Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.
President Trump on Tuesday laid out what he wants “on the table” for the next round of economic stimulus -- calling for the elimination of “sanctuary” city policies, as well as cuts to payroll and capital gains taxes while arguing that the coronavirus must not be used to bail out “poorly run” states.
“Well run States should not be bailing out poorly run States, using CoronaVirus as the excuse!” Trump tweeted. “The elimination of Sanctuary Cities, Payroll Taxes, and perhaps Capital Gains Taxes, must be put on the table. Also lawsuit indemnification & business deductions for restaurants & ent [sic].”
Trump’s tweet comes as lawmakers gear up for negotiations for what is becoming known as “Phase 4” of efforts to tackle the coronavirus pandemic and boost the economy back to life after it was largely shut down in response to the virus.
Democrats have called for a $500 billion aid injection for state governments, and possibly even more to localities in order to help with their responses to the coronavirus pandemic.
"In terms of funding, we may have two packages, one for states and one for locals," House Speaker Nancy Pelosi, D-Calif., said last week during a press call. Later she clarified: “It looks like we’re going to need 500 [billion] for the states and we may also need a very big figure for counties and municipalities."
But Republicans have expressed concern that the money could be used by blue states that have racked up debt in areas such as pensions. Senate Majority Leader Mitch McConnell said last week on "Your World with Neil Cavuto" that he was "certainly open to considering additional assistance to state and local governments" after he had previously suggested that states with massive gaps in their budget should be allowed to declare bankruptcy.
"It is important, however, to understand that many states have systemic long-standing challenges: In many of them, their pension fund, in many of them from overspending," McConnell said. "What we're saying here is, we are not interested in rescuing badly run states from the mistakes they've made [that are] completely unrelated to the coronavirus. So let me make it perfectly clear. We are open to considering another bill."
Trump, too, has expressed similar concerns and has started to float ideas such as changes to sanctuary policies as part of his wishlist.
“I don't even think they know they have a problem, but they have a big problem with it, the sanctuary city situation,” Trump said last week. “We'd have to talk about a lot of different things. But we're certainly open to talking, but it would really have to be COVID-related, not related for mismanagement over a long time, over a long period of time.”
On Tuesday, Trump also referenced lawsuit indemnification as a way of protecting businesses from being sued as they seek to reopen in the months ahead. McConnell has previously called liability protections as a “red line” for Republicans in the coming negotiations.
"We are in a place that we have never been before and we are all hoping for a rapid recovery," McConnell has said. "I think that we get a more rapid recovery if we have liability reform [and] if we have testing that reassures people, because the economy will not truly be open unless everybody's willing to participate in the economy again."
But Democrats will also likely have initial demands of their own. In addition to the $500 billion -- and possibly up to $1 trillion -- for state and local government aid, Pelosi has suggested a guaranteed minimum income.
“Let’s see what works, what is operational, and what needs other attention? Others have suggested a minimum income, a guaranteed income for people. Is that worthy of attention now? Perhaps so,” she said.
Fox News’ Charles Creitz contributed to this report.