Agency plans $2.99 trillion of borrowing
Debt covers virus response; states, Senate back to work
The U.S. Treasury Department plans to borrow $2.99 trillion from April through June to cover the federal government’s response to the coronavirus pandemic, issuing a tremendous level of debt to try to limit the economic effect on U.S. businesses and workers.
Last year, the Treasury Department borrowed $1.28 trillion over 12 months. Its plan to borrow almost $3 trillion would be enacted over three months.
“This is just a recurring experience — which is, you
look at the numbers, and they’re bigger than you ever imagined could be possible,” said Douglas Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office. “And then you look at the size of the problem and you think that’s perfectly justified.”
Congress has approved nearly $3 trillion in new spending in the past two months to try to arrest the economic fallout of the crisis. Because revenue levels are falling, the Treasury Department is planning to issue large amounts of debt to cover these costs.
The department said it planned to borrow an additional $677 billion from July through September.
The large spike in debt issuance is meant to cover the cost of government assistance to individuals and businesses, the deferral of individual and business taxes until July, and an increase in the assumed end-ofJune cash balance for the Treasury Department.
These figures take into account only legislation that has been passed to date, senior treasury officials said Monday. An expansion in government relief, or the passage of additional legislation, could spur the department to increase borrowing later in the year.
“My expectation is that we will see something else,” said Michael Strain of the American Enterprise Institute. “It’s reasonably likely that the economy is going to need significant government support for many, many months … that is going to have to change as the public health situation changes and evolves.”
Interest rates are very low, making it relatively cheap for the government to borrow money. President Donald Trump has said the government should take advantage of low interest rates to issue even more debt and expand things like infrastructure spending.
But some Republicans have already begun expressing reticence about approving more spending, raising concerns about the roughly $25 trillion in existing government debt.
There has been largely bipartisan support for the sharp increase in spending so far, with lawmakers from both parties arguing it was necessary to try to prevent an economic collapse. Lawmakers have approved government support for businesses and households particularly for the period when many businesses were closed and Americans were encouraged to stay home, though most of the financial assistance programs were designed to last for just a short period of time.
STATE REOPENINGS
Meanwhile on Monday, there were more scattered reopenings in the U.S. The moves to reopen states came even as the country’s total number of cases neared 1.2 million and the death toll climbed to about 69,000, according to Johns Hopkins University.
Dozens of people in Florida waited before sunrise for the 7 a.m. opening of Clearwater Beach. And a shuttered pork processing plant in South Dakota took its first steps toward reopening after more than 800 employees were infected with the coronavirus.
In Louisiana, state lawmakers were restarting the Legislature
— but feuded over whether they should return at all. Republican legislators irritated by Democratic Gov. John Bel Edwards’ decision to extend the state’s stay-at-home order through May 15 were eager to return to work. Democrats saw things differently.
“It could be a devastating blow to the strides made and to the safety of our residents, our staff and members if we returned to business as usual prematurely,” Democratic leaders wrote in a letter.
In Florida, where Republican Gov. Ron DeSantis said restaurants and retail shops could open at 25% capacity beginning Monday, some business owners were unsure how to feel.
Tony Loeffler, the owner of Atlas Body and Home, a men’s apparel and lifestyle shop in downtown St. Petersburg, said he was both apprehensive and excited.
“We feel like we have to do this, even though we feel a little conflicted,” he said. “But we’re practicing all the common sense and CDC requirements, so I feel like on our end we’re safe. But it’s so hard to know how everyone else is, how seriously they’re taking it.”
California Gov. Gavin Newsom, a Democrat and one of the first U.S. governors to impose a statewide stay-home order, announced that some businesses will receive permission to reopen as early as Friday, with restrictions.
The phased-in plan allows clothing and sporting goods stores, florists and other retailers
to resume operations with curbside pickup. In-restaurant dining and office reopenings are still prohibited.
Often, it was unclear just what would reopen.
In the Atlanta suburb of Kennesaw, the giant Town Center at Cobb mall reopened Monday, but many stores remained closed, with dark interiors and locked gates at Starbucks, Victoria’s Secret and other shops.
A maze of one-way paths wound through the eating area, marked off with signs and blue electrical tape stuck to the floor. But policies were inconsistent.
The four workers at the Chick-fil-A counter all wore masks, and customers stood on black X’s about 6 feet apart as they waited to order. Next door at the American Deli, workers did not wear masks Monday morning, and there were no marks for customers to stand apart. By afternoon, some employees were wearing masks.
In Early County, Ga., which has one of the highest death rates for covid-19 in the U.S., a hospital official said it worries her that Georgia has been so aggressive about reopening businesses.
“I’m very concerned,” said Ginger Cushing from LifeBrite Community Hospital, noting that over the weekend, it was “like back to normal just looking at the amount of cars on the road and people in food places. They’re still standing outside and maintaining social distance, but it’s just a lot busier.”
The city of Miami Beach, Fla., closed seaside South Pointe
Park after too many people refused to wear face masks or remain socially distanced over the weekend.
Carnival Cruise Line, which saw a series of high-profile outbreaks on its ships, announced it will start cruises again in August, leaving from Florida and Texas. The Caribbean trips will be the company’s first since the pandemic forced a near-total pause in the global cruise industry.
SENATE RECONVENES
The U.S. Senate returned Monday to a Capitol largely shuttered by the coronavirus, but prospects for quick action on a new aid package are uncertain with a deepening debate over how best to confront the pandemic and its economic devastation.
The 100 senators are convening for the first time since March, while the House is staying away because of the health risks. The Washington area remains a virus hot spot under stay-at-home rules.
Senate Majority Leader Mitch McConnell, R-Ky., opened the session, defending his decision to focus the agenda on confirming Trump’s nominees rather than on the virus outbreak.
“We have important work to do for the nation,” McConnell said. He said the Senate would “show up for work like the essential workers that we are.”
Senate Republicans are trying to set the terms of debate, after House Speaker Nancy Pelosi, D-Calif., was able to fill up previous aid bills with
Democratic priorities. They’ve expressed reluctance about unleashing more federal funds and hope that Trump’s push to kickstart the economy will reduce the need. But Pelosi is marching ahead without them, assembling a new aid package that Democrats expect to unveil soon.
Senate Democratic leader Charles Schumer, meanwhile, decried the decision to call senators and staff members back to Washington without confronting the crisis. He called it “one of the strangest sessions of the United States Senate in modern history.”
For more than five weeks, the covid-19 crisis has all but closed Congress, a longer absence than during the 1918 Spanish flu.
CHINA’S CRITICISM
Also on Monday, China’s official Global Times newspaper said Secretary of State Mike Pompeo was making “groundless accusations” against Beijing by suggesting Sunday that the coronavirus was released from a Chinese laboratory.
The populist tabloid published by the ruling Communist Party mouthpiece People’s Daily said the claims were a politically motivated attempt to preserve Trump’s presidency and divert attention from the U.S. administration’s own failures in dealing with the outbreak.
“As the U.S. presidential election campaigns are underway, the Trump administration has implemented a strategy designed to divert attention from the incompetence it has displayed in fighting the pandemic,” the paper said in an editorial.
The paper has made the U.S.’ top diplomat a main target of its attacks, in recent weeks describing Pompeo as “despicable” and of having “evil intentions” by blaming China for having caused the pandemic.
While the virus is believed to have originated in the central Chinese city of Wuhan, most scientists say it was likely transmitted from bats to humans via an intermediary animal such as the armadillo-like pangolin. That has placed the focus on a wet market in the city where wildlife was sold for food.