Treasury Secretary Mnuchin Testifies At House Hearing On Coronavirus
(Photo : Photo by Graeme Jennings-Pool/Getty Images)
U.S. Treasury Secretary Steven Mnuchin testifies before a hearing of the House subcommittee investigating the federal response to the coronavirus crisis on Capitol Hill September 1, 2020 in Washington, DC.

Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi have reached an "informal deal" to stopgap government funding at the end of the month.

The informal deal between Mnuchin and Pelosi is a measure to avoid a government shutdown, sources from both parties said Tuesday.

The source also added in a Fox News report that Mnuchin and Pelosi have only gone through an informal deal. There are still no specifics on a bill or legislative text.

It is clear, though, that both parties want to avoid a government shutdown amid the pandemic and its economic woes.

An ABC News report said the informal deal could avoid a government shutdown until after September 30. It will also postpone the heated debate on coronavirus relief negotiations, which had been stalled for weeks.

The informal agreement was made on a phone call Tuesday.

Full details on the deal are still not available, but staff-level talks are said to begin as reported by USA Today. Sources added that there are still no decisions set in stone, and the bill's duration has not yet been decided.

Coronavirus Relief Unlikely to be Included

It is not clear if the deal will include the new COVID-19 relief package being negotiated at present. But reports believe it is unlikely for the relief package to be part of the stopgap funding.

This also means the continuing resolution has to keep the government open after September 30, The Hill said. It greatly lowers the odds of shutdown leading up to the November 3 elections.

"House Democrats support a clean continuing resolution," said Drew Hammill, spokesman for Pelosi.

There has been no immediate response from the Treasury Department. But White House Press Secretary Kayleigh McEnany said Thursday that the White House does believe funding will be ready to avoid a shutdown.

Having the stopgap funding will only keep the government running until October 1. But the deal does not resolve the standoff over the new stimulus bill. It also did not have any relief measures set in it yet.

Meanwhile, a source said that both Mnuchin and Pelosi did not discuss having the deal's relief measures but did not rule it out.

The stopgap will address immediate needs, reported the Associated Press. The continuing resolution, on the other hand, will need more extensive negotiation.

The deal aims to make sure the impasse on the COVID-19 relief does not cut drastic costs in the economy.

Risks of Mnuchin, Pelosi Deal

Both Republicans and Democrats have been seeking to stop a government shutdown. Having a one could be damaging for both parties just before the November 3 elections.

With this, both parties plan to extend funding at least until mid-November.

But then, there is a risk that both sides would try to take advantage of the need to have a stopgap to get what they want for a stimulus, Bloomberg noted.

House Democrats and the White House have been at an impasse over the stimulus since August 7. Talks collapsed then, and it is vague when and whether both parties will be willing to reopen talks.

Mnuchin and Pelosi did not bridge the trillion-dollar wide gap between their sides of the debate. This is even though the chief had signaled that fiscal aid is urgent for some parts of the U.S. economy.

Pelosi later pointed out that the Democrats have already pegged their offer lower than their earlier $3.4 trillion demand.

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