Top CEOs Call for 'Major' Coronavirus Stimulus

Top CEOs Call for 'Major' Coronavirus Stimulus

Printer-friendly version
Plus, Trump admin has shifted billions toward vaccine push
Wednesday, September 23, 2020

Top CEOs Call for 'Major' Coronavirus Stimulus

The CEOs of some of the country’s largest companies say the outlook for their businesses has improved somewhat compared to last quarter, but that the government must provide “further major support” for what remains a fragile economic recovery, according to a new survey.

The quarterly survey by the Business Roundtable, a non-profit association of chief executives of major companies, found that 24% of CEOs said that business conditions either didn’t suffer, have recovered or will likely recover by the end of the year. Another 40% said they expect conditions to bounce back next year, while 36% said it will take until 2022 or later for a full recovery.

The CEO group surveyed 149 members from August 31 to September 16. It said its index measuring CEOs' business outlooks climbed nearly 30 points to 64, the first increase in nine quarters, but remains well below the historical average of 81.7 dating back to 2002. The business leader projected that the economy would shrink by 2.4% for the year, a 1.4 percentage point increase from last quarter’s estimate.

“The outlook of Business Roundtable CEOs has improved, due in part to actions taken by policymakers earlier this year to help Americans,” Joshua Bolten, Business Roundtable’s president and CEO, said in a statement accompanying the survey results. “But further major support from the federal government is necessary to prevent economic recovery from being derailed. Failure to act, along with the lack of comprehensive and coordinated efforts to stop the spread of COVID-19, would impose long term damage on the U.S. economy, hurting most the workers and small businesses least able to absorb the blow.”

Walmart CEO Doug McMillon, who also serves as the Business Roundtable’s chairman, also called on lawmakers to restart talks on another coronavirus relief bill. “Business Roundtable urges the administration and Congress to come back to the negotiating table and pass more legislation to further ease the economic challenges American workers, small businesses and suppliers are experiencing,” he said.

Trump Admin Has Shifted Billions Toward Its Vaccine Push: Report

The Trump administration has said that Operation Warp Speed, its push to develop a Covid-19 vaccine with unprecedented speed, is a $10 billion program funded by Congress, which also provided “other flexible funding.” But Bloomberg News reports that the administration has shifted billions of dollars allocated to public-health programs toward the vaccine effort, growing its budget to as large as $18 billion. A review of public records shows that government deals with private-sector partners under the program total almost $13 billion, according to Bloomberg.

John Tozzi, Riley Griffin and Shira Stein report:

“One of the biggest transfers came in August, with $6 billion pulled from $16.7 billion that had been allocated to the U.S. Strategic National Stockpile, which buys, holds and distributes crucial medical supplies in times of national crisis. The money had originally been meant to replenish stocks of medical protective gear, ventilators, and Covid-19 testing supplies, all of which have experienced shortages at points during the pandemic.

“The transfer, disclosed in a footnote buried on page 135 of a Government Accountability Office report this month about the U.S. response to the pandemic, came after Health and Human Services officials said that they had been unable to spend about $1 billion of the money allocated for the stockpile.”

The transfers are reportedly legal but raise questions about transparency and the ultimate effectiveness of the administration’s pandemic response. The GAO report cited by Bloomberg reportedly also noted that shortages of PPE supplies remain.

House Passes Bill to Avert Shutdown

The shutdown threat disappeared as quickly as it arrived.

In a 359-to-57 vote Tuesday night, the House approved a continuing resolution to extend current funding levels through December 11 after Speaker Nancy Pelosi (D-CA) and the White House reached a deal to remove the threat of a government shutdown when the fiscal year ends on September 30.

Earlier talks on the stopgap spending deal came crashing down late last week, raising the possibility of a last-minute funding crisis, but Pelosi and Treasury Secretary Steven Mnuchin were able to revive the negotiations and come to terms on Tuesday.

The House bill provides additional funding sought by negotiators from both sides of the aisle, including $8 billion for children’s nutrition programs and $21 billion to replenish the Commodity Credit Corporation, a Depression-era income assistance program that the Trump administration has used to bail out farmers hurt by the president’s trade policies. The resolution also includes new guidelines that would prevent oil companies from benefiting from CCC funding.

What’s next: The bill will advance to the Senate. Majority Leader Mitch McConnell (R-KY) has not yet commented publicly on the bill, but is expected to bring it up for a vote this week, and President Trump is expected to sign it soon after.

Senate may head home: If the bill is signed into law by the end of the week, senators may start their fall recess early. “My guess is if we wrap up the CR [continuing resolution] then yeah we probably should be done for at least a while,” Senate Majority Whip John Thune (R-SD) said Wednesday, adding that lawmakers would return to town if needed to vote on a coronavirus relief bill or a new Supreme Court justice.

GAO Calls for Use of Fiscal Rules and Targets

The Government Accountability Office on Wednesday released a new analysis of the nation’s fiscal health, and the diagnosis is not good.

“Our nation faces serious challenges at a time when the federal government is highly leveraged in debt by historical norms,” the report says. “The imbalance between revenue and spending built into current law and policy have placed the nation on an unsustainable long-term fiscal path.”

To get a better handle on the fiscal situation, GAO recommends that lawmakers develop a long-term fiscal plan that relies on rules and targets to limit deficits now and in the future. The agency’s 48-page report lays out a variety of options lawmakers could deploy, ranging from clearly defined limits on revenues and spending to targets for the size of the annual deficit. The report also examines how such tools have performed in other countries, including Germany and the Netherlands.

“No process can force choices that policymakers are unwilling to make,” the report says. “However, agreement on a fiscal goal can assist in framing the difficult choices that must then be made in designing the mix of fiscal rules and targets adopted.”

Read the full GAO report here.

Send your tips and feedback to Follow us on Twitter: @yuvalrosenberg, @mdrainey and @TheFiscalTimes. And please tell your friends they can sign up here for their own copy of this newsletter.

Views and Analysis