Trump inks addition of $484 billion in aid

WASHINGTON — President Donald Trump signed a $484 billion bill Friday to aid employers and hospitals under stress from the coronavirus pandemic that has killed more than 50,000 Americans and devastated the economy.

Meanwhile, the latest projection from the Congressional Budget Office, released Friday, states the U.S. deficits will mushroom to $3.7 trillion in 2020, fueled by the four coronavirus relief bills.

A fifth bill is already in the works, and will be “expensive,” according to House Speaker Nancy Pelosi, D-Calif.

The deficit for 2021 is estimated to tally $2.1 trillion, double previous budget office estimates.

The bill signed by the president Friday is the latest effort by the federal government to help keep afloat businesses that have had to close or alter their operations as states try to slow the spread of the virus. Over the past five weeks, roughly 26 million people have filed for jobless aid, or about 1 in 6 U.S. workers.

Trump thanked Congress for “answering my call” to provide the critical assistance and said it was “a tremendous victory.”

During a White House briefing Friday, Trump spoke

optimistically of the economy but also asked people to continue social-distancing and using face coverings.

The coronavirus has killed more than 195,000 people worldwide as of Friday, according to a count compiled by Johns Hopkins University from government figures.

The U.S. death toll from the coronavirus surpassed 51,000 on Friday, more than a quarter of all the virus-related deaths reported worldwide and quickly approaching the number of Americans — 58,200 — who died during the Vietnam War.

Trump said most of the funding in the bill would flow to small businesses through the Paycheck Protection Program, which provides money to small businesses to keep workers on their payrolls.

“Great for small businesses, great for the workers,” Trump said.

The measure passed Congress almost unanimously Thursday as lawmakers gathered in Washington as a group for the first time since March 27.

Anchoring the bill is the Trump administration’s $250 billion request to replenish a fund to help small- and medium-size businesses with payroll, rent and other expenses. This program provides forgivable loans so businesses can continue paying workers while forced to stay closed for social distancing and stay-athome orders.

The legislation contains $100 billion for hospitals and a nationwide testing program, along with $60 billion for small banks and an alternative network of community development banks that focus on development in urban neighborhoods and rural areas ignored by many lenders. There’s also $60 billion for small-business loans and grants delivered through the Small Business Administration’s existing disaster-aid program.

Passage of more coronavirus relief is likely in the weeks ahead. Supporters are already warning that the business-backed Paycheck

Protection Program will exhaust the new $250 billion almost immediately. Opened just weeks ago, the program quickly reached its lending limit after approving nearly 1.7 million loans.

Pelosi and allies said the next measure will distribute more relief to individuals, extend generous jobless benefits into the fall, provide another round of direct payments to most people and help those who are laid off afford continued health insurance through a federal program known as COBRA.

BIPARTISAN RIFTS

The bipartisan urgency that forced consensus on the first four laws appears to have splintered.

Democrats, for example, have made clear that the four new laws aren’t nearly enough. Pelosi said at a news conference Friday that House Democrats would move quickly to advance the next rescue bill, which she said would include a generous financial commitment to cities and states that could match what has already been done to help small businesses — close to $700 billion.

Along with other priorities Democrats have discussed, including an additional extension of unemployment insurance and another round of stimulus checks to Americans, the price tag on Democrats’ next bill could rival the $2 trillion Coronavirus Aid, Relief and Economic Security Act passed in late March.

“There will be a bill and it will be expensive and we look forward to doing it as soon as possible because jobs are at stake,” Pelosi said.

But there was scant evidence Senate Republicans would back Pelosi’s approach. Majority Leader Mitch McConnell, R-Ky., has said it’s time to stop spending money and assess what’s already been done, and that any additional legislating should wait at least until lawmakers return

to the Capitol. That’s currently scheduled to happen May 4, though it’s uncertain if that deadline can be met.

Washington is under a stay-at-home order through May 15 with Mayor Muriel Bowser saying the virus is expected to peak in the district in May.

Congressional Republicans also have increasingly begun to voice concerns about the rising budget deficit, something that irritates Democrats who counter that Republicans passed a $1.5 trillion tax cut in 2017 that has added to the deficit for several years.

“The fact that states like Illinois and California have spent like drunken sailors should not penalize taxpayers in the other states who’ve lived within their means,” Sen. Ted Cruz, R-Texas, told The Washington Post on Friday.

AID FOR CITIES, STATES

Of all the ideas being discussed, money for cities and states is now the biggest sticking point in the next round of spending. The coronavirus relief measure devoted $150 billion to localities to respond to the pandemic, but governors have been asking for at least $500 billion more as their budgets get slammed.

They also are seeking flexibility to use the aid for general budgetary demands, not just their coronavirus response. Democrats tried but failed to get an additional $150 billion for cities and states into the legislation that Trump signed on Friday.

McConnell has voiced opposition to bailing out state budgets, suggesting in a radio interview earlier this week that they should have the option of filing for bankruptcy, a comment that drew criticism from governors. But his view is supported by many fellow Senate Republicans who oppose federal help for states they say managed their budgets poorly long before the coronavirus hit.

Trump has sounded increasingly sympathetic to that point of view, even though he said over Twitter earlier this week that the next legislative initiative should include “fiscal relief to State/Local Governments

for lost revenues from COVID 19.”

Several governors recently urged Trump to help states with their finances during a recent phone call, and they played to his concerns about the state of the economy heading into the election.

“What really concerns us, Mr. President, is that this will make it much harder for us to have a strong economic recovery which I know is a top priority for you,” said Maryland Gov. Larry Hogan, a Republican and president of the National Governors Association, according to a recording of the call reviewed by The Washington Post.

Trump said that “some of the states as you know very well had a lot of problems before we got hit by the invisible enemy.”

“And certainly now, they definitely have very exaggerated problems,” he said.

Some aides have shown Trump financial projections showing how some of the states were already struggling and have argued that Trump should not reward Democrat-heavy states with large checks in an election year.

Among those skeptical of the state money is Mark Meadows, the chief of staff.

But Pelosi drew a red line on the issue Friday, telling reporters, “There will not be a bill without state and local” aid.

‘ENORMOUS UNCERTAINTY’

Friday’s Congressional Budget Office report predicts a devastating hit to the economy this quarter at an annualized rate of decline of 40%, accompanied by a 15% unemployment rate this spring and summer. For the entire year, the economy is predicted to shrink by 5.6%.

The budget office’s director, Phillip Swagel, cautioned that there is “enormous uncertainty” to the projections, given the unprecedented nature of the crisis, but it’s plain the economic shock is unlike anything seen since the Great Depression.

“Challenges in the economy and the labor market are expected to persist for some time,” Swagel wrote in a blog post. He said the economy is likely to begin rebounding

in the third quarter, but the jobless rate will remain about 10% by the end of 2021.

On the government front, coronavirus-related figures point to red ink unparalleled since World War II. Economists generally say the most significant measure of debt and deficits is to compare it against the size of the economy, and by that measure the debt is soon to rival the record. The budget office said publicly held debt will reach 101% of gross domestic product by the end of this year, just below the postwar high.

The deficit was entrenched long before the virus, with federal revenue shrinking to well below historic averages and the spending side of the ledger rising thanks to record Pentagon expenditures and the addition of baby boomers to Medicare and Social Security.

Even Washington’s spending hawks say red ink should not be a focus for now as the government faces unemployment levels not seen since the Great Depression and shutdown orders lasting well into next month or beyond.

“Right now, I think the wise move for Congress is to keep the economy afloat regardless of what it costs,” said Brian Riedl, an economic and budgetary policy analyst at the free market Manhattan Institute think tank. “That being said, the budgetary cost is enormous, cannot be ignored, and makes it even more important that lawmakers begin thinking about how to fix the federal budget after this is over.”

Republicans are beginning to warn of the coronavirus costs now — GOP Sen. Ben Sasse on Friday called Washington’s spending habit “suicidal.”

ARRAY OF WOES

The Congressional Budget Office has long said that lawmakers eventually will be forced to tackle the government’s chronic financial woes, if for no other reason than the looming insolvency of Social Security and Medicare. When Social Security runs out of reserves in the next decade, the system will be able to pay only 79% of benefits.

Two senior administration officials also said the White House is likely to ask Congress to approve a “liability shield” that would prevent businesses from being sued if a customer or employee contracts the coronavirus. That measure, demanded by businesses nervous about opening themselves up to lawsuits if their customers get sick, is likely to be fiercely opposed by Democrats who maintain it allows large corporations to escape their legal obligations.

In an interview with Fox News this week, Treasury Secretary Steven Mnuchin said the administration is “sensitive” to the economic effects of the mounting debt, but stressed that low interest rates meant the actual cost to taxpayers was low.

“I think we’re all sensitive to that this is a war and we need to win this war,” Mnuchin said. “And we need to spend what it takes to win the war.”

Trump said Friday that he expects the total number of U.S. deaths, once the pandemic has abated, to be “hopefully far below” early minimum estimates of 100,000.

“I think we’ve done a great job” in addressing the crisis, he said. “I’m not looking for credit for myself, but I am looking for credit for people in the federal government that have done such a great job, and for the doctors and nurses and everybody else.”

In an abbreviated White House briefing at which he took no questions, Trump said Friday that there had been “very, very significant progress” in slowing the progression of infections. “Eighteen states now show a decline in the number of positive tests in the last seven days,” he said. Trump noted that “half of the states have taken steps” or announced plans to reopen sectors of their economies. “It’s very exciting to see.”

Information for this article was contributed by Andrew Taylor, Alan Fram, Kevin Freking, Darlene Superville, Laurie Kellman, Russ Bynum and David Crary of The Associated Press; and by Erica Werner, Seung Min Kim, Josh Dawsey, Karen DeYoung and Jeff Stein of The Washington Post.