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Democrats and White House strike deal on coronavirus package

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Via Financial Times

House Democrats have reached an agreement with the White House on a spending package to combat the impact of coronavirus on the US economy that will include two weeks of paid sick leave for afflicted workers, Nancy Pelosi said on Friday.

In a letter to Democratic members of Congress, the House speaker said the agreement reached with Steven Mnuchin, the Treasury secretary, would allow the House of Representatives to pass the legislation “soon”.

Last week, the US Congress approved $8.3bn in emergency funding for federal agencies fighting the spread of the virus. The new legislation, which includes two weeks paid sick leave and up to three months of paid family and medical leave, also expands unemployment insurance and increases federal funding for Medicaid, Ms Pelosi said.

One congressional aide said that while there was yet to be an official estimate of the legislation’s size, it would be “multibillion”. It is expected to pass the Democratic-controlled House on Friday night, before being considered by the US Senate next week. Ms Pelosi said the House would soon begin working on another bill “to protect the health, economic security and wellbeing of the American people”.

The speaker had been locked in negotiations over the spending bill with Mr Mnuchin for much of the week. Her spokesperson said Ms Pelosi had spoken with the Treasury secretary 13 times on Friday alone.

Ms Pelosi’s letter came just two hours after President Donald Trump told reporters in the White House Rose Garden that no deal had been reached.

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“We don’t think the Democrats are giving enough. We’re negotiating,” Mr Trump said. “We thought we had something but all of sudden they didn’t agree to certain things that they agreed to.”

Mr Mnuchin has been more conciliatory in public, saying earlier in the day that US authorities will do “whatever we need to do” to boost liquidity in financial markets and help the US economy, including reaching a deal with Democrats for more fiscal stimulus

“There will be liquidity available, whatever we need to do, whatever the Fed needs to do, whatever Congress needs to do. We will provide liquidity,” Mr Mnuchin told CNBC. 

Mr Mnuchin said he was in regular contact with Jay Powell, the chairman of the Federal Reserve, as well as US business leaders, about mitigating the impact of the spreading disease.

“I can assure you we will use whatever tools we need to make sure that the industries that are impacted by this can get through this,” Mr Mnuchin said. He also said the Trump administration was considering allowing people to suspend student loan payments for a time, among other proposals.

Echoing the optimistic view on the US that has been expressed by Mr Trump and other senior administration officials in recent weeks, Mr Mnuchin said he expected the hit from the coronavirus to be temporary and that there would a recovery later in the year. He dismissed any comparisons to the 2008 financial crisis. 

“This is not like the financial crisis, where people don’t know when this will end. We will get through this,” Mr Mnuchin said. “By the end of the year, I think you can expect we’re going to have a big rebound in economic activity.” 

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