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Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

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Photo: Win McNamee/Getty Images

Within a day of tweeting that he was calling off bipartisan talks for a coronavirus stimulus deal, President Trump phoned House Minority Leader Kevin McCarthy and indicated he was worried by the stock market reaction and wanted a "big deal" with Speaker Nancy Pelosi, per two sources familiar with the call.

What we're hearing: Trump was spooked after seeing the instant drop in the stock market and intense backlash to his tweet, and he has since directed Treasury Secretary Steven Mnuchin to push for a more comprehensive relief bill before the election.

  • He wants a deal that would go beyond securing aid for the struggling airline industry and extending the small business Paycheck Protection Program.
  • Mnuchin swiftly acted on the president's directive and called Pelosi Wednesday evening to tell her negotiations were back on, per a Democratic congressional aide.

Why it matters: Few people on Capitol Hill thought a large-scale stimulus deal would be reached before Election Day, and it's still very unlikely both sides can compromise by then. However, Republicans did not expect Trump to be the one to walk away from the table, and they were even more stunned he did so in such a public way.

  • Washington leaders were even more baffled when, shortly after Trump said he wanted his team to abandon negotiations, he contradicted himself by responding to a headline citing Federal Reserve chair Jerome Powell calling for more fiscal stimulus and saying Congress has a low risk of "overdoing it." Trump's response: "True!" 
  • The sources say Trump told McCarthy in their Wednesday phone call that he agreed with Powell. Trump has long held the view that a bigger deal that delivers more money directly to Americans and businesses would help him win re-election.
  • The White House and McCarthy's office didn't respond to requests for comment.

Between the lines: A person who spoke with Trump yesterday said that while he would never use the word "regret" about scuttling the negotiations, they got the strong impression that Trump realized he had messed up tactically.

  • Trump himself immediately backtracked in a series of tweets later on Tuesday, trying to portray himself as willing to deal and to portray Pelosi as the intransigent one.

The catch: Trump may want a big deal — one where he'd spend several trillion dollars to help himself get re-elected — but that was never going to fly with Senate Republicans. They've long been wary of yet another massive pandemic relief package after all of the money Congress has already spent.

The latest: Trump, during an interview on Fox Business Thursday, said his team was "starting to have some very productive talks" on a bill.

  • "I said, look, we're not getting anywhere: Shut it down. I didn't want to waste time. But in any event, we got back — both sides very capable — we got back, we started talking again," the president continued. "And we're talking about airlines and we're talking about a bigger deal than airlines. We're talking about a deal with $1,200 per person, we’re talking about other things."

What's next: Democrats and Republicans are still hundreds of billions of dollars apart and disagree on what's needed in the bill, and with only 26 days until Nov. 3, an agreement by Election Day is still widely seen as unlikely.

Go deeper

Kudlow says he's "very disappointed" in Trump's treatment of Pence

Larry Kudlow. Photo: Alex Wong via Getty

White House economic adviser Larry Kudlow criticized President Trump’s response to last week's U.S. Capitol siege and his treatment of Vice President Mike Pence in the aftermath of the 2020 election, in an interview with The Wall Street Journal on Friday.

The big picture: Trump has lost support from a number of top aides and allies since a mob of his supporters stormed the Capitol building on Jan. 6, resulting in five deaths. Kudlow is the latest to publicly speak out against the president.

Cyber war scales up with new Microsoft hack

Illustration: Aïda Amer/Axios

Last week's revelation of a new cyberattack on thousands of small businesses and organizations, on top of last year's SolarWinds hack, shows we've entered a new era of mass-scale cyber war.

Why it matters: In a world that's dependent on interlocking digital systems, there's no escaping today's cyber conflicts. We're all potential victims even if we're not participants.

Miriam Kramer, author of Space
17 mins ago - Science

Spaceflight contests and our future in orbit

Illustration: Aïda Amer/Axios

Wealthy private citizens are increasingly becoming the arbiters of who can go to space — and some of them want to bring the average person along for the ride.

Why it matters: Space is being opened up to people who wouldn't have had the prospect of flying there even five years ago, but these types of missions have far-reaching implications for who determines who gets to make use of space and for what.

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