Trump: Go big on virus stimulus package
WASHINGTON — The Trump administration called on Tuesday for urgent action to speed $1 trillion into the economy, including sending $250 billion worth of checks to millions of Americans at risk of losing their livelihoods, as the United States government prepared to wield its most powerful tools to buttress an economy that faces the threat of a recession as the coronavirus pandemic spreads.
The Federal Reserve took the rare step of unleashing its emergency lending powers and President Donald Trump called on Congress to quickly approve the sweeping economic stimulus package, dispatching his Treasury secretary to Capitol Hill to begin hammering it out, as large sections of the economy shut down and companies began laying off workers.
With markets experiencing levels of volatility not seen since the 2008 financial crisis, the White House vowed to use every weapon at its disposal to combat the crisis.
“We want to go big,” Trump said at a news conference at the White House,
adding that he had instructed the Treasury secretary, Steven Mnuchin, to introduce measures that would provide more immediate economic support over the payroll tax cut holiday that he had been promoting.
During lunch on Capitol Hill not long after, Mnuchin privately told Republican senators that he envisioned the direct payments covering two weeks of pay and going out by the end of April, according to three people familiar with the discussion who described it on the condition of anonymity. Additional checks would be possible if the national emergency persists, Mnuchin told the group.
Hopes for a more powerful stimulus package combined with the move from the Federal Reserve to keep credit flowing to households and businesses by buying up commercial paper, short-term promissory notes companies use to fund themselves helped markets bounce back on Tuesday from their worst day in decades. The S&P 500 rose about 6%, rebounding from a 12% collapse on Monday, which was its steepest drop since 1987.
With anxiety over the virus rising around the country and in the Capitol, Trump and his advisers tried to play down fears of a federally mandated nationwide quarantine or speculation that Wall Street could go dark.
“We absolutely believe in keeping the markets open,” Mnuchin said. “Americans need to know they have access to their money.”
In another extraordinary move, Mnuchin said Trump instructed him to allow for the deferment of income tax payments, interest free and penalty free, for 90 days. People can defer up to $1 million and corporations can defer up to $10 million in payments.
The Treasury secretary said that would temporarily inject $300 billion into the economy, cushioning the blow of lost wages and customers.
The aggressive series of actions came on a day when much of the country seemed to grind to a halt, with daily rituals like commuting and dining out replaced by hunkering down at home. The death toll from the novel coronavirus rose to 100 in the United States, with 5,600 cases confirmed and, with the first case reported in West Virginia, the disease present in all 50 states.
After the briefing at the White House by Trump and his coronavirus task force, Mnuchin went to Capitol Hill where he told Republican senators at their weekly lunch that the Trump administration wanted Congress to infuse about $1 trillion in additional stimulus to prop up the economy. While Trump had signaled that he wanted the payroll tax to be the centerpiece of that effort, it faced bipartisan opposition in Congress, and Mnuchin said time was of the essence.
“This is a very unique situation in this economy,” Mnuchin said after the meeting, where he faced questions from more than a dozen individual senators. “We have put a proposal on the table that would inject a trillion into the economy.”
The Treasury secretary declined to share details of his proposal, including a dollar figure for the direct payments to Americans, but said the administration would work with Congress to ensure that a combination of loans, direct checks and other support for businesses and workers can be put in place quickly.
“It is a big number,” Mnuchin told reporters on Capitol Hill, describing the checks that would be delivered to households across the country. Earlier at the White House, he said the proposal would be targeted so it would not go to the highest earners, such as those making $1 million or more.
The administration has been negotiating with lawmakers in the House and Senate over the timeline and contents of a stimulus package. Republicans had been reluctant to embrace a narrower relief package the House passed early Saturday that includes paid leave, unemployment insurance, free coronavirus testing and additional food and health care aid, which Mnuchin and Speaker Nancy Pelosi have characterized as a first step to provide relief ahead of a broader stimulus plan to stabilize the economy.