Mnuchin Sees Emergency Package on Track for Monday Passage
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Treasury Secretary Steven Mnuchin said the Trump administration is nearing agreement with Congressional leaders from both parties on a massive aid program aimed at supporting the U.S. economy through the next 10 to 12 weeks.
“We have a fundamental understanding, and we look forward to wrapping it up today,” he said on “Fox News Sunday,” adding, “I hope this gets passed on Monday, because we need the money now.”
The plan would include aid to small businesses to help retain workers, direct cash payments to some Americans, enhanced unemployment insurance, a “significant new liquidity package in coordination with the Federal Reserve,” and financial support for hospitals.
The package is designed to address the impact of the rapidly spreading coronavirus pandemic. The deadly contagion has sent markets plunging, eliminating gains in U.S. stocks made during the first three years of Trump’s term, and brought much of the economy to a near standstill.
Mnuchin said the administration will seek additional aid if the emergency persists. “If this lasts longer, we’ll come back again,” he said.
Mnuchin outlined the following details on the package now working its way through Congress:
- Small business retention loans: Loans to small businesses covering two weeks of payroll and “some overhead” expenses.
- The loans would be forgiven for companies that retain their workers.
- Eligible companies account for about half of the U.S. workforce, according to Mnuchin.
- Mnuchin says it will be a broad-based program “to help everything from small businesses to big businesses get through the next 90 to 120 days.”
- A “small component” for airlines and national security companies.
The U.S. looks certain to experience an enormous and sudden economic contraction as businesses close and Americans stay home. Mnuchin said the issue of whether the economy is now in recession was a “technical question” and added that U.S. growth would bounce back “significantly” when businesses reopen.
By some estimates, the economy may suffer its worst quarter in records dating to 1947. JPMorgan Chase & Co. expects gross domestic product to shrink at an annualized rate of 14% in the April-June period while Bank of America Corp. and Oxford Economics both see a 12% drop. Goldman Sachs Group Inc. sees a 24% plunge.
Goldman Sachs projected jobless claims would surge to a record 2.25 million in the week ended March 21, while Bank of America projects 3 million and Citigroup 4 million. That compares with 281,000 in the prior week and would be more than triple the record 695,000 during one week in 1982.
— With assistance by Reade Pickert, and Rich Miller
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