WASHINGTON: President Donald Trump said negotiators in Congress and his administration are “very close” to agreement on a coronavirus economic-relief plan that his economic adviser said will aim to boost the US economy by about US$2 trillion.
The economic measure is intended to “keep companies together, keep workers paid, so they can live and sustain”, Trump said at a White House briefing.
“We’re asking people not to work because we have to stay away from each other,” he said, adding that the hope is to “win with as few lives lost as possible”.
White House economic adviser Larry Kudlow told reporters as he arrived for talks that the spending bill itself is expected to total US$1.3 trillion to US$1.4 trillion, plus additional loans that would eventually be paid back, for a total economic impact of about US$2 trillion.
“The package is coming in at about 10% of GDP. It’s very large,” Kudlow said.
Treasury Secretary Steven Mnuchin, also at the Capitol for negotiations, and Senate Democrats have been pushing to expand the GOP’s economic rescue plan.
Majority Leader Mitch McConnell is still aiming for a final vote on the measure Monday.
Minority Leader Chuck Schumer met with Mnuchin in the afternoon after speaking by phone earlier, and House Speaker Nancy Pelosi of California was heading to Washington for the talks, according to her office.
“The building blocks of this thing are pretty much in place,” said No. 2 Senate Republican John Thune.
One of the largest challenges, both sides say, is that negotiators must quickly circulate preliminary agreements and obtain sign off from other members of their respective parties over the historically large relief bill.
“The problem isn’t over what we accomplished or the few things that are hanging out there,” Senate Finance Committee Chairman Chuck Grassley told reporters.
The problem, he said, is that negotiators have to frequently break in order to gain sign off on the preliminary agreements they’ve reached.
The package is designed to address a pandemic that continues to rapidly unfold. The pandemic has sent markets plunging, eliminating gains in US stocks made during the first three years of Trump’s term, and constricted much of the world’s economy.
A US$1.4 trillion third-stage package would be dramatically higher than the 2008 economic rescue plan that was designed to address the banking-based financial crisis.
The US$700 billion package signed into law in October of that year would be valued at US$841 billion in today’s dollars.
“This is going to be the largest, when it’s concluded, relief package in history,” Senate Democrat Bob Menendez of New Jersey said.
“So yes, speed is necessary. But getting this done right so that it actually has the effect that we want is equally as important.”
One of the sticking points has been Democrats’ insistence on boosting unemployment insurance.
Republicans made a preliminary agreement with Democrats to provide federal funding to increase weekly unemployment benefits by about US$600 across the board, according to multiple people familiar with negotiations.
But the agreement will need sign off from their respective party members to solidify the agreement.
Though states administer unemployment compensation, the federal government has provided additional funds to temporarily expand it in the past, including the aftermath of the 2008-2009 financial crisis.
That portion is intertwined with the GOP Senate plan to provide US$1,200 in tax rebates to most individuals. Mnuchin has proposed two US$1,000 checks for individuals at a cost of about US$500 billion – substantially more generous than McConnell’s bill.
Lower-income filers are expected to receive the highest rebate benefit, rather than a tiered one that gradually increased, as in the original Senate GOP proposal.
Democrats agree with the Treasury Department’s push to expand the Federal Reserve’s authority for an emergency credit facility to be managed by Treasury, but have pushed for it to be much broader than the administration’s proposal to backstop large companies and expand the Fed’s legal authority to financially back distressed state and local governments, something Republicans object to.
“I don’t think we should be bailing out governments right now,” said Sen Richard Shelby, the Republican chairman of the Senate Appropriations Committee and former chair of the Senate Banking Committee.
“We should be trying to get to mitigate the economic fallout and find a solution to the health situation.”
Senate Democrats have also mirrored some of their House counterparts in pushing for rent forgiveness and other housing subsidies.
Another provision that has grown larger is the amount available for loans to small businesses. Senator Susan Collins of Maine and Marco Rubio of Florida said Saturday that portion could be US$350 billion, up from the US$300 billion in the original GOP plan.
Appropriators are still working on a supplemental spending measure that would help government agencies continue to operate, a measure that could be tacked on to the broader stimulus. Shelby said he expects that funding bill to be included.
Senator Rob Portman of Ohio, one of the lead negotiators on the unemployment insurance and tax rebate portion of the emergency aid package, told reporters that while there remain “a couple of outstanding issues,” like technical corrections to the 2017 tax law, most of the legislative text Republicans plan to publish on those provisions has bipartisan support.
“The unemployment insurance package that will be in our product will be one that Democrats came to us on. And as you will see it is quite generous,” Portman said. He warned that any legislation this large would rely on many moving pieces coming together.
Senators continued to negotiate loans and loan guarantees to airlines as of Saturday afternoon, Democrat Maria Cantwell of Washington said in an interview.
Democrats are pushing for more restrictions on the use of those loans, arguing that stock buybacks should be banned and that airlines should honour collective bargaining agreements, she said.
A group of airlines said in a letter to congressional leaders Saturday that they won’t furlough workers through the end of August if Congress gives them US$29 billion in grants.
The letter pushes back on the Senate Republican proposal to give them US$58 billion in loans, with no grants. The industry initially requested US$29 billion in grants and US$29 billion in loans.
“Unless worker payroll protection grants are passed immediately, many of us will be forced to take draconian measures such as furloughs,” said the letter, which was signed by chief executive officers of airlines including American, Delta and Southwest.
Regional airlines, which perform about 40% of all flights under contracts with the major carriers, are concerned, separately, that the Senate plan will be of little help.
And a bipartisan group of senators has requested that airports, not just airlines, should receive federal aid.
It wasn’t immediately clear whether the US$1.4 trillion figure cited by Kudlow on Saturday included a US$45.8 billion supplemental spending proposal from the White House.
It includes US$8.3 billion for the Department of Defense to protect service members, about US$11.5 billion for the Department of Health and Human Services, and US$3.4 billion for the Centers for Disease Control and Prevention.
House Democrats have pushed for the supplemental to be included in this “phase three” bill, but they also believe the request was not big enough, House Appropriations spokesman Evan Hollander said in a statement.
“One of the goals in this package is to do everything we can to not have to do a phase four,” said GOP Senator Kevin Cramer of North Dakota. “That’s why I think you’re going to see a really big bill.”