White House economic adviser Larry Kudlow has not ruled out any element in the next potential coronavirus relief bill, including more money for state and local governments and the small business programme.
But he added that the White House was in “kind of a pause period right now” and hinted that Donald Trump’s threat to link funding to states to concessions on immigration policy could yet be attempted.
“Regarding the states,” Kudlow told CNN’s State of the Union on Sunday, “as you know, the president has from time to time spoken about linking that to sanctuary cities. I don’t think anything’s been decided yet.”
Sanctuary cities, mostly run by Democratic authorities, do not comply with the federal government on attempts to detain and deport undocumented migrants under Trump’s hardline immigration approach.
Speaking at the White House this week, the president said: “If you’re going to get aid to the cities and states for the kind of numbers you’re talking about – billions of dollars – I don’t think you should have sanctuary cities.”
It is not clear that the White House would be legally able to mandate such compliance. Observers have also questioned the propriety of tying economic aid to states and cities to policy priorities, particularly in a time of national crisis.
The US has recorded more than 1.1m coronavirus cases and the death toll has passed 66,000. More than 30 million Americans have filed for unemployment in the past six weeks.
Lawmakers are discussing a fourth coronavirus relief bill. Democrats are calling for aid to cities and states and some governors have warned of massive layoffs if they fail to get it.
Some Trump advisers have said the need for another stimulus bill is not yet clear. Kudlow said “there may well be additional legislation”.
“We know the economy is still in a terrible, contractionary phase, tremendous hardships, everywhere,” he said. “We’re trying to work through this. I don’t want to rule in or out anything right now. We are in discussions internally and with leading members of Congress.”
The White House, Kudlow said, was “just trying to stabilise things and get folks through this, and then we’ll see, we will see in a couple of weeks, what needs to be done and perhaps how to do it”.
Kudlow was asked if aid to small businesses would be increased again, given how quickly the money is being claimed.
“It may be,” he said. “We haven’t made a decision yet. This has been an extremely popular and effective programme. Keeping folks on the payroll is extremely important.“
While Democrats have supported more money for state, local and tribal governments, Mitch McConnell, the Republican leader of the Senate, has demanded protection for reopening businesses from Covid-19-related lawsuits.
Also on CNN, Maryland governor Larry Hogan, a Republican, chastised the White House, the Senate and the Democratic-held House for tying “divisive politics” to the need for coronavirus relief funding.
“Stop and focus on helping,” he said.
Trump is focused on the stalled US economy, seeing a resurgence as vital in a re-election year as polls put him behind Joe Biden, his presumptive challenger, in key electoral college states.
Kudlow said: “We had a very strong economy during the Trump years and even during the first few months of this year. We’d like to apply the same free enterprise principles. Besides [a] second-half rebound [this year], I think 2021 could be a spectacular year in the economy with the right set of policies.”
The president has backed protesters demanding an end to social restrictions and lockdowns, even when those protesters have been armed and have entered the statehouse, as in Michigan this week. Michigan has seen more than 43,000 cases and more than 4,000 deaths from Covid-19.
More than half the 50 US states are now relaxing their social distancing guidelines, even as public health experts caution against moving too fast.
On Sunday, senior Michigan adviser Dr Joneigh Khaldun told NBC’s Meet the Press: “If we don’t do well with these social distancing measures, more people will die and that is just the facts.”
