prevent a wave of layoffs and bankruptcies and to provide support for the unemployed, and the IMF has urged governments worldwide to continue spending measures to shore up their economies as the pandemic wreaks havoc.

McConnell said the "murkiness" surrounding the deal is largely due to "everybody trying to elbow for political advantage," but lamented the large number of unemployed workers and need for continued jobless benefits.

Trump has downplayed the coronavirus even though he was hospitalized last week after contracting the illness, but fellow Republican McConnell urged people to use masks and respect social distancing measures.

"It's obvious this disease is not gone," he said. "The only way to kill it is with a vaccine."