By press time in mid-March, President Donald Trump had signed into law an $8.3 billion stimulus package to help find a vaccine for the coronavirus and declared a national emergency, and Treasury Secretary Steve Mnuchin was trying to hammer out an additional $850 billion stimulus package to stem the economic and market carnage.
Policy analysts like Ed Mills of Raymond James opined in mid-March that a “potentially weeks-long effort for additional fiscal stimulus measures” would be underway, which may prolong market volatility.
(Since press time, the $2.2 trillion relief package, the Coronavirus Aid, Relief and Economic Security, (CARES) Act, was signed into law.)
In the near-term, however, Trump declared on March 13 a national emergency, “outlined a public-private partnership to dramatically increase testing capacity, and announced oil purchases for the strategic petroleum reserve and the waiving of interest on federal student loans,” Mills stated.
The national emergency declaration will “open up access to up to $50 billion” for states, territories and localities “in our shared fight against this disease,” Trump said.
Trump said he was also urging states to set up emergency operation centers immediately and asked the nation’s hospitals to activate their emergency preparedness plans.
“Our overriding goal is to stop this virus,” Trump said.
Trump’s emergency order also will confer “broad new authority” to the Secretary of Health and Human Services, who will be able to “immediately waive provisions of applicable laws and regulations to give doctors, hospitals and healthcare providers maximum flexibility to respond to the virus and care for patients,” Trump said.
During a March 16 press briefing, Trump announced “new guidelines for every American to follow over the next 15 days,” which will “further toughen the guidelines and blunt the effect” of the coronavirus. With schools closed across the country, Trump urged “working to engage in school at home,” and told Americans to avoid gatherings with more than 10 people, as well as bars, restaurants and public food courts. Curfews also had been set in many states.
A coronavirus vaccine candidate “has begun the phase one trial,” Trump said, adding that the United States also is “racing to get anti-viral treatments” to reduce the symptoms and duration of the coronavirus.
Two days earlier, the House approved H.R. 6201, the Families First Coronavirus Response Act, legislation which, among other measures, offers free coronavirus testing, by and large, for everyone in the United States.
While the House-approved bill allows for free testing for the virus, expands unemployment insurance, paid sick leave for those affected, and subsidized meals for students eligible for free school lunches, the measures are “relatively small and offer modest support to those with economic problems,” according to Ray Dalio, legendary founder and co-chief investment officer of Bridgewater Associates “They will need to be much bigger.”
As of press time in mid-March, the Senate was poised to take up the House-passed bill. Reports indicate that Treasury Secretary Steve Mnuchin has reached agreement with senators to vote on the “Families First Coronavirus Response Act” in mid-March after the House passed its technical corrections bill.
Dalio also slammed the Fed’s surprise decision on March 15 to slash short-term interest rates to close to zero, stating the move may end up doing more harm than good.
“Long-term interest rates hitting the hard 0% floor means that virtually all asset classes go down because the positive effects of interest rates falling won’t exist (at least not much),” said Dalio in a LinkedIn post published on March 16.
Democrats Plan More Stimulus
Sen. Chuck Schumer, D-N.Y., planned to lay out a “further proposal of at least $750 billion to wage war against the coronavirus and the economic crisis facing Americans.”
Starting on March 17, Senate Democrats planned to present a series of proposals to Congressional appropriators that should be part of the next bill to address the coronavirus.
“We are proposing an immediate and initial infusion of at least $750 billion to wage war against COVID-19 and the economic crisis it is now causing,” Schumer said.
The proposal will get money directly into hands of American people and, among other priorities, include federal funding to:
• Address hospital and treatment capacity issues; • Expand unemployment insurance and increase Medicaid funding; • Ensure that everyone can afford treatment for coronavirus; • Provide immediate loan payment forbearance for all federal loans, student loans, mortgages, small business loans and others, & moratoriums on evictions/foreclosures; • Deliver immediate help to small businesses; • Fund emergency child care, especially for health care workers and first responders; • Help schools with remote learning; • Provide assistance to keep public transportation running; • Address public health and economic needs in Indian country; and • Utilize the Defense Department to provide personnel, equipment, supplies, and critical response capabilities to support on the nationwide response.
“Other proposals” will be needed. Schumer continued, “In sum, we need big, bold, immediate federal action to deal with the crisis. The kinds of targeted measures we are putting together will mainline money into the economy and directly into the hands of families that need it most.”
Washington Bureau Chief Melanie Waddell can be reached at [email protected].