Trump Says Virus Plan With $2 Trillion Impact ‘Very Close’

(Bloomberg) —

© Bloomberg A worker pulls a trolley loaded with packages on 5th Avenue in New York, U.S., on Friday, March 20, 2020. Some retail segments, such as grocery chains and Walmart, may benefit from the coronavirus outbreak. But for a sector already battered by the shift to online retailing and other structural changes, the coronavirus only portends more pain.

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 U.S. economy by about $2 trillion.

The economic measure is intended to 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, addin thtat 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 $1.3 trillion to $1.4 trillion, plus additional loans that would eventually be paid back, for a total economic impact of about $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.

Monday Goal

“We’re getting very close” to a bill, Trump said at the White House press briefing.

At the White House briefing, Vice President Mike Pence said “they’re making progress by all accounts on a bipartisan bill” and “we’re working to pass that legislation on Monday in both the House and the Senate.” Trump said he wouldn’t attend the talks in person.

The package is designed to address a pandemic that continues to rapidly unfold. The pandemic has sent markets plunging, eliminating gains in U.S. stocks made during the first three years of Trump’s term, and constricted much of the world’s economy.

“We are making progress on a bipartisan basis” on the plan, which would be Congress’s third-phase response to the virus, Majority Leader Mitch McConnell said on the Senate floor. He said he’s aiming toward a procedural vote on Sunday, and a final vote on the measure Monday.

Minority Leader Chuck Schumer said he spoke by phone with Mnuchin and added, “I have every expectation that this progress will continue throughout the day.” House Speaker Nancy Pelosi of California was heading to Washington for the talks, according to her office.

Largest in History

A $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 $700 billion package signed into law in October of that year would be valued at $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.”

Senate Finance Chairman Chuck Grassley of Iowa told reporters that there are four or five sticking points that Republicans are trying to work out with Democrats.

Senate Republicans made an offer on boosting unemployment insurance that Democrats are now reviewing, White House liaison Eric Ueland said. Menendez said the Republicans’ proposal on unemployment insurance is a “good faith offer” but “we need to move it a little more.”

Tax Rebates

McConnell and Schumer have each proposed their own sweeping plans that four groups of senators are trying to reconcile. Schumer wants an expanded package that would spend far more on workers and on responding to the health care crisis.

The GOP proposal includes tiered tax rebates of as much as $1,200 for middle-income individuals, $208 billion worth of loans for companies suffering because of the coronavirus pandemic, and another $300 billion dedicated to smaller businesses. Senator Susan Collins of Maine said Saturday that the small business portion could be $350 billion.

Mnuchin has proposed two $1,000 checks for individuals at a cost of about $500 billion — substantially more generous than McConnell’s bill. Those direct payments wouldn’t be based on income level, as in the GOP proposal.

GOP Senator Rob Portman of Ohio said Saturday he’s encouraged by the negotiations and hopes to have something together by a self-imposed deadline of 5 p.m.

Senators continued to negotiate loans and loan guarantees to airlines as of Saturday afternoon, Democrat Maria Cantwell if 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 honor collective bargaining agreements, she said.

‘Draconian Measures’

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 $29 billion in grants. The letter pushes back on the Senate Republican proposal to give them $58 billion in loans, with no grants. The industry initially requested $29 billion in grants and $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 $1.4 trillion figure cited by Kudlow on Saturday included a $45.8 billion supplemental spending proposal from the White House. It includes $8.3 billion for the Department of Defense to protect servicemembers, about $11.5 billion for the Department of Health and Human Services, and $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.”

(Updates with comments from McConnell, airlines, Cramer starting in ninth paragraph)

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