WASHINGTON – As the Senate prepares to vote on a coronavirus stimulus bill in the coming days, President Donald Trump’s administration is acknowledging the bipartisan package won’t be nearly enough to stem the pandemic’s potential economic impact.
Senior White House aides said Sunday they will be pressing Congress as early as this week on a plan to target relief to airlines, hotels and other travel-related industries expected to be hard hit by COVID-19. The president, meanwhile, has continued to push for a payroll tax cut that was jettisoned from a bill passed by the House early Saturday after bipartisan opposition emerged.
House Speaker Nancy Pelosi said in a letter Sunday that lawmakers had already started work on “a third emergency response package.”
The rapid push for a more robust economic stimulus follows some forecasts predicting a global slowdown as Americans abandon travel plans, sporting events are cancelled and state governments prohibit mass gatherings. Treasury Secretary Steven Mnuchin downplayed talk of a recession Sunday and predicted the economy would bounce back.
“We are now going back to Congress, and focusing this week on the airlines industry, the hotel industry, the cruise ship – there’s no question that the travel industry has been impacted like we’ve never seen before,” Mnuchin told FOX News Sunday. “Whatever tools we need, we will go to Congress and get, and there’s a lot of bipartisan support.”
Mnuchin and other administration officials are developing next-step plans even as Senate leaders are negotiating the timing of a vote on a pending coronavirus relief deal approved by the House. Senate Majority Leader Mitch McConnell said last week he hopes to move swiftly, but so far lawmakers haven’t agreed to schedule a vote.
House lawmakers approved the Families First Coronavirus Response Act on a 363-40 vote with every Democrat and most Republicans backing the measure. The legislation would ensure sick leave for affected workers and include money for testing for Americans, including the uninsured. Administration officials said Sunday they do not yet know how much those provisions would cost but hoped to have estimates this week.
Several White House officials said they would begin pressing for more in the coming days.
“We’re gonna go up to the Hill this week,” Trump senior economic adviser Larry Kudlow told CBS’ Face the Nation. “We will have a number of new proposals.”
The contours of the new effort remained in flux over the weekend, but Trump and other administration officials have previously discussed offering tax breaks to the airline, cruise and other travel-related industries. The sectors have been particularly hard hit by a spate of travel restrictions put in place in an effort to limit exposure to the virus.
Trump has also continued to push for a payroll tax holiday, an idea that has so far met with a chilly reception on Capitol Hill – including some Republicans. A two-month suspension of the payroll tax cost would about $120 billion and, according to critics such as the Center on Budget and Policy Priorities, would be too slow to have much impact.
Trump has disputed that analysis and several members of his administration continued to press for the idea as they made the rounds on Sunday television programs.
“If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year,” he tweeted on Friday as lawmakers were putting the final touches on the pending bill.
Some leading economists are forecasting a recession this year, though the nation could still avoid one if the outbreak begins abating this summer. If the number of global cases peaks at 1 million and the U.S. total tops out at 50,000 to 100,000, the nation may be able to avoid a recession, said Mark Zandi, chief economist of Moody’s Analytics.
Diane Swonk, chief economist at Grant Thornton, said that if the outbreak continues to accelerate into the summer, a downturn lasting six months or so becomes more likely.
Despite a rally late Friday after the president declared a national emergency to pump billions of dollars from the Disaster Relief Fund into the response effort, markets have been in a free-fall over coronavirus fears for days. The Dow Jones Industrial Average closed off more than 6,000 points Friday compared to mid-February.
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Trump administration officials have also indicated that the president is working toward additional unilateral efforts on the economy. The president is expected to sign an executive order as early as this week intended to ensure that more medical supplies used domestically are made in the United States rather than overseas.
That order, officials said, would require the government to purchase drugs and supplies from American companies in an effort to drive up demand for domestic products.
“We’re going to put in motion a long-term trend to bring our pharmaceuticals, our medical equipment, our medical supplies home, on domestic soil,” Peter Navarro, assistant to the president for trade and manufacturing told Fox News. “We won’t have to worry every time we have a crisis whether that supply chain is going to break down.”