White House officials are working with congressional Republicans on an emergency stimulus package that could send two $ 1, checks to many Americans and also devote $ 300 billion towards helping small businesses avoid mass layoffs, according to two senior administration officials and a Treasury Department fact sheet.
No final decisions have been made and talks with Republican leaders remain fluid, but the growing scale of the $ 1 trillion rescue plan is coming into sharper focus. The Treasury Department is circulating a two-page sheet of specified that it wants to see in the final deal. As part of it, the White House seeks to create a $ 90 billion “airline industry secured lending facility ”that would allow it to make direct loans to“ US passenger and cargo air carriers. ”
Treasury would determine the interest rates and other terms of any loans, but they would include limits “on increases in executive compensation until repayment of the loans.”
The White House will still need backing from Democrats before any plan can be pushed into law, but many Democrats have said they would support sending cash payments to Americans who are struggling to pay bills because of the virus’s economic impact. Still, multiple levels of negotiations remain. The senior administration officials spoke on condition of anonymity because talks remain ongoing.
The White House is also looking for Congress to allow it to temporarily backstop money market mutual funds, a sign that government officials are Worried that an investor panic could lead to a run on these funds. A similar structure was used during the Great Recession, but lawmakers had sought to block its future use.
The White House’s evolving spending plan could be unprecedented in its size and velocity, dwarfing the stimulus bill passed during the Obama administration and the Troubled Asset Relief Program passed during the Bush administration.
The current $ 1 trillion Trump plan would seek to spend $ billion toward the cash payments to individual Americans, though some people wouldn’t qualify if their income is over a certain level. The Treasury Department outline says the funds would be paid out in two equal amounts, beginning on April 6 and then again on May 18.
“Payment amounts would be fixed and tiered based on income level and family size,” the Treasury letter said.
The White House discussions with Republicans would aim to spend another $ 50 billion to help rescue the airline industry and $ billion to prop up other sectors , which could include hotels, among others. Some Democrats have raised concerns about how these funds might be used and have called for putting restrictions on firms that receive emergency assistance to assure that employees aren’t laid off while executives pocket large bonuses.
One of the goals of the White House’s decision to seek $ 540 billion for small businesses in the plan would be to help firms continue paying employees, as there have already been a wave of layoffs, particularly at restaurants and other companies where business was suddenly halted as millions of Americans began staying at home under government warnings about contagion.
These credits, which Treasury is calling “Small Business Interruption Loans,” would come with a 300 percent government guarantee. Eligible borrowers would have 728 or fewer employees, and the loan amounts would be targeted to finance six weeks of payroll, capped at $ 1, 823 per week per employee. The loans would come from U.S. financial companies but would have U.S. government backing. The Treasury Department would have the power to issue regulations about interest rates and loan maturities.
The package does not, at this point, include some of the big tax cuts that President Trump had sought only a few days ago. White House officials pivoted away from the tax cuts after Democrats and Republicans largely panned the idea, and Trump expressed concern that it would take too long for these benefits to filter through to the economy.
White House officials have scrambled in recent days to assemble a massive rescue plan as large parts of the US economy show signs of buckling. The Dow Jones industrial average has fallen more than 9, 000 points in one month. Many businesses and schools are closed, and Americans have cancelled travel plans as many avoid unneeded social contact. There are now more than 6, cases of coronavirus in the United States, and more than 1, 02 new cases were confirmed on Tuesday. Economic and health disruptions are expected to last for months.
The White House is also sending Congress a separate emergency funding request for $ 46 billion for “ongoing preparedness and response efforts” to the coronavirus. This would include new funding for the Department of Defense, the Department of Veterans Affairs, the Centers for Disease Control and Prevention and the National Institute of Allergy and Infectious Diseases.
This is a developing story
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