Kudlow unsure if Congress will pass another virus relief bill, but says recovery still underway

White House economic adviser Larry Kudlow on Friday said he was unsure whether Congress will pass another coronavirus relief package before the November election, one day after Senate Democrats thwarted the passage of a slimmed-down GOP aid bill.

"Well, in truth I don't know," Kudlow said during an interview with FOX Business' Stuart Varney. "There's going to be something of a shift right now to a continuing resolution to keep the government open...My suspicion is that's going to be the next order of business."

A deadlock between White House officials and Democratic leaders over what to include in another round of emergency aid has continued to persist more than one month after negotiations first collapsed, with no sign of a detente.

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Democrats blocked Republicans' $300 billion relief measure, introduced earlier this week by Majority Leader Mitch McConnell, saying that more aid is needed for American workers and businesses. Republicans, in turn, have accused Democrats of acting as obstructionists.

Kudlow said negotiations will resume between the two sides "if people want to discuss," but cautioned that he does not expect "anything dramatic in the near-term."

One of the biggest points of contention in aid talks is the package's cost: Democrats have offered to come down $1 trillion from the roughly $3 trillion HEROES Act, which the House passed in May. But the White House and Republican leaders want to keep the price tag closer to $1 trillion amid growing concerns over the nation's ballooning deficit.

House Speaker Nancy Pelosi said it's fruitless to revive the negotiations until the GOP agrees to a $2.2 trillion price tag.

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"We have said again and again that we are willing to come down, meet them in the middle — that would be $2.2 trillion," Pelosi told reporters at the end of August. "When they're ready to do that, we'll be ready to discuss and negotiate. I did not get that impression on that call."

Lawmakers are now focusing on passing a stopgap measure to keep federal agencies open beyond Sept. 30. Treasury Secretary Steven Mnuchin, one of the lead negotiators for the White House, and House Speaker Nancy Pelosi, D-Calif., said they have agreed to work on a clean short-term spending bill to avoid a government shutdown on Oct. 1.

Asked on Wednesday about the odds for a deal this year, Mnuchin said, “I don’t know. We’ll see. I hope there is. It’s important to a lot of people out there."

The Senate returned to Washington on Tuesday from its four-week August recess. The House is scheduled to return on Monday for about three weeks.

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The impasse has put at risk potentially trillions of dollars in aid for families and small businesses, including a fresh round of $1,200 stimulus checks, extra unemployment aid for millions of out-of-work Americans, $100 billion to help reopen schools and relief for cash-strapped state and local governments.

While the nation's economy has mounted a slow-but-steady recovery, new government data released last week shows the labor market is still far from pre-crisis levels: Employers added 1.4 million jobs in August and the unemployment rate fell to 8.4%, but there are still 11.5 million more out-of-work Americans than there were in February.

A fourth aid package could serve as a catalyst to the economy's recovery, according to Kudlow, but he stressed that a turnaround is not dependent on more fiscal stimulus.

"I don't think the recovery hinges on this bill," he said. "But the reality is that it would help. So I don't understand the logic. Why not do it?"

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