Former acting White House chief of staff Mick Mulvaney told "Your World" Thursday Treasury Secretary Steve Mnuchin "is right to be fighting" back against a coronavirus stimulus bill passed by the Democrat-controlled House of Representatives, which Mulvaney called a "$3 trillion absurdity."

"The bottom line here is whatever they do spend is going right to the bottom line in terms of the debt, to the deficit and the interest payment responsibilities for the next generation," Mulvaney said. "So I think they're right to sort of take a deep breath and say, 'Wait a second. Do we really need to spend this much money?'"

Congressional negotiations over a so-called "Phase 4" stimulus bill are at a standstill despite agreement among Republicans and Democrats that additional aid is needed for American families and businesses affected by the pandemic.

White House chief of staff Mark Meadows said Wednesday the two sides are "miles apart."

"There's a lot of politics behind this, Neil," Mulvaney told host Neil Cavuto. "Believe it or not, Nancy Pelosi really doesn't want to see Donald Trump elected, and if she can try and make a political issue here and make hay, she's absolutely going to do that.

"I actually think you'd see them be talking about a smaller package if there were a Democrat in the White House, because they understand what the cost is," he added. "And the proof of that is, that's what they did the last time we went down this road [during the 2008 financial crisis] ... People are not going to be left out in the cold."

Mulvaney, who is currently serving as U.S. special envoy to Northern Ireland, added that in addition to presenting an economic and health care crisis, the coronavirus pandemic has "a huge psychological component."

"I think one of the reasons I think you're seeing some optimism still in the markets is that good news on a vaccine or good news on a therapeutic could change people's psychology," he said, later adding, "If people were not as afraid to go back to work, you could see things turn around clearly."

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Turning to the November presidential election, Cavuto asked Mulvaney if he really thought the economy would crumble if Joe Biden were elected president.

"Yeah, I actually do," Mulvaney replied. "And I don't think you have to take the president's word for it. You can actually take Joe Biden's word for it."

"Go back and look at the last Biden-Obama budget ..." he said. "Biden thought the unemployment would be higher. They thought growth would be lower. They didn't know how to get to two-and-a-half or three-and-a-half or three percent growth. They were just, they were talking about that new normal. The country was graying. Productivity was down permanently. It was anemic outlook on the future of the country. Remember, they were there eight years."