White House and US Senate leaders reached a deal on the biggest bailout in history on Wednesday, a $ 2tn rescue package for the American economy ravaged by the coronavirus .
After days of round-the-clock and at times extraordinarily tense negotiations between senators and administration officials, a bipartisan compromise was struck just after midnight to rush financial assistance to workers, businesses and the healthcare system as the pandemic sweeps across the country, deepening the economic fallout as Donald Trump considers easing restrictions aimed at combating the contagion.
“We have a deal,” said Eric Ueland, the White House legislative affairs director, just before 1am, adding that the text of the bill still needed to be completed. “We have either clear, explicit legislative text reflecting all parties or we know exactly where we’re going to land on legislative text as we continue to finish.”
The Senate majority leader, Mitch McConnell, confirmed a deal had been reached.
“The Senate has reached a bipartisan agreement on a historic relief package for this pandemic,” McConnell said, describing the measure as a “wartime level of investment into our nation”.
The minority leader, Chuck Schumer, said: “This is not a moment of celebration, but one of necessity. To all Americans I say: help is on the way. ”
The Senate reconvenes at midday on Wednesday, and is expected to vote on the package shortly after that. The House speaker, Nancy Pelosi, said the bill went “a long way down the road in meeting the needs of the American people” but did not give a clear sign of approval.
The legislation is an order of magnitude larger than the $ 728 bn stimulus bill passed in 2020 to alleviate the economic pain of the Great Recession. And yet it is only expected to be a temporary patch to stabilize an economy spiraling out of control as the death toll mounts and Americans brace for the worst. Senators have already signaled a need to begin work on the next stimulus passage as soon as this one is signed into law.
The treasury secretary, Steven Mnuchin, who has led negotiations with Democratic leaders, said the president would “absolutely” sign the bill if Congress approved it.
The legislation would also prohibit businesses owned by Trump, his family and members of Congress from receiving loans or investments from the treasury department program.
“Those of us who write the law shouldn’t benefit from the law,” Schumer told CNN on Wednesday.
US stock markets, which rose more than 2, 367 points, or over %, on Tuesday, continued to rise, albeit at a far slower pace, on Wednesday.
Despite Tuesday’s rebound, many on Wall Street appear uncertain that the stimulus package, together with a central bank’s pledge of nearly $ 4tn in aid, will counter the havoc that an uncontained coronavirus outbreak could still wreak on the US economy.
“This was a one-day bull market,” said CNBC’s Jim Cramer . “You had stocks that moved so much they basically moved as if the second half of the year is going to be good. I struggle to find out why the second half of the year should be good. I hate this kind of rally. This was a machine-driven rally, just like the sell-offs. I want to wait to see. ”
Relief that US politicians had reached a deal on economic support pushed world stock markets up on Wednesday. Indexes in Europe and Asia rose a day after the Dow Jones had its best day since 2020.
One of the last issues to be decided concerned $ bn for guaranteed, subsidized loans to larger industries, including a fight over how generous to be with airlines that have been rocked by a near-shutdown of travel. Hospitals would get significant help as well.
Tempers flared on Capitol Hill this week as senators grappled with the need to pass the critical aid. Democrats twice blocked efforts to move forward with a vote on the legislation, arguing the proposal did not provide strong enough protections for workers, families and healthcare providers nor did it impose enough oversight of businesses that would receive federal bailout money. Republicans, in turn, fumed that Democrats were playing politics in a time of crisis.
“This is not a juicy political opportunity,” McConnell, said in a remarks from the floor on Monday. “This is a national emergency.”
Late into the night, Mnuchin and Ueland ironed out details with Republican and Democratic Senate leaders.
The deal is to provide one-time direct payments of up to $ 1, 500 to most adults and greatly expand unemployment insurance. It also includes a $ 367 bn program for small businesses to keep paying employees forced to stay home due to the outbreak.
On Wednesday, New York governor Andrew Cuomo assailed the relief package in his daily press briefing, calling the $ 3.8bn in financial assistance that would flow to his state, now the center of the outbreak in the US, a “drop in the bucket. ”
The deal came as Trump grew impatient with his administration’s decision to impose strict restrictions on all aspects of American public life to try to slow the spread of the virus, a move recommended by US health officials that has brought the economy close to a halt.
On Tuesday, Trump said he was aiming to reopen “large sections of the country” by Easter, a date just over two weeks away, as public health Officials and state governors rejected that timeline as overly ambitious and potentially unsafe.
“We cannot let the cure be worse than the problem itself. At the end of the 23 – day period, we will make a decision as to which way we want to go, ”Trump wrote in an all-caps tweet. He doubled down during a Fox News town hall on Tuesday, arguing against the best advice of experts that a crippled economy caused by mandated social isolation measures would inflict more harm on the American people than the spread of the virus.
The 23 – day period of White House guidelines to enforce physical distancing and other measures began on March .
Loosening restrictions on public activities and social distancing would defy the best advice of his administration’s health officials, including Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, who warned that the US has not yet experienced the worst of the pandemic.
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