(Bloomberg) -- White House and Democratic negotiators driving toward a deal on a final massive virus relief package by the end of the week still must overcome a raw mix of election-year pressures, internal GOP splits and a profound lack of trust between the parties.President Donald Trump’s sinking poll ratings amid the virus’s resurgence have Democrats sensing they have leverage with 90 days to go before the November election and Republicans bickering over additional aid spending on top of the almost $3 trillion Congress previously approved.House Speaker Nancy Pelosi and top Senate Democrat Chuck Schumer have been playing hardball, dismissing out of hand smaller-scale proposals floated last week by Trump’s chief of staff, Mark Meadows, as well as a $1 trillion plan cobbled together by Senate Majority Leader Mitch McConnell.Both sides declared they were making progress Tuesday as they started to exchange detailed offers and agreed on a goal of reaching a deal by the end of the week, teeing up possible votes next week. They are set to meet again Wednesday after Pelosi and Schumer meet with the postmaster general. Aid for the Postal Service and state governments to conduct vote-by-mail operations given the pandemic is a top Democratic priority that is opposed by Trump, who has blasted mail-in ballots for weeks.Some lawmakers are skeptical that legislation can be produced and voted on by next week given the differences that remain. But there may be added urgency to get something done with signs indicating the economy is being weighed down by the pandemic. ADP Research Institute data released Wednesday showed payroll gains at U.S. companies slowed sharply in July, suggesting the pickup in coronavirus cases is putting brakes on the job market.The talks got off to a late start. Democrats set out their $3.5 trillion proposal in May, but the White House and Senate Republicans delayed acting for months in hopes the economy would have reopened and the virus faded by now. McConnell released their plan as millions of Americans were about to receive their final $600 federal pandemic unemployment bonus checks.Republicans are riven by resistance to another big stimulus as some senators express alarm about federal debt. Among them are Ted Cruz of Texas and Rick Scott of Florida, two potential presidential candidates in 2024. Unlike earlier this year, when financial markets and the economy were in free-fall, some of the GOP lawmakers want to focus on encouraging businesses and schools to reopen instead of delivering another expensive rescue.Other GOP lawmakers, facing re-election fights in November, are eager for a deal amid signs that the economy is faltering.That’s left McConnell, the party’s most accomplished and experienced negotiator, with a weak hand to play and outside the negotiating room looking in. The majority leader, who is up for re-election himself in Kentucky, acknowledged that the unanimity that marked passage of the $2.2 trillion rescue plan in March won’t be present this time around.“If you’re looking for a total consensus among Republicans, you’re not going to find it,” McConnell told reporters.Better DealWith Senate Republicans divided, Democrats apparently think they’ll get a better deal talking directly with the White House.“We have to have an agreement, and we will have an agreement,” Pelosi told PBS Tuesday. “But we’re not going to do it at the expense of American working families, on the basis that it is going to add to the national debt.”Instead of McConnell or Treasury Secretary Steven Mnuchin, who has previously cut several deals with Democrats, Trump’s lead negotiator for this round is Meadows, the former House Freedom Caucus chairman who has had more experience in government shutdown confrontations than in cutting major bipartisan deals.Senate Appropriations Committee Chairman Richard Shelby praised Meadows for being engaged with lawmakers but noted his inexperience in such talks.“This is his first deal,” Shelby said.Stripped DownMeadows initially proposed a stripped-down plan tying unemployment and school aid while negotiations continued, but Democrats are insisting on a bigger plan that they say meets the moment. In turn, he has floated potential executive actions Trump could take on his own if the talks break down.Among the sticking points are the size and length of unemployment payments, state and local aid, McConnell’s push for sweeping liability protections and the price tag, with Democrats’ opening offer the $3.5 trillion Heroes Act.Senator Rob Portman, an Ohio Republican and former White House budget director, said most Republicans want a deal and he has been working Democrats behind the scenes to try to find compromises on unemployment benefits and other issues.“I don’t think they are showing the kind of flexibility they have to show,” he told reporters. Portman said Democrats’ demands, which include continuing the $600-per-week unemployment benefit, are impossible for Republicans to support, and that Democrats have continued to ratchet up demands for school funding.Mnuchin, meanwhile, continues to play a major role but faces skepticism from conservative Senate Republicans who say he gave Democrats too much in past virus relief packages. Trump himself has said he wants a deal but some of his ideas, like a payroll tax cut, have little support on either side of the aisle and he’s yet to propose a complete, public plan of his own.One pessimistic GOP aide warned the talks could go on for weeks, and maybe end up including other issues as well, like a stopgap spending bill that will be needed to keep the government open past Sept. 30.(Updates with ADP data in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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