Friday, March 20, 2020

RELIEF FROM CORONAVIRUS: White House Expresses Intent for Immediate Cash Relief to Combat Effects of COVID-19

Treasury Secretary Steven Mnuchin: ‘We’re looking at sending checks to Americans immediately.’
(The Washington Post)

Every source has its day—even the inaccurate ones.

Under normal circumstances, Washington Post tends to offer a less-than-accurate perspective on news and world events. In fact, this source has shown itself to be largely biased on a number of subjects while attempting to sell an air of objectivity. Yet despite the general reputation of the WaPo platform, this particular article appears to be largely helpful and informative with regard to recent public health announcements.

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Source: Washington Post

Published: March 17, 2020

By: Erica Werner, Jeff Stein, and Mike DeBonis 

The Washington Post is providing this story for free so that all readers have access to this important information about the coronavirus. For more free stories, sign up for our daily Coronavirus Updates newsletter.

The Trump administration wants to send direct cash payments to Americans in the coming weeks to help them cope with the economic ravages of the coronavirus, Treasury Secretary Steven Mnuchin said Tuesday, part of a massive economic stimulus package taking shape between the White House and Capitol Hill.

The overall price tag of the package could be around $1 trillion, Mnuchin told reporters on Capitol Hill after meeting with GOP senators, making it one of the largest federal emergency fiscal packages ever assembled. News of the stimulus planning sent the Dow Jones industrial average up more than 1,000 points on Tuesday, recovering some of its losses from Monday.

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However, reservations expressed by Democrats Tuesday over various aspects of the package suggested that it could take some time to arrive at a bipartisan agreement that could pass both chambers of Congress.

The scramble for a deal comes while the coronavirus pandemic has ended everyday life for many Americans. On Tuesday, officials in North Carolina’s Outer Banks took steps to begin restricting tourists and visitors to limit permanent residents’ exposure. The San Francisco area began implementing a “shelter-in-place” plan with residents, a tactic New York officials are also studying. Meanwhile, Marriott International, the world’s largest hotel brand begun furloughs affecting tens of thousands of employees.

With parts of the economy appearing to be in free-fall, layoffs rising each day, and industries like hotels, airlines, and restaurants are begging for relief, the U.S. recorded its 100th death from the virus on Tuesday. There were also more than 1,000 new infections were reported in a 24 hour span, the highest number so far.

After initially proposing a big tax cut to help the economy recover, White House officials have shifted gears in the past day and now appear to be backing the idea of sending immediate payments to millions of Americans. They believe this would quickly inject cash into the economy and help Americans pay bills in the coming weeks, rather than spread any savings out over time.

“We’re looking at sending checks to Americans immediately,” Mnuchin said Tuesday. “And I mean now, in the next two weeks.”

This type of support was not being considered two months ago, when the economy appeared to be growing at a steady clip, but that all changed as coronavirus cases began spreading in the United States and the disruptions and closures began.

Senate Majority Leader Mitch McConnell (R-Ky.) vowed Tuesday that the Senate would not recess before reaching bipartisan agreement on the stimulus legislation, which would be the third coronavirus relief bill advanced on Capitol Hill in recent weeks.

“We’re going to move here in warp speed for the Senate, which almost never does anything quickly,” McConnell said. “I think everyone on both sides of the aisle is seized with the urgency of moving on yet another bill, and we intend to do that.”

McConnell also said the Senate would move as swiftly as possible to approve a $100-billion-plus House-passed bill from last week that boosts paid sick leave, unemployment insurance and free coronavirus testing -- despite concerns a number of Senate Republicans have about how the sick leave provisions in the House bill are crafted.

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“My counsel to them is to gag and vote for it anyway, even if they think it has some shortcomings, and to address those shortcomings in the bill that we’re in the process of crafting,” McConnell said.

In addition to direct cash payments, the White House wants the forthcoming legislation to include support for small businesses, aid for the airline industry, and a range of other measures. To further try and stabilize the economy, the Treasury Department and Federal Reserve took a step Tuesday to make it easier for companies to borrow money, while the White House gave more flexibility to taxpayers to delay payments they owe the Internal Revenue Service next month for an addition 90 days.

The White House’s support of the cash payment idea, which has won backing from Democrats and some Republicans in Congress, shows how fast talks are evolving.

President Trump had initially demanded that Congress temporarily eliminate the payroll tax to give households access to more money, but he said Tuesday that such a move would take too long to implement and that action needed to be taken more quickly.

“Payroll tax is one way, but it does come over a period of months, many months,” Trump said, speaking alongside Mnuchin at a briefing of the administration’s coronavirus task force. "And we want to do something much faster than that. So I think we have ways of getting money out pretty quickly and very accurately.”

“We’re going big," Trump said of the overall package, which would require congressional approval. “I think we want to get it done. And have a big infusion as opposed to going through little meetings every every couple of days. We don’t want to do it that way. We want to go big.”

Trump said the airline industry in particular needed help. “This is not their fault. .... So we have to help them during the short term,” Trump said.

Some lawmakers, including Sen. Mitt Romney (R-Utah) have discussed direct cash payments of $1,000 to Americans, something the lawmaker discussed with Mnuchin Monday night.

“That’s one of the ideas we like,” Mnuchin said Tuesday, without endorsing a specific dollar amount. He suggested there should be an income cut-off on the cash payments and that high-income households might not be eligible.

“I think it’s clear we don’t need to send people who make a million dollars a year checks,” Mnuchin said.

Sens. Sherrod Brown (D-Ohio), Michael Bennet (D-Colo.), and Cory Booker (D-N.J.), with the support of several other Democratic senators, are also pushing a measure to disburse $2,000 checks to everyone under a certain income threshold. Their plan would require the government to disburse checks of $1,500 if the health and economic emergencies continue, followed by quarterly payments of $1,000 after that.

The White House’s new $1 trillion plan looks to effectively flood the economy with cash, and officials said roughly $50 billion of it would go towards helping the airline industry, which is reeling from cancellations. While Senate Democrats largely embraced the idea of direct payments to Americans -- while saying such payments should be paired with other elements, like suspending loans -- they rejected other pieces of the administration’s proposals, particularly any industry bailouts.

“I am supportive of putting cash in the pocket of workers, families, consumers, and small businesses because it will be spent, as opposed to massive corporate bailouts that could involve stock buybacks or other kinds of expenses that fail to stimulate demand," said Sen. Richard Blumenthal (D-Conn.),

The House is not in session this week, after working past midnight Friday to pass the last coronavirus bill. But Speaker Nancy Pelosi (D-Calif.) was in touch with Mnuchin on Tuesday. Pelosi’s communications director, Drew Hammill, said via Twitter that as Congress considers its next steps, Pelosi believes lawmakers should look at refundable tax credits, expanded unemployment insurance and direct payments, but that any such payments “MUST be targeted.”

(The Washington Post)

As recently as Tuesday morning, top White House economic advisers were internally divided over whether the payroll tax cut or the direct cash payments were better suited for confronting the crisis, according to one person in communication with the administration. Some White House officials have begun defending the cash payment move as a way to shore up the social safety net that should be coupled with a payroll tax cut to stimulate economic growth.

“There’s been a big debate among the key economic policy makers over there that’s still ongoing,” the person said.

The attempt to inject a massive amount of money into the economy is reminiscent of the bailouts and stimulus steps Congress took during the economic crisis more than a decade ago. This time around, with everyday life in America screeching to a halt, the intervention may need to be faster and even more extreme. In 2008, Congress passed a $700 billion package, called the Troubled Asset Relief Program, to try and rescue the financial system.

The package the White House is pursuing now would be bigger, not adjusted for inflation, but it would include things like tax cuts that the 2008 program lacked.

President Trump speaks during a briefing about the coronavirus at the White House on Sunday. (Alex Brandon/AP)

“I think the only comparison to this is World War II, in the sense of it being not only in our country but just a global situation where everyone is pulling out all the stops to do the best we can to protect individuals, protect families and communities," said Sen. John Boozman (R-Ark.)

The massive package now under consideration would be the third step Congress has taken as it moves rapidly to address aspects of the pandemic.

Earlier this month, Congress approved $8.3 billion in emergency spending for public health programs, and last week the House passed a package with paid sick leave, unemployment insurance, money for food stamps, free coronavirus testing and more.

The initial package that recently passed the House mandated that businesses with fewer than 500 employees provide paid sick days and paid family medical leave to their workers. The legislation also included a federal tax credit to compensate firms for the new and potentially expensive benefit.

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