Stocks popped on Friday after the Trump administration proposed a stimulus plan with a higher price tag in order to reach an agreement with the Democratic leaders in Congress.
The new stimulus proposal costs $1.8 trillion, an increase from the previous White House offer of $1.6 trillion but smaller than the $2.2 trillion package that House Democrats have been pushing.
The Dow Jones Industrial Average jumped 225 points on the news and finished with a 0.57% increase. The Nasdaq surged 1.39% on Friday, and the S&P 500 rose 0.88%.
“Covid Relief Negotiations are moving along,” President Trump tweeted on Friday. “Go Big!”
Trump, speaking later on Rush Limbaugh’s radio show, announced the $1.8 trillion proposal and said that he would “like to see a bigger stimulus package frankly than either the Democrats or Republicans are offering.”
White House National Economic Council Director Larry Kudlow said that the new proposal includes aid for U.S. airlines, direct stimulus checks, a continuation of enhanced unemployment, and Paycheck Protection Program loans for small businesses.
Treasury Secretary Steven Mnuchin presented the plan to House Speaker Nancy Pelosi on Friday.
It’s been a wild week for stimulus negotiations. Trump tweeted on Tuesday that he was asking his team to end stimulus negotiations and blamed Pelosi, which caused stocks to tumble.
Trump later tweeted that he was open to a stimulus proposal for targeted aid, which pushed stocks up again.
Pelosi denounced the White House’s proposal for targeted aid. House Democrats are looking for more than $400 billion in relief for states and municipalities to be included in a broader stimulus package for individuals and small businesses. The Trump administration is opposed to this additional funding.
When the previous funding bill ended, millions of unemployed Americans lost their enhanced benefits. Both sides want to continue those benefits, with the Democrats wanting to restore the extra $600 per week and the Republicans favoring $400 per week.
Even if the White House and House Democrats can reach an agreement, the Republican-led Senate will serve as an additional roadblock. Senate Majority Leader Mitch McConnel said today that it is “unlikely” that a stimulus package will pass before the election.