Showing strong and effective leadership when we need it most, President Trump addressed the nation Wednesday night and unveiled a two-pronged program of health and economic actions to deal with the coronavirus pandemic.
The president’s action plan should win bipartisan support to respond to the most serious health and humanitarian crisis our nation has faced in my nearly seven decades.
“We are all in this together,” the president correctly said. “We must put politics aside, stop the partisanship.” He called on America to fight the pandemic “together as one nation and one family.”
We can only hope that those on both sides of the political aisle will heed his call to respond as one nation and one people, as our leaders have done so often in our past when facing a crisis.
While the coronavirus pandemic is a medical crisis, President Trump pointed out that it “is not a financial crisis.”
That’s a crucial point we should all remember. This pandemic is unlike the savings and loan crisis of the late 1970s, the tech bubble in the late 1990s, or the real estate bubble of 2007. Our nation’s economic fundamentals are strong.
There is no underlying economic fault that must be corrected before our economy can recover. As the president noted, “our banks and financial institutions are fully capitalized and incredibly strong.”
Unemployment is consistently at 50-year lows and we have 1 million more job openings than people unemployed. The Atlanta Federal Reserve’s GDPNow forecasting model is projecting 3.1 percent gross domestic product growth for the first quarter of this year, with only three weeks left in the quarter.
When the coronavirus pandemic subsides – and it will – our economy and the financial markets will come roaring back.
Nonetheless, whether a reaction or an overreaction, the stock market’s recent decline has dramatically demonstrated that there will be economic pain in the interim. Protecting American workers has always been the president’s top priority and he made clear Wednesday night that it remains so.
To ease that pain for American workers, the president promised to take “unprecedented” action to financially protect the workers who must stay home and miss work because they are ill, quarantined or caring for others infected with the coronavirus. And he called on Congress to take legislative action to extend that relief.
In addition, President Trump said he has instructed the Small Business Administration to provide capital to communities impacted by the virus by extending low-interest loans to help small businesses overcome the disruptions that are occurring and will occur as we address this virus.
The president asked Congress to expand the funds available for this program for small businesses by an additional $50 billion. This is a major expansion and its benefits should reverberate across the economy.
The $50 billion will be instrumental in helping small businesses stay in business and retain their employees as they deal with the temporary disruptions the coronavirus is causing. This is a good investment in the businesses and jobs that drive our economy.
Using his emergency authority, President Trump said he is also instructing the Treasury Department to defer income tax payments currently due April 15 without interest or penalties for individuals and businesses negatively impacted by the coronavirus. This will provide our economy with an additional $200 billion in liquidity.
Finally, the president called on Congress to grant Americans immediate payroll tax relief that he hopes Congress will consider “very strongly.”
In 2009, under President Barack Obama, Congress authorized a 2 percent payroll tax cut. It sounded like President Trump wanted a larger cut. This would put additional money in the pockets of American workers while we deal with this crisis.
In a broader economic context, the President is suspending all travel from Europe (with the exception of the United Kingdom) to the U.S. While necessary to limit the spread of the disease caused by the coronavirus, there will be some negative economic implications (cargo from Europe will be allowed into the U.S., although people transporting cargo will not).
On the positive side, the coronavirus appears to be on the decline in China and South Korea. The Trump administration is reevaluating the restrictions and warnings currently in place with respect to those nations and will consider the possibility of an “early opening.”
That could reopen essential supply chains and help China fulfill its obligation to purchase $200 billion in U.S. goods under the Phase One trade deal with China.
Americans should take heart. As President Trump stated, “no nation is more prepared or more resilient than the United States.” We have a highly qualified team headed by Vice President Mike Pence that is organizing our fight against the coronavirus and we have a president who is “marshaling the full power of the federal government and the private sector to protect the American people.”
The coronavirus knows no party lines. It is indiscriminate. As a unified nation, we can address this virus effectively and aggressively. The president is doing everything within his powers and has issued a call to action to Congress.
It is up to our congressional leaders to respond. Honestly, I hope – and, in my heart of hearts, I believe – that they will.
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