How close are Nancy Pelosi and Steve Mnuchin on a Phase 4 deal? CBS reports that they’re closer than ever … physically, anyway. Apparently the House Speaker and Treasury Secretary met in person for the first time last night to discuss the standoff over the stalled COVID-19 relief bill. That follows a failed attempt to get together on an agreement yesterday, CNBC had reported, to which we’ll return in a moment.

Today’s meeting might not have brought them together any closer fiscally, however. House Democrats are still preparing a vote on Pelosi’s latest proposal, a $2.2 trillion package that Senate Republican have already declared DOA:

Even that had a silver lining, however. Pelosi did agree to delay the vote on the basis of the movement in the talks yesterday:

U.S. Treasury Secretary Steven Mnuchin on Wednesday said talks with House Speaker Nancy Pelosi made progress on COVID-19 relief legislation, and the House of Representatives postponed a vote on a $2.2 trillion Democratic coronavirus plan to allow more time for a bipartisan deal to come together. …

She said the House would vote late on Wednesday on a $2.2 trillion updated Heroes Act “to formalize our proffer to Republicans in the negotiations to address the health and economic catastrophe in our country.”

But later Wednesday that vote was postponed until Thursday. Lawmakers are “giving one more day for a deal to come together,” a Democratic aide said, speaking on condition of anonymity.

That silver lining has its own dark cloud, however. CNBC reported last night that the sticking points haven’t changed since late July. Pelosi wants massive bloc grants for state and local governments, and Senate Republicans want liability protection for businesses reopening in the pandemic:

The House speaker said she and Mnuchin had an “extensive conversation” and “found areas where we are seeking further clarification.” Entering the talks, Mnuchin said the White House and Democrats had reached common ground on issues including direct payments, small business loans and airline aid. But reports indicate they still need to resolve disputes over state and local government aid and liability protections for businesses, among other topics.

Pelosi and Mnuchin met in person for the first time since last month, raising hopes of Congress approving more aid to boost the U.S. economy and health-care system before the Nov. 3 election. Both officials sounded more optimistic about the prospect of a deal earlier Wednesday as Mnuchin prepared to offer a roughly $1.5 trillion package to counter the Democrats’ proposal.

In fact, the package might be getting worse rather than better. Democrats threw in a few more items in its “HEROES Act” that are clearly poison pills, and which will only make negotiations more difficult. In fact, Democrats already know they’re non-starters from the CARES Act negotiations:

A stimulus package proposed by Democrats in the House of Representatives includes a number of items that will benefit illegal immigrants — including an expansion of stimulus checks and protections from deportations for illegal immigrants in certain “essential” jobs.

The $2.2 trillion bill includes language that allows some illegal immigrants — who are “engaged in essential critical infrastructure labor or services in the United States” — to be placed into “a period of deferred action” and authorized to work if they meet certain conditions.

It also grants protections to those employers who hire those undocumented immigrants, ordering that “the hiring, employment or continued employment” of the defined group is not in violation of the Immigration and Nationality Act. That lasts until 90 days after the public health emergency is ended.

A Democratic description of that part of the bill says that “such workers are deemed to be in a period of deferred action and to be authorized for employment, and employers are shielded from certain immigration-related violations for employing such workers.”

It’s language that was included in the first House Democratic stimulus bill proposed back in May — a bill that was ultimately rejected in the Republican-controlled Senate.

The only changes thus far are in the toplines, mainly accomplished by changing the dials on state and local aid. Mnuchin came up to $1.62 trillion last night, including the bloc grants as well as the liability protection:

Treasury Secretary Steven Mnuchin offered a $1.62 trillion COVID-19 relief proposal in talks with Speaker Nancy Pelosi on Wednesday, offering more state and local assistance than GOP negotiators have to date in a sign of potential progress toward a deal.

A person briefed on Mnuchin’s plan said it included $250 billion for state and local governments, which is $186 billion less than Democrats want in their latest $2.2 trillion package, but $100 billion more than the White House offered in talks that broke down over the summer.

On unemployment insurance, Mnuchin proposed a $400 per week federal benefit, retroactive to Sept. 12 and lasting through Jan. 1, 2021, according to the source, who described the package on condition of anonymity. That’s less than the $600 a week Democrats want, but $100 more than Senate Republicans have proposed.

It also includes a second round of direct stimulus payouts, which Senate Republicans excluded from their “skinny” Phase 4. On that there now seems to be nearly unanimous agreement, but Mitch McConnell isn’t happy about spending much more than that:

Senate Majority Leader Mitch McConnell, R-Ky., discarded the likelihood of a coronavirus relief bill Wednesday saying Democrats still want too much money as bipartisan talks at the Capitol failed to produce an agreement.

“I think it’s safe to say we’re far apart,” McConnell said Wednesday as House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Munchin met to hammer out a deal.

“We are very, very far apart,” he added.

About $600 billion or so, actually. If Pelosi can’t get a deal by this afternoon, she may have to call the vote and let Phase 4 fail entirely. Her members have been stuck in DC waiting for her to reach a deal, thanks to her decision to keep the House in session while negotiating for it. A vote on her current proposal would be an admission of failure and a declaration that the talks are over.

Of course, the Problem Solvers caucus could still try to use a discharge petition to demand a vote on their bipartisan proposal. That’s a wildcard worth watching.