US set to go for $2tn stimulus to boost economy
NEW YORK: The Trump administration struck a deal with Senate Democrats and Republicans on a historic rescue package with more than $2 trillion in spending and tax breaks to bolster the hobbled US economy and fund a nationwide effort to stem the coronavirus.
“At last we have a deal,” Senate Majority Leader Mitch McConnell said early on Wednesday on the chamber’s floor. “I’m thrilled that we’re finally going to deliver to the country.”
Senate Democratic leader Chuck Schumer, who engaged in marathon negotiations with Treasury Secretary Steven Mnuchin, called it an “outstanding agreement”.
The legislation was still being drafted and there were few details on all the provisions agreed to, especially related to the specific terms of the bailout and loan terms for companies.
Lawmakers are awaiting a final text of the bill ahead of a vote that McConnell promised would be held later in the day.
It would still have to pass in the
House before it gets to President Donald Trump’s desk. House Speaker Nancy Pelosi, who had consulted with Schumer throughout the negotiations, has previously indicated she would act to move the bill quickly.
“This bipartisan legislation takes us a long way down the road in meeting the needs of the American people,” Pelosi said in a statement on Wednesday.
The outline of the plan
THE STIMULUS INCLUDES A $500 BILLION FUND TO HELP HARD-HIT INDUSTRIES AND DIRECT PAYMENTS TO MILLIONS OF US FAMILIES
includes about $500 billion that can be used to back loans and assistance to companies, including $50 billion for loans to US airlines, as well as state and local governments. It also has more than $350 billion to aid small businesses. Then there is $150 billion for hospitals and other healthcare providers for equipment and supplies.
For individuals the package provides direct payments to lowerand middle-income Americans of $1,200 for each adult, as well as $500 for each child. Unemployment insurance would be extended to four months, the benefits would be bolstered by $600 weekly and eligibility would be expanded to cover more workers.
The bill provides a tax credit for companies who retain employees even if they’ve been mandated to close or seen a significant drop-off in business. Student loan borrowers who get assistance from their employers on paying those back don’t have to pay income tax on the aid.
Democrats demanded and won a series of restraints on corporations that would benefit from loans or investments from the
Treasury Department, as well as an oversight mechanism for who gets money. Any company receiving a government loan would be subject to a ban on stock buybacks through the term of the loan plus one additional year. They also would have to limit executive bonuses and take steps to protect workers. The Treasury Department would have to disclose the terms of loans or other aid to companies and a new Treasury inspector general would oversee the lending program.
Notably, Democrats won language that would bar any business owned by Trump or his family from getting loans from Treasury.
With the prospect that Congress was closing in on a deal Tuesday, the Dow Jones Industrial Average rose more than 11% in its biggest advance since 1933, and the S&P 500 rebounded with the biggest one-day gain since October 2008 after starting the week with a rout. In Asia markets, US futures pared early losses after news of the deal.
The size of the stimulus is unprecedented, dwarfing the nearly $800 billion Obama stimulus that passed 5 months after the 2008 financial crash. The proposal is the third and biggest plan by Congress to confront the coronavirus crisis.