WASHINGTON – The Trump administration expressed support on Tuesday for sending direct cash payments to Americans as part of a massive economic stimulus package of around $850 billion, which the White House hopes could stanch the economic free fall caused by the coronavirus.
“We’re looking at sending checks to Americans immediately,” Treasury Secretary Steve Mnuchin said Tuesday at a briefing. “And I mean, now in the next two weeks.”
The White House’s support of this idea, which has won backing from Democrats and some Republicans in Congress, shows how fast talks are evolving. President Donald Trump had initially supported a payroll tax holiday, but said Tuesday that would take too long to deliver relief to Americans.
“Payroll tax is one way, but it does come over a period of months, many months,” Trump said. “And we want to do something much faster than that. So I think we have ways of getting money out pretty quickly and very accurately.”
Some lawmakers, including Sen. Mitt Romney, R-Utah, have discussed direct cash payments of $1,000, which Romney and Mnuchin discussed Monday night.
“That’s one of the ideas we like,” Mnuchin said Tuesday, without endorsing a specific number.
Mnuchin will discuss details with Senate Republicans later Tuesday. The package would be mostly devoted to flooding the economy with cash, officials said, with some $50 billion directed specifically to helping the airline industry.
White House officials also want to include more assistance for small businesses and their employees in the legislation, the officials said. The officials spoke on condition of anonymity to discuss internal deliberations. The talks have taken on more urgency as the economy has shown signs of careening into recession. The Dow Jones industrial average fell almost 3,000 points on Monday and showed signs of a slight rebound on Tuesday.
“We’re giving relief to affected industries and small businesses, and we’re ensuring that we emerge from this challenge with a prosperous and growing economy, because that’s what’s going to happen,” Trump said at a press briefing Tuesday with the government’s coronavirus task force.
“It’s going to be big, it’s going to be bold, and the level of enthusiasm to get something done I don’t think I’ve seen anything quite like it.”
The $850 billion package would come in addition to another $100 billion-plus package passed by the House that aims to provide paid sick leave, unemployment insurance and other benefits for impacted workers, though some details of that legislation remained fluid as it moves through Congress.
But there is emerging tension between the White House’s approach and the bills Democrats are trying to advance. White House officials are leaning hard into the idea of tax cuts and industry assistance, while Democrats have said their proposals are focused more on helping workers, health care providers, schools, and senior citizens.
Mnuchin would like to see the new package pass the Senate by the end of the week, he told senators Monday evening in a meeting at the Capitol.
Speaking on the Senate floor Tuesday, Senate Majority Leader Mitch McConnell, R-Ky., said he anticipated “urgent talks” later Tuesday with Mnuchin on the emerging package, which McConnell said should provide direct aid to workers and families, help for the economy overall and in particular small businesses, and more assistance for the public health system and medical personnel.
“It’s my intention that the Senate will not adjourn until we have passed significant and bold new steps above and beyond what the House has passed to help our strong nation and our strong underlying economy weather this storm,” McConnell said.
Sen. Marco Rubio, R-Fla., said aid to airlines was likely to be included. “We still need to get people around the country. I have no doubt that’s going to be a major feature of the next step.”
It’s unclear how warmly the design of the White House’s proposal will be received. Senate Republicans are meeting with Mnuchin on Tuesday. Senate Democrats, meanwhile, are gathering on a conference call to discuss their strategy. Senate Minority Leader Chuck Schumer, D-N.Y., is expected to outline his $750 billion proposal and contrast it with the White House’s approach. Schumer’s offering would expand unemployment insurance, provide money for schools, public transportation, expand Medicaid funding, expand more investments in health care, provide loan assistance, and halt evictions and foreclosures, among other things.
“We need big, bold immediate federal action to deal with the crisis,” Schumer said Monday.
Democrats have complained that the White House’s push so far has relied on seeking tax cuts and industry bailouts.
Trump has for several weeks pushed Congress to cut or eliminate the payroll tax, which is paid by employees and employers and funds Social Security and Medicare benefits. Many Democrats have complained that such a tax cut would not necessarily directly benefit people who have lost jobs because of the coronavirus crisis.
On Tuesday, Trump began to show signs of distancing himself from the idea, suggesting that such a change would take too long to deliver needed funds to Americans.
Instead, the White House is now endorsing the plan of sending direct payments to Americans, though it’s unclear what scale they are looking to endorse.
Two Senate Republicans, Romney and Tom Cotton of Arkansas, have backed this approach in recent days. The idea of direct cash payments has also gained traction in liberal circles, with former Obama administration economist Jason Furman lobbying congressional Democrats to adopt similar proposals.
“I think it is terrific President Trump has come around to the idea that Americans should get checks. They shouldn’t have to go to a workplace to get it,” said Jason Furman, an Obama administration economist who has been pushing the idea with congressional Democrats. “This should be a commonsense, bipartisan idea … I hope it becomes law by the end of the week.”
The attempt to inject a massive amount of money into the economy is reminiscent of the bailouts and stimulus steps Congress took during the economic crisis more than a decade ago. This time around, with everyday life in America screeching to a halt, the intervention may need to be faster and even more extreme. In 2008, Congress passed a $700 billion package, called the Troubled Asset Relief Program, to try and rescue the financial system.
The package the White House is pursuing now would be bigger, not adjusted for inflation, but it would include things like tax cuts that the 2008 program lacked.
Still, the economic fallout from the current crisis only appears to be gaining momentum. Many schools have closed around the country, and the federal government told Americans on Monday to limit gatherings of more than 10 people. Trump warned a recession could be on the horizon.
The massive package now under consideration would be the third step Congress has taken as it moves rapidly to address aspects of the pandemic.
Earlier this month, Congress approved $8.3 billion in emergency spending for public health programs, and last week the House passed a package with paid sick leave, unemployment insurance, money for food stamps, free coronavirus testing and more. That legislation must still pass the Senate after the House approved modifications late Monday that were billed as “technical corrections” but actually scaled back the sick leave provisions.
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The Washington Post’s Paul Kane contributed to this report
Video: http://www.washingtonpost.com/video/politics/americans-need-cash-now-mnuchin-announces-plans-to-send-businesses-coronavirus-support-payments/2020/03/17/ce7808d5-01b3-463d-9ecd-752f08064bb6_video.html(The Washington Post)
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