Mnuchin’s loyalty to Trump could end with painful setback as president shreds stimulus deal

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His demand for $2,000 stimulus checks is a direct rejection of the $600 checks that Treasury Secretary Steven Mnuchin had personally proposed and negotiated with Democrats and Republicans. Now, Trump’s rejection of the deal has confounded many leaders on Capitol Hill because they had thought Mnuchin negotiated the package on behalf of the president. The treasury chief’s standing with many lawmakers is now in tatters just days before a full-blown crisis is set to occur.

The president’s denunciation of the agreement represented a stunning public broadside against his own treasury secretary, who for four years loyally shielded the president’s tax returns, endured repeated presidential tirades in private, and defended even Trump’s most incendiary and contradictory remarks. Through it all, Mnuchin had emerged with the unique ability to walk a tightrope between Trump and congressional leaders, serving as an emissary in difficult negotiations. That all ended on Tuesday, when Trump posted a video on Twitter ridiculing the agreement.

In addition to a possible government shutdown on Tuesday, the entire emergency relief package is in jeopardy. The $600 stimulus checks Mnuchin had promised would be sent later this week cannot be sent if the bill isn’t signed into law. And a range of other emergency relief programs that were part of the package, from rental protections to small-business aid, airline assistance and vaccine distribution money, are also now frozen. Congressional leaders have signaled they will make one last attempt to avert a shutdown on Monday, but their options are dwindling. If all these efforts fail, the economy could deteriorate rapidly during Trump and Mnuchin’s final days in office.

“We’ve been assured that the president would sign the bill, and I have no reason to believe that Secretary Mnuchin didn’t believe that,” Sen. Roy Blunt (R-Mo.), a member of Senate Majority Leader Mitch McConnell’s leadership team, told reporters on Thursday.

Mnuchin had described the bipartisan deal as “fabulous” one day before Trump called it a “disgrace.”

“Loyalty and assistance to President Trump generally gets rewarded with humiliation. This is how it ends for a lot of people who work for the guy,” said Brian Riedl, a conservative policy expert at the Manhattan Institute, a right-leaning think tank. “Secretary Mnuchin has been completely embarrassed.”

Trump’s move to distance himself from Mnuchin played out very publicly on Tuesday.

At 12:59 p.m., Mnuchin tweeted a congratulatory message to congressional leaders, thanking them for their vote to approve “additional critical economic relief for American workers, families and businesses.”

“I want to thank President Trump for his leadership,” Mnuchin wrote in a news release accompanying the tweet.

Six hours later, Trump posted a tweet of his own, calling the bill a “disgrace” and demanding sweeping changes. He made no mention of Mnuchin, and aides say the two have barely spoken since. It remains unclear if Trump will sign the bill or veto it.

Mnuchin was blindsided by the video despite spending months as Trump’s principal negotiator with Congress on the aid package, according to two administration officials with knowledge of the matter. The administration officials, like others in this story, spoke on the condition of anonymity to frankly discuss internal matters. A Treasury Department spokespersonsaid Mnuchin was in fact aware of the video and has been speaking to Trump throughout the week, including on Saturday.

In the days leading up to the bill’s passage, officials in both the Treasury Department and the White House Office of Legislative Affairs told congressional Republicans that Trump would sign the bill, according to two people with knowledge of the private exchange.

Congressional leaders of both parties said they believed Mnuchin was brokering the agreement on Trump’s behalf, and the treasury secretary reported to lawmakers that he was keeping the president regularly briefed on the status of talks.

In the video, Trump called the provision of $600 checks in the stimulus package “ridiculously low” and urged lawmakers to approve payments of $2,000 per person instead.

The $600 payments were Mnuchin’s idea and formed the centerpiece of a proposal sent by the White House to congressional Democrats earlier this month. The details of that plan were public 13 days before the president made his objections public.

Trump also attacked the foreign aid package included in a government spending bill coupled with the coronavirus relief package. Several of these provisions were included in the president’s own annual budget proposal earlier this year. A spokeswoman for the White House Office of Management and Budget, which produced the budget document bashed by the president, would not say whether budget officials were involved in the president’s denouncement of his administration’s own priorities.

Trump’s shocking move to possibly blow up the agreement appears to have been his idea alone, according to two people briefed on the matter by White House staff.

White House Chief of Staff Mark Meadows, who had earlier this month successfully talked Trump out of demanding $2,000 stimulus payments, helped orchestrate the video released by the White House. But Meadows did not come up with the idea for it and was widely seen internally as opposing the move, according to two people with direct knowledge of the matter.

One day before Trump’s video was released, Mnuchin called the relief package “fabulous” in an interview with CNBC. Mnuchin stressed that the administration would send payments of as much as $2,400 to millions of American households as early as this week. It would have amounted to one of the largest federal cash payment transfers in history outside the Cares Act in March.

Instead, Trump decided to risk torpedoing the effort while raging against congressional Republicans on Twitter for not supporting his effort to overturn the results of the 2020 presidential election. Trump has also expressed anger at congressional Democrats for not agreeing to a stimulus package before the presidential election.

As the $900 billion stimulus package moved through Congress, Trump grew increasingly upset at media coverage that made him out to be largely sidelined in negotiations, two people briefed by White House officials said. The president has not called congressional Democratic leaders in more than a year. Sen. Mitt Romney (R-Utah), a longtime foe of Trump who voted to impeach him, was widely credited in most press accounts as crucial for breaking the months-long logjam over federal aid.

The result is that Trump’s final economic act in office could be to block an emergency relief package negotiated by his treasury secretary even as the U.S. economy is battered by a surge in coronavirus cases and a new wave of shutdowns.

As many as 14 million jobless Americans received their last unemployment benefits on Saturday. Millions more could lose their homes as an eviction moratorium expires at the end of the year. Both these cliffs would have been avoided had the president signed the stimulus deal.

President-elect Joe Biden on Saturday slammed Trump for refusing to sign the agreement into law.

“It is the day after Christmas, and millions of families don’t know if they’ll be able to make ends meet because of President Donald Trump’s refusal to sign an economic relief bill approved by Congress with an overwhelming and bipartisan majority,” Biden said in a statement. “This abdication of responsibility has devastating consequences.”

And even some people close to the White House say Trump’s decision to hold up the deal reflects his embittered mood in the final days of his presidency.

“He’s just angry at everybody and wants to inflict as much pain on Congress as possible,” one person briefed by White House officials on the matter said.

The decision to torpedo the deal also reflects Trump’s willingness to undermine Mnuchin despite the treasury secretary’s largely unwavering deference to the president for four years.

Mnuchin, a former Wall Street and Hollywood executive, is just one of a handful of Cabinet secretaries to survive the duration of the president’s first term. He declined to comment for this story through a spokeswoman.

He rejected House Democrats’ attempt to secure Trump’s tax returns, despite a 1924 law explicitly giving them authority to obtain the documents. He defended the president’s handling of protests by white nationalists in Charlottesville in 2017, as well as the president’s derogatory remarks of Black House Democrats.

Trump has not always rewarded Mnuchin’s loyalty in kind.

The president has privately complained to congressional Republicans that Mnuchin was “giving away the store” in negotiations to congressional Democrats and wondered if he was not pushing back hard enough against House Speaker Nancy Pelosi (D-Calif.).

Trump has also repeatedly berated Mnuchin, fuming at his treasury secretary over small-business aid that went to the Los Angeles Lakers and launching into an explosive tirade over Federal Reserve Chair Jerome H. Powell. Mnuchin in 2017 recommended to the president the selection of Powell.

Lawmakers on Capitol Hill believed these tensions had largely blown over with Trump focused in recent weeks on the 2020 election. Senior negotiators were led to believe Mnuchin was speaking on behalf of the president in talks over a long-awaited stimulus package earlier this month, according to multiple people close to the negotiations.

But signs emerged even during the latest round of negotiations that, in retrospect, may have indicated the president could tank the agreement.

During one Dec. 15 meeting, Pelosi repeatedly tried pressing Mnuchin about the president’s position on direct payments. Attending the meeting were the four major congressional leaders — Pelosi; McConnell (R-Ky.); Senate Minority Leader Charles E. Schumer (D-N.Y.); and House Minority Leader Kevin McCarthy (R-Calif.) — with Mnuchin calling into a speaker phone located in the middle of Pelosi’s conference room.

Pelosi asked Mnuchin four separate times to explain the president’s position, but Mnuchin demurred, according to two people who spoke on the condition of anonymity to discuss the private meeting. According to those people, Pelosi grew frustrated and at one point exclaimed: “Come on, Steven!”

Some Democrats, such as former treasury secretary Larry Summers, have attacked Mnuchin for several years, alleging he “may be the greatest sycophant in Cabinet history.” Other senior Democratic lawmakers speak of Mnuchin with a mixture of admiration and pity, saying he has demonstrated an understanding of the need to provide urgent aid to the American economy despite the president’s second-guessing. They blame Trump for leaving Mnuchin twisting in the wind despite his efforts to improve the president’s economic record.

“From the beginning, he’s had a tough job but has always understood the seriousness of the crisis. … Mnuchin has been a very positive force,” said Sen. Mark R. Warner (D-Va.), who became close with Mnuchin and goes for long bike rides with him. “But everyone who has ever tried to speak for Donald Trump has had their legs cut out from under them eventually.”