Trump, Congress agree on $2 trillion virus rescue bill

Trump, Congress agree on $2 trillion virus rescue bill
Associated Press • March 25, 2020
ANDREW TAYLOR, LISA MASCARO and JONATHAN LEMIRE

WASHINGTON (AP) — The White House and Senate leaders of both parties announced agreement early Wednesday on unprecedented emergency legislation to rush sweeping aid to businesses, workers and a health care system slammed by the coronavirus pandemic.

The urgently needed pandemic response measure is the largest economic rescue measure in history and is intended as a weeks- or months-long patch for an economy spiraling into recession and a nation facing a potentially ghastly toll.

Top White House aide Eric Ueland announced the agreement in a Capitol hallway shortly after midnight, capping days of often intense haggling and mounting pressure. It still needs to be finalized in detailed legislative language.

“Ladies and gentlemen, we are done. We have a deal,” Ueland said.

The unprecedented economic rescue package would give direct payments to most Americans, expand unemployment benefits and provide a $367 billion program for small businesses to keep making payroll while workers are forced to stay home.

One of the last issues to close concerned $500 billion for guaranteed, subsidized loans to larger industries, including a fight over how generous to be with the airlines. Hospitals would get significant help as well.

“After days of intense discussions, the Senate has reached a bipartisan agreement on a historic relief package for this pandemic,” said Majority Leader Mitch McConnell, R-Ky., a key negotiator. “It will rush new resources onto the front lines of our nation's health care fight. And it will inject trillions of dollars of cash into the economy as fast as possible to help Americans workers, families, small businesses and industries make it through this disruption and emerge on the other side ready to soar."

At the White House on Tuesday, even as the public-health crisis deepened, President Donald Trump expressed eagerness to nudge many people back to work in coming weeks and held out a prospect, based more on hope than science, that the country could be returning to normal in less than a month.

“We have to go back to work, much sooner than people thought,” Trump told a Fox News town hall. He said he'd like to have the country “opened up and just raring to go” by Easter, April 12. But in a White House briefing later, Trump said that "our decision will be based on hard facts and data.”

Medical professionals say social distancing needs to be stepped up, not relaxed, to slow the spread of infections. At the White House briefing, the public-health authorities said it was particularly important for people in the hard-hit New York City metropolitan area to quarantine themselves for 14 days, and for those who have recently left the city to do the same.

Dr. Anthony Fauci, the government's top infectious disease expert, said pointedly at the briefing, “No one is going to want to tone down anything when you see what is going on in a place like New York City.”

On Capitol Hill, five days of arduous talks produced the bill, creating tensions among Congress' top leaders, who each took care to tend to party politics as they maneuvered and battled over crafting the legislation. But failure was never an option, which permitted both sides to mark big wins.

Even before the deal was reached, news of the likely but elusive agreement had sent the stock market rocketing on Tuesday. The emerging rescue package would be larger than the 2008 bank bailout and 2009 recovery act combined.

The unprecedented economic rescue package would give direct a one-time payment of $1,200 per adult and $500 per child directly to the public.

A huge cash infusion for hospitals expecting a flood of COVID-19 patients grew during the talks at the insistence of Sen. Chuck Schumer, the Democratic leader, while Republicans pressed for tens of billions of dollars for additional relief to be delivered through the Federal Emergency Management Agency, the lead federal disaster agency.

Democrats said the package would help replace the salary of furloughed workers for four months, rather than the three months first proposed. Furloughed workers would get whatever amount a state usually provides for unemployment, plus a $600 per week add-on, with gig workers like Uber drivers covered for the first time.

“It ensures that all workers are protected whether they work for businesses small, medium or large, along with self-employed and workers in the gig economy,” Schumer said.

Republicans won inclusion of an “employee retention” tax credit that's estimated to provide $50 billion to companies who retain employees on payroll and cover 50% of workers' paychecks. Companies would also be able to defer payment of the 6.2% Social Security payroll tax.

Democrats pointed to gains for hospitals, additional oversight of the huge industry stabilization fund, and money for cash-strapped states. A companion appropriations package ballooned as well, growing from a $46 billion White House proposal to more than $300 billion, which dwarfs earlier disasters — including Hurricane Katrina and Superstorm Sandy combined.

To provide transparency, the package is expected to create a new inspector general and oversight board for the corporate dollars, much as was done during the 2008 Troubled Asset Relief Program bank rescue, officials said.

Trump in recent days has sounded a note of frustration about the unprecedented modern-day effort to halt the virus' march by essentially shutting down public activities in ways that now threaten the U.S. economy.

Even though Trump's administration recommended Americans curtail activities for 15 days, starting just over a week ago, the president saids he may soon allow parts of the economy, in regions so far less badly hit by the virus, to begin reopening.

He continued on that theme Tuesday as he weighed a relaxation of social distancing guidelines after the 15-day period is up. His suggestion that the pandemic could ease and allow a return to normalcy in a mere few weeks is not supported by public health officials or many others in government.

On Tuesday, top defense and military leaders warned department personnel that the virus problems could extend for eight to 10 weeks, or longer. Army Gen. Mark Milley, chairman of the Joint Chiefs of Staff, said during a Defense Department town hall meeting that the crisis could even extend into July.

Trump has balked at using his authority under the recently invoked Defense Protection Act to compel the private sector to manufacture needed medical supplies like masks and ventilators, even as he encourages them to spur production. “We are a country not based on nationalizing our business,” said Trump, who has repeatedly railed against socialism overseas and among Democrats.

For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia. The vast majority of people recover from the new virus. According to the World Health Organization, people with mild illness recover in about two weeks, while those with more severe illness may take three to six weeks to recover.

Here's what’s in the $2 trillion coronavirus stimulus deal for businesses
Ben Werschkul, DC Producer
Yahoo Finance | March 25, 2020

Early Wednesday morning, Senators Mitch McConnell and Chuck Schumer announced a massive $2 trillion stimulus deal set to be the largest economic stimulus package in American history as it faces the novel coronavirus outbreak.

"This is a wartime level of investment into our nation," McConnell said Wednesday morning.

The deal is set to include a range of far-reaching provisions, including $1,200 government checks for individuals.

The most contentious part of the negotiations were provisions to send hundreds of billions of dollars directly to impacted businesses.

The initial proposal from Senate Majority Leader Mitch McConnell was repeatedly slammed as a “$500 billion slush fund” by Democrats who held up the bill until changes were made. Treasury Secretary Steven Mnuchin and fellow Republicans ultimately agreed to a range of oversight measures for how companies will be able to spend the money.

"Like all compromises, this bill is far from perfect, but we believe the legislation has improved significantly," Senate Minority Leader Schumer said after the deal was announced.

Here’s a rundown of what we know that’s in the deal aimed specifically at the businesses community.

For the airlines a ‘special provision’

“We're going to back the airlines 100%,” President Trump said last week about one of the industries hit hardest by the ongoing crisis.

The deal includes $46 billion for the industry; $25 billion will be for passenger airlines, $4 billion for cargo companies, and $17 billion for companies deemed important to national security.

Sen. Pat Toomey (R-PA), during a conference call with reporters, confirmed that much of the money will likely be extended “in the form other than a loan” – in other words, a grant. The Treasury Department has the option of distributing the money as a loan “but that is not likely,” he said.

Airline CEOs recently promised to stop stock buybacks and paying dividends in exchange for help from the federal government.

Toomey pushed back on a report that the $17 billion for national security firms was earmarked for Boeing. He also said there is a chance the government will take common stock as part of the deal with Boeing or other companies for some period of time, but taking any stock with voting rights is “expressly prohibited.”

Trump has repeatedly signaled that Boeing will be a key recipient of financial help. “We'll be helping Boeing, we'll be helping the airlines,” he said. “We'll be doing a lot of things and the money will all come back to us, and it will come back to us in a very strong form.”

Either way, the airlines were singled out for special treatment because “airlines do provide significant resources and national security issues,” Mnuchin said Monday, adding, “I believe that's something that's very important to Americans.”

Billions more for businesses

Other impacted industries, from the cruise industry to hotels to restaurants, have a range of ways to get government cash.

Previous stimulus efforts put $50 billion aside for the Small Business Administration. That “money's already starting to be approved,” an SBA official told Yahoo Finance last Friday.

This deal ramps things up aggressively with hundreds of billions of dollars in loans now expected to be available in the coming weeks and months.

Sen. Marco Rubio (R-Fl.), Chairman of the Senate Committee on Small Business and Entrepreneurship, was one of the leaders pushing the small business provisions.

“This is not a program where you are going to the SBA, you are not going to a tent somewhere in a disaster area or some government office or some government website,” he said on the Senate floor over the weekend. “You are going to a bank, to a financial institution.”

The banks will then, according to the plan, be able to process cash assistance quickly, either through the SBA or through a new program that will be set up specifically to administer some of this money. The deal includes a $350 billion “Paycheck Protection Program” for small businesses as well as a $454 billion fund for a new lending agency.

What’s still a bit of a mystery is exactly how this new lending agency will work. Toomey has been a central negotiator on this portion of the package and gave some insight into how this “big credit facility” will work.

It will administer the $46 billion to the airlines mentioned above. In addition, there will be about $454 billion for the Treasury department to dole out, which will be"broadly available" to a range of companies.

The money “will be available across categories, across sectors and industries,” and “it’s the single biggest piece in this whole thing,” Toomey said.

Businesses of all sizes, many of which are facing the prospect of bankruptcy, will be able to participate in the different programs.

This idea of a separate lending program — outside of the SBA — was also championed by Sen. Mark Warner (D-Va.). In a recent Yahoo Finance interview, he noted that a second loan authority would allow more businesses to participate. In the past, he says, "there were all these well-intentioned programs, but there was so much funding bureaucracy and underwriting that there was no take-up rate."

There is also expected to be a crucial change in how at least some of these loans will work. Some of these loans appear set to eventually be forgiven and effectively become grants.

“They are going to be able to take an SBA loan that will give them two months of payroll and some overhead,” Mnuchin said on Fox Business on Monday. “And if they hire the workers back or they keep their workers hired, the government will forgive that loan.”

Rubio’s office confirmed that SBA loans that are used for “payroll, including employees’ salaries and cash tips, paid sick leave, insurance premiums, mortgage payments, utilities, and other debt obligations,” will be forgiven.

Provisions to ban stock buybacks

A lot of that cash, especially the funds from the new lending facility, will find its way into a range of publicly-traded companies. The deal includes provisions to stop these companies from using that cash for stock buybacks or executive bonuses.

"Every loan document will be public and made available to Congress very quickly so we can see where the money is going," Schumer said Wednesday on the Senate floor. A condition for receiving a government loan will be that a company will suspend stock buybacks for a year.

The oversight provisions include a new inspector general position focused on oversight of these funds along with a five-person congressional panel. The structure is similar to what was done for the Troubled Asset Relief Program of a decade ago.

Neil Barofsky, who was the special inspector general for TARP, noted in a Yahoo Finance interview Tuesday that “putting the entity in place, is a first step,” he said, adding “but then there has to actually be real oversight, real transparency.”

Schumer’s office said the deal will “prohibit businesses controlled by the President, Vice President, Members of Congress, and heads of Executive Departments from receiving loans or investments from Treasury programs.”

Other stimulative measures

Hundreds of billions more dollars will also indirectly flow to businesses. First and foremost, lawmakers hope that the $1,200 checks will be spent across a range of industries.

The deal also includes a massive expansion of unemployment insurance. Schumer called the agreement "unemployment compensation on steroids," and said the maximum unemployment benefit will be increased by $600 per week to ensure “that laid-off workers, on average, will receive their full pay for four months.”

The plan also includes a massive infusion of cash into the health-care industry. Health care providers, community health centers, and hospitals are set to receive over $130 billion to fight the virus while states and localities are set to receive another $150 billion.

Overall, Washington is hoping that the deal will set the stage for a robust economic recovery. If not, Congress will need to looks towards a “phase 4” package.

Sen. Chuck Grassley told Yahoo Finance on Wednesday that he wants to wait and see before thinking about another bill. He thinks the country will have a good sense in a few months time. “If things are turning around at that point, then the answer is no,” he said about another bill. “But if we are in the same place three or four months from now as where we are today, we are going to have to do more.”

House gives final passage to $2 trillion coronavirus stimulus bill
NBC News
Rebecca Shabad, NBC News • March 27, 2020


WASHINGTON — The House on Friday passed the $2 trillion coronavirus economic stimulus bill, and President Donald Trump is expected to sign it quickly.

The legislation, which was passed unanimously by the Senate on Wednesday, provides relief for workers and businesses that have been devastated by the outbreak.

Trump has applauded the final product — the largest economic relief package in modern U.S. history — and said this week that he would sign the legislation, which the Senate passed 96-0 late Wednesday.

The House vote Friday came after Democratic and Republican leaders summoned House members to Washington late Thursday because they feared the package wouldn't be able to pass by voice vote, causing lawmakers to scramble back to the capital from their districts.

Congressional leaders wanted to avoid bringing members back to Washington, prompting Democratic leadership to plan for a voice vote that could be done without lawmakers returning. There was speculation, however, that Rep. Thomas Massie, R-Ky., might demand a roll-call vote.

Those suspicions proved right: Shortly before the vote, Massie said in a series of tweets that he would try to force a roll-call vote on the legislation, arguing that House members should have to go on the record.

"Is it too much to ask that the House do its job, just like the Senate did?" he tweeted.

Ultimately, House leaders were able to thwart the request for a recorded vote from Massie, who lacked support for the move from other members.

The bill's passage came after an emotional three-hour debate on the House floor in which members of both parties largely voiced support for the measure despite some misgivings.

Rep. Liz Cheney, R-Wyo., urged the House to pass the measure, saying, "We have an obligation to understand and to recognize that that this is not partisan. We need to come together as Americans to do what's right to defeat the virus, which I know we can, and also to restore our economy."

At one point, freshman Rep. Haley Stevens, D-Mich., wearing pink disposable gloves, went over her allotted time and began shouting, refusing to yield the floor when the presiding officer banged his gavel repeatedly. She could be heard shouting, “Our society needs you to stand together at this time, our country loves you. To our doctors and our nurses, I am wearing these latex gloves to tell every American to not be afraid!”

More than a dozen members have self-quarantined because of contact with those infected with COVID-19, and two members have tested positive for the illness. Public health officials have also said anyone traveling from New York should quarantine for 14 days, an issue for many members of Congress.

The legislation will provide billions of dollars in credit for struggling industries, a significant boost to unemployment insurance and direct cash payments to Americans.

The measure increases unemployment payments and extends the benefit to those who typically do not qualify, such as gig economy workers, furloughed employees and freelancers. The bill increases the maximum unemployment benefit that a state gives to a person by $600 per week for four months.

The bill also provides for direct payments to Americans, giving individuals who make up to $75,000 a year checks for $1,200, couples making up to $150,000 payments of $2,400, and an additional $500 per child. The payments decrease for those making more than $75,000, with an income cap of $99,000 per individual or $198,000 for couples.

The legislation also provides $100 billion to hospitals; $350 billion to small businesses; $500 billion to corporations, including airline companies and cruise lines; and about $150 billion for state and local stimulus funds.