WASHINGTON: US President Donald Trump wants a “big, bold” economic stimulus package to shelter the economy from the economic fallout expected due to the strict health measures implemented to slow the spread of coronavirus.
Negotiations are ongoing on Capitol Hill between lawmakers and with the administration on aid packages. Treasury Secretary Steven Mnuchin told reporters proposals could “inject” $1 trillion into the US economy.
Mnuchin said the federal government is looking at supplying liquidity to businesses so they can survive the crisis, and additionally may send cash directly to US citizens, to help people who are going to be struggling to make ends meet, in part as they face job losses.
“We are looking at sending cheques to Americans immediately,” Mnuchin said, indicating this means in the next two weeks. “Americans need cash now,” he added. Mnuchin said this would be a quicker fix than a payroll tax break that Trump had previously touted.
The Federal Reserve announced a special purpose vehicle to facilitate emergency lending, saying it will buy high-grade commercial paper, in a bid to keep short-term credit markets functioning. Commercial paper refers to short-term unsecured debt issued by companies.
By eliminating much of the risk “this facility should encourage investors to once again engage in term lending in the commercial paper market,” the Fed said, borrowing from the 2008 financial crisis playbook. It already cut interest rates to near zero at the weekend.
Other measures under consideration in Washington include loans to small businesses and bailouts for industries, with the airline industry and hotels already saying they are being hard hit as people cease travel.
Mitch McConnell, the leader of the Republicans in the Senate, said lawmakers are working on multiple aid packages and vowed that Congress would “not be leaving town” until legislation was passed.
He noted the extremely unique situation of the US government effectively shutting down the economy for health reasons.
Progressives in Congress are pushing to get more to workers. Senator Elizabeth Warren said she would not accept “no-strings-attached bailouts that enrich shareholders or pay CEO bonuses.” The news came after a $14-billion package was approved by the World Bank and the International Finance Corporation on Tuesday. “This package provides urgent support to businesses and their workers to reduce the financial and economic impact of the spread of COVID-19,” World Bank Group president David Malpass said in a statement.
The pack strengthen national systems for public health preparedness,including for disease containment, diagnosis, and treatment, and support the private sector, the statement said.
On the same day, New York City indicated it may join other cities that are implementing a “stay-in-place” order, which would severely restrict movement.
New York City and other localities have already shut their bars and restaurants, except for take-away service. Areas of California,including San Francisco, announced orders for residents to remain at home, unless absolutely necessary.
Trump told the daily briefing that he recommended people should “just enjoy their living room” and appeared to approve of peer-pressure methods to get people to enact social distancing.
The emphasis now is on getting younger people to stick to the rules,to help lower the spread, amid signs of a cavalier attitude among those who think they will not get seriously ill.
The federal government is urging people to avoid all gatherings of more than 10 people, eating in restaurants and bars, and discretionary travel. People should try to work from home and keep school children at home, when possible, and to not leave the house when ill.
There are signs big retail outfits are also facing stresses as people stay home and do not shop, and as consumption slows amid uncertainty.
“We will use all the powers we have,” Mnuchin said regarding efforts to shelter the economy. — dpa
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