Democratic and Republican leaders are hinting that they are looking for a path toward reviving stalled negotiations on the next round of pandemic relief for the U.S. economy, even as both sides remain far from any deal.

House Speaker Nancy Pelosi suggested that Democrats might be willing to cut more from their proposal to reach agreement on immediate needs and — with the party growing more confident of gains in the November elections _ return to do more after votes are cast.

Treasury Secretary Steven Mnuchin and Senate Majority Leader Mitch McConnell, meanwhile, said Pelosi’s decision to break out $25 billion in funding for the Postal Service from the original Democratic relief plan could provide an opening for talks.

“The outlook for a skinny deal is better than it’s ever been, and yet we’re still not there,” White House Chief of Staff Mark Meadows told reporters Wednesday.

Although Pelosi is bringing the House back to Washington to vote Saturday on a post office bill that would prevent any cutbacks by the agency as well as provide the extra money, there was no sign McConnell would act to bring back the Senate from its break. Any accord is still likely to wait until September even as the U.S. economy is limping along with many businesses still struggling and millions of Americans out of work.

Pelosi said both sides “have to try to come to that agreement now.”


She suggested Democrats might go beyond their most recent offer to trim the $3.5 trillion relief package the House passed in May and come back later for the rest.

“We’re willing to cut our bill in half to meet the needs right now,” she said Tuesday at a Politico Playbook event. “We’ll take it up again in January.”

Pelosi’s spokesman Drew Hammill later said that she was referring to previous offers to meet Republicans “halfway, not cutting our bill in half.”

Senate Republicans offered their own $1 trillion plan at the end of July. During negotiations earlier this month, Pelosi and Senate Democratic leader Chuck Schumer said they had offered to cut their proposal by $1 trillion if the White House and GOP would raise their’s by the same amount. They were rebuffed.

The Trump administration sees a possibility for Republicans and Democrats to agree on a smaller round of pandemic relief totaling $500 billion that would omit the biggest areas of disagreement, a senior U.S. official said on Tuesday night.

The official, who discussed the matter on the condition of anonymity, said that both parties might be able to reach an accord on issues like financial help for the Postal Service, aid to schools and more money for businesses to keep their workers employed.


That is far short of what Democrats want.

Pelosi in the past has rejected such an approach. Yet she’s also getting some pressure from fellow Democrats to offer partial relief. Representatives Scott Peters of California, Donald Beyer of Virginia and Derek Kilmer of Washington State are seeking support from other members to ask Pelosi and Majority Leader Steny Hoyer for a vote on extending the $600 a week in extra unemployment aid that expired at the end of last month.

McConnell said in an interview with the Louisville Courier Journal Tuesday that the return of the House for the post office vote “could open the opportunity for discussion about something smaller than what the speaker and the Democratic Senate leader were insisting on at the point of impasse.”

Mnuchin, one of the two key Republican negotiators along with Meadows, said earlier Tuesday that with the House in session this weekend he hoped Pelosi “will be more interested in sitting down.”

Economic and financial-market news hasn’t put pressure on the two sides to accelerate an accord on coronavirus relief. The S&P 500 Index closed at a record high on Tuesday, hours after data showing an unexpectedly strong gain in starts on new home construction in July.

Even so, economists warn that the expiration of supplemental unemployment insurance benefits _ only partly addressed by unilateral, temporary action by President Donald Trump _ along with the end of other fiscal support will damage growth.

“It looks likely that the hit to disposable income from fiscal policy in August will only partially reverse in September unless Congress acts soon,” Goldman Sachs Group Inc. economists including Alec Phillips wrote in an Aug. 14 note. “While the situation is fluid and unpredictable, all else equal this presents a downside risk to our forecast for growth in Q3.”

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