The Largest Aid Package in US History

The Largest Aid Package in US History

Printer-friendly version
Plus: Trump wants US to reopen as depression fears mount
Tuesday, March 24, 2020

Congress Closes in on a $2 Trillion Coronavirus Deal

Congressional negotiators and the Trump administration are nearing a bipartisan agreement on a massive coronavirus relief bill totaling nearly $2 trillion — a spending package that would be far and away the largest in U.S. history. Lawmakers were reportedly reviewing legislative language, with Senate Minority Leader Chuck Schumer and Treasury Secretary Steven Mnuchin expected to announce the deal as soon as Tuesday evening ahead of a Senate vote that could be held within hours.

“The Senate bill would direct payments of $1,200 to most American adults and $500 to most children, create a $500 billion lending program for companies, states, and cities, and extend another $367 billion to help small companies deal with payroll problems,” The Washington Post reports. “It would bolster the unemployment insurance system, and pump $150 billion into U.S. hospitals. The bill more than doubled in size in just a few days, amounting to the largest emergency stimulus package in American history.”

Schumer said that Democrats had secured large increases in funding for hospitals as well as an unemployment insurance provision that would have the federal government cover up to four months of full salaries for furloughed workers, who could continue to get health benefits from employers.

Some differences reportedly remain, though, and the situation is fluid. House Speaker Nancy Pelosi told members of her party in an afternoon conference call that she was still holding out for a 15% increase in food stamp benefits and more comprehensive insurance coverage for testing, according to Roll Call. Pelosi reportedly indicated that Democrats were also pushing for more money to help employer pension plans avoid insolvency in the coming years. Other last-minute issues could also delay a deal.

One major sticking point had been a $500 billion “Exchange Stabilization Fund” to help distressed corporations and industries, including airlines and cruise ship operators. The plan as proposed by Senate Republicans would have allowed the Treasury secretary to withhold the names of companies taking federal money, and the amounts involved, for up to six months. Democrats had pressed for greater transparency and oversight of the program, including tougher restrictions against the money being used for stock buybacks and executive compensation and protections to keep companies taking federal help from laying off workers.

Asked on Monday who would oversee the program, President Trump said, “I’ll be the oversight.” That’s precisely what Democrats had feared — that the program, left entirely to the discretion of the Treasury secretary, could turn into no-strings-attached corporate handouts or be politicized, with money directed toward favored companies or industries.

“We’re not here to create a slush fund for Donald Trump and his family, or a slush fund for the Treasury Department to be able to hand out to their friends,” Sen. Elizabeth Warren told reporters. “We’re here to help workers, we’re here to help hospitals. And right now what the Republicans proposed does neither of those.”

In the end, under Tuesday’s agreement, the $500 billion program will reportedly include an inspector general confirmed by the Senate and an oversight committee, similar to the structure of the Troubled Asset Relief Program created during the financial crisis.

High hopes for help: Stocks surged on hopes of a deal, with the Dow Jones Industrial Average soaring more than 11%, its biggest one-day jump since 1933. But it’s still not clear just how effective the unprecedented infusion of federal cash will be at stemming the rapidly developing public health and economic crisis — or how much more federal help will be needed.

What’s next: If the Senate votes on the stimulus bill Tuesday night, the House could potentially approve the package by unanimous consent, a process that would allow for speedy passage and let House members stay away from Capitol Hill. But a single objection from any of the 435 House members would require lawmakers to come back for a floor vote. Either way, Congress is likely to have to take up one or more additional coronavirus-related economic packages.

We’ll have more details on the stimulus bill on Wednesday.

Trump Hopes to Have U.S. Reopened by Easter

President Trump said Tuesday that he hopes to have the U.S. economy reopened in less than three weeks.

“I would love to have the country opened up and just raring to go by Easter,” Trump said on a Fox News town hall from the White House Rose Garden. Easter falls on April 12.

Trump has expressed increasing frustration in recent days over the economic impact of the virus and measures enacted to slow its spread. He has warned repeatedly that the damage being done to the economy could be worse that the threat from the virus. On Tuesday morning he tweeted:

“Our people want to return to work. They will practice Social Distancing and all else, and Seniors will be watched over protectively & lovingly. We can do two things together. THE CURE CANNOT BE WORSE (by far) THAN THE PROBLEM! Congress MUST ACT NOW. We will come back strong!”

Asked on Monday if he would go against the advice of public health officials, Trump said: “If it was up to the doctors they might say shut down the entire world.”

Experts disagree: Public health experts have warned that the worst of the coronavirus pandemic is still to come — and that restrictions on Americans’ activity may need to stay in place far longer to help contain the outbreak. They have also warned that prematurely loosening social distancing guidelines and other restrictions could undercut efforts to fight the virus and be disastrous for hospitals and health care providers. And some experts have suggested that the economy won’t be able to truly recover until the country resolves the worst of the public health threat.

“We haven’t yet even seen signs that the growth is slowing, much less reversing. Now is the time to tighten restrictions on contacts that could transmit the virus, not loosen them,” Marc Lipsitch, an epidemiology professor at the Harvard T.H. Chan School of Public Health and director of Harvard’s Center for Communicable Disease Dynamics, told The Washington Post. “If we let up now we can be virtually certain that health care will be overwhelmed in many if not all parts of the country. This is the view of every well-informed infectious epidemiologist I know of.”

Bill Gates calls for a shutdown: On a program hosted by TED conferences Tuesday, Microsoft co-founder Bill Gates said the country still needs to close up shop. “The U.S. is past this opportunity to control [Covid-19] without shutdown. We did not act fast enough to have an ability to avoid the shutdown. It’s January when everybody should’ve been on notice.”

But Trump has supporters: Yet Trump is far from alone in pushing for some parts of the economy to reopen quickly, with some Republican lawmakers and other expressing similar desires. Lloyd Blankfein, the former CEO of Goldman Sachs, tweeted Sunday that “crushing the economy, jobs and morale is also a health issue-and beyond. Within a very few weeks let those with a lower risk to the disease return to work.”

A Public Health Expert’s 5 Point Plan

Dr. Ezekiel J. Emanuel, an oncologist at the University of Pennsylvania Medical School and one of the architects of the Affordable Care Act in the Obama administration, outlined a proposal in The New York Times Tuesday for fighting the coronavirus – a battle he says we are currently losing.  

Emanuel recognizes there’s reason to worry about the economic cost of the current approach, but we must keep in mind the millions of deaths that could occur in the next year if we fail to “flatten the curve” of infections as quickly as possible.

“[T]he economy cannot be fixed without solving the pandemic,” Emanuel says. “Only after the virus is contained can we reopen restaurants, bars, gyms and stores; allow people to travel, attend conferences and visit museums; and persuade them to buy cars and houses.”

To get to that point, Emanuel calls for a seven to 14-day period of mobilization to confront the pandemic. “If the United States intervenes immediately on the scale that China did, our death toll could be under 100,000,” he says. “Within three to four months we might be able to begin a return to more normal lives.”

Here’s Emanuel’s plan:

  1. President Trump should immediately issue a shelter-in-place order for the whole country, closing all schools and non-essential businesses. The policy could be lifted gradually over two or three months.
  2. The federal government should take over all testing for the virus, with the aim of analyzing the entire population on an on-going basis.
  3. Coordinate production of medical equipment at the federal level, paid for by Congress on a cost-plus basis, similar to defense contractors.
  4. Publicly-funded assistance for hospitals, with a national overseer to manage care, equipment and personnel.
  5. Grants to businesses to maintain payrolls, with the unemployed used to help combat the pandemic in tasks such as contact tracing and disinfecting public spaces.

In the end, the country needs to mobilize as it has rarely done before, Emanuel says. If successful, “in two to three months the country can begin to return to normal, stores can reopen, people can work, and the United States will have a rapid, V-shaped economic recovery.” But if the country fails to act quickly and decisively, he warns, the U.S. “will follow Italy’s course or, worse, that of Iran, and recovery may take a decade or more with extraordinary levels of death and dislocation.”

Quote of the Day

“No one reached out to me and said, ‘As a senior citizen, are you willing to take a chance on your survival in exchange for keeping the America that all America loves for your children and grandchildren?’ And if that’s the exchange, I’m all in.”

— Texas Lt. Gov. Dan Patrick (R), speaking to Tucker Carlson on Fox News Monday.

Economists Increasingly Worry We’re Facing a Depression

As President Trump presses for a quick reopening of the U.S. economy, Politico’s Ben White details the growing pessimism about a quick economic recovery from Wall Street analysts and economists, who are increasingly warning that we may be facing a prolonged depression— one that will require additional government intervention — rather than the quick, V-shaped downturn and rebound many had hoped for as  novel coronavirus started spreading:

“Across Wall Street and the economic world, forecasters are quickly ramping up their predictions of massive job losses and declines in economic activity by as much as an annualized 50 percent in the second quarter of the year. They’re offering estimates unseen since the Great Depression that began in 1929 and continued for a brutal decade, reshaping governments and economies across the globe.
“Morgan Stanley economists on Monday said they now expect a 30.1 percent annualized decline in gross domestic product in the second quarter, the worst quarterly performance in 74 years. The firm’s estimates assume the virus peaks in April and May before growth starts to recover. But if the peak comes later and economic disruption continues in the second half of the year, they wrote, U.S. growth for even the entire year will be down to levels last seen in the early 1930s.”


Views and Analysis