Trump warns of possible recession
The pandemic could have a ‘potentially devastating’ effect, the US Chamber of Commerce said
WASHINGTON: With stock markets taking brutal losses, US President Donald Trump acknowledged the US economy “may be” moving towards a recession on Monday.
“The market will take care of itself,” Trump told reporters at a briefing, adding: “The market will be very strong as soon as we get rid of the virus.”
His comments come just hours after representatives of US businesses urged Trump and top lawmakers to take “swift, aggressive action” as the nation’s economy is threatened by the ongoing coronavirus pandemic.
The pandemic could have a “potentially devastating” effect, the US Chamber of Commerce said on their website on Monday.
“The biggest issue facing businesses now is a lack of revenue due to a sudden and sharp drop in demand,” according to the powerful lobbying group. “Without assistance, that likely will force some businesses to choose among difficult options: pay workers less, not at all, or shut down altogether.”
First step: Tax break
The group listed measures needed to avert the blow in a letter to Trump and other political leaders.
The first step would be to cancel all payroll taxes – the taxes which go to Social Security, Medicare and unemployment insurance – in March, April, and May, according to the group. The move would give “more breathing room” to employers to avoid layoffs.
The association also calls for expanding and streamlining loan programs for small businesses and more facilities for big companies to borrow money.
Countries including Germany and Norway have already pledged billions to keep their economies afloat as the stock market tumbles.
This weekend, the US Congress passed a bill that could provide two weeks of paid sick leave to workers in most small and midsize companies. The measure would only cover coronavirusrelated sich leave in the next 12 months, according to an American newspaper.
The bill would still need to go through the US Senate and be signed by president before going into effect.
‘Let’s keep going’
In a letter sent ahead the Congress vote, the US Chamber of Commerce warned against creating “a federal, one-size-fits-all, permanent leave mandate on employers” in the emergency bill.
“Those are longer-term issues that should be addressed in separate legislation,” the Chamber’s senior represenative Neil Bradley wrote.
In the Monday statement, the businesses lobbying group praised Congres for taking “some steps in the right direction.”
“Let’s keep going,” the Chamber’s CEO Tom Donohue was quoted as saying.
“We need big, bold policy moves now to ensure businesses continue to function, meet payroll, and keep American workers employed.”
Also on Monday, the top ranking Democrat in the US Senate, Chuck Schumer, was floating a new aid package worth $750 billion (€672 billion) aimed to boost businesses and healthcare industry alongside other direct aid for the US households, according to a news agency.