State aid emerges as major hurdle to reviving COVID-19 talks

Federal money for state and local governments is a key sticking point to reviving negotiations over the next coronavirus relief package.

The White House and congressional Democrats are deeply divided over whether states should get more money — and if so, how much.

Before talks collapsed late last week, the two sides were hundreds of billions apart on how much they were willing to put on the table. Democrats want $915 billion, while Republicans are offering $150 billion, the same amount included in the CARES Act from late March.

There are no signs the impasse is thawing, underscoring how difficult it will be to clinch an agreement after negotiations went off the tracks.

Treasury Secretary Steven Mnuchin called the Democratic request for nearly $1 trillion in new money “an absurd number.”

"There's plenty now, and we've put more money on the table," he said during an interview with CNBC on Monday. "We’re not going to give a trillion dollars for state and local. That’s just not a reasonable approach."

President Trump and Republicans have lashed out at Democrats, arguing they torpedoed the talks unless they got bailouts for their home states as part of the next COVID-19 relief bill.