The U.S Treasury Department, said Wednesday it wants to dedicate $500 billion to start issuing direct payments to Americans by early next month. This is the centrepiece of a $1 trillion plan to stabilize the economy, as the coronavirus epidemic threatens a body slam to taxpayers and businesses.
In a memorandum, Treasury Department proposed two $250 billion cash infusions to individuals: the first set of checks issued starting April 6, with the second wave in mid-May. The amounts would depend on income and family size.
The Treasury plan, which requires approval by Congress, also recommends $50 billion to stabilize the airlines, $150 billion to issue loan guarantees to other struggling sectors, and $300 billion to for small businesses. The plan appears to anticipate that some of the loans would not be repaid.
Taken together, the administration plan promises half of the $1 trillion to families and individuals, with the other half used to prop up businesses.
The details are for the third coronavirus response bill that lawmakers hope to pass next week. Direct payments would go to U.S. citizens only, and would be “tiered based on income level and family size.” The two payments would be identical, with the second wave starting by May 18.
It comes as the Senate Wednesday passed a second coronavirus response bill, sending it to Trump. The sweeping 90-8 tally came despite significant misgivings among many Republicans over a temporary new employer mandate to provide sick leave to coronavirus victims.
The Treasury Department outline provides a basis for lawmakers to work from an unprecedented government response and is likely to be broadened to include additional emergency funding for federal agencies.
The price tag for the upcoming economic package alone promises to exceed Treasury’s $1 trillion request, a rescue plan not seen since the Great Recession. Trump is urging Congress to pass the eye-popping stimulus package in a matter of days. A more realistic time frame is next week.
Economists say the country is probably already in recession and the stock market continued its free fall on Wednesday. The panic has many lawmakers shedding their ideological baggage to grapple with an enormous undertaking for a crisis that exceeds the scope of the 2008 financial crisis — a virtual weeks-long shutdown of many businesses and unemployment that could spike to 20% by some estimates.
Wednesday’s legislation would speed the delivery of testing for the virus, provide paid sick leave to workers, and boost state Medicaid budgets, but the focus in Washington has already moved to the development of a far, far larger response bill that would inject hundreds of billions of dollars into the faltering economy, provide relief to shuttered businesses, and help keep airlines from going under.