The Trump administration is asking for $1 trillion to help bolster the U.S. economy, which would protect small businesses and industries that were hit the hardest by the coronavirus outbreak. President Donald Trump also asked for $500 billion specifically for direct payments to individual citizens, as reported by The New York Times.
In a proposal given to Congress by the Treasury Department, $300 billion of the $1 trillion would be allocated to help small businesses meet their payroll for employees in order to avoid layoffs. The proposal asked for $50 billion for the airline industry and $150 billion for other industries that have been adversely affected by the outbreak. At this time, the specific businesses that would receive aid haven’t been identified.
The money would come from the Exchange Stabilization Fund, a reserve account that is typically used for intervening in currency markets. This fund would also allow for a guarantee to money market mutual funds.
The $500 billion payments allocated for individual Americans would be split into two $250 billion rounds — with the first to be given on April 6 and the second on May 18. According to The New York Times, the payments would be “fixed, and their size dependent on income and family size.”
This program would also increase loans to small businesses, which — under this proposal — would be categorized as those that have 500 employees or less. These loans would give small businesses the ability to pay up to six weeks of their payroll — up to $1,540 per employee. This arrangement would be subject to the condition that companies “must keep paying their employees for eight weeks after receiving the loan.”
The proposal was given to Republican senators on Capitol Hill on Wednesday. However, it is expected to be revised by both sides before any bill is fully passed.
The Senate is going to vote on the House’s proposal. I will support it. But it does not help enough Americans and, crucially, it adds even more uncertainty for small businesses. It will make it all the more urgent for the Senate to pass bold legislation to help small businesses. pic.twitter.com/R0DjHKBLrI— Leader McConnell (@senatemajldr) March 18, 2020
This comes as the U.S. Senate is expected to take up debate on the coronavirus relief package that was passed by the House of Representatives last week, which would “provide paid leave, enhanced unemployment benefits, free coronavirus testing and food and health care aid,” as reported by The New York Times.
While some believe that the bill passed by the House will get changed and altered by the Senate to some degree, Senate Majority Leader Mitch McConnell told his fellow lawmakers to “gag and vote for it anyway.” On Wednesday, he spoke on the Senate floor.
“This is a time for urgent bipartisan action, and in this case, I do not believe we should let perfection be the enemy of something that will help even a subset of workers.”
This caution comes after a sobering lunch held by Treasury Secretary Steven Mnuchin on Tuesday.
At the meeting — which was held with some Republican senators — Mnuchin warned that the unemployment rate could rise to nearly 20 percent if “forceful government intervention” is not taken. He also assured that there would not be a federally mandated nationwide quarantine — nor would the Trump administration ask for Wall Street to go dark.
“Americans need to know they have access to their money,” Mnuchin said, as per The New York Times.
This assurance comes as the markets continue to be unstable, falling once more after an uptick that occurred on Tuesday when the Federal Reserve cut interest rates to nearly zero percent. Currently, the Dow is lower than it was before Trump’s inauguration.