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https://www.washingtonpost.com/coronavirus/

Coronavirus pandemic

The Washington Post is providing this news free to all readers as a public service. Follow this story and more by <a href='https://www.washingtonpost.com/newsletters/health-science-environment-alerts/?method=SURL&location=ART&initiative=FREE'>signing up for health, science, and environment email alerts</a>.

The Trump administration wants to send direct cash payments to Americans in the coming weeks to help them cope with the economic ravages of the <a href="https://www.washingtonpost.com/coronavirus/" target="_blank" class="contextual_link">coronavirus</a>, Treasury Secretary Steven Mnuchin said Tuesday, part of a massive economic stimulus package taking shape between the White House and Capitol Hill.

The overall price tag of the package could be around $1 trillion, Mnuchin told reporters on Capitol Hill after meeting with GOP senators, making it one of the largest federal emergency fiscal packages ever assembled.

He also gave lawmakers a dire warning if they failed to act, saying the unemployment rate could spike to nearly 20 percent from the roughly 3.5 percent level it notched in February, according to three people familiar with his comments, who spoke on the condition of anonymity to reveal internal deliberations.

News of the stimulus planning sent the Dow Jones industrial average up more than 1,000 points Tuesday as it recovered some of its losses from Monday.

However, reservations expressed by Democrats on Tuesday over various aspects of the package suggested that it could take some time to arrive at a bipartisan agreement that could pass both chambers of Congress.

The scramble for a deal comes while the coronavirus pandemic has upended everyday life for many Americans. On Tuesday, officials on North Carolina’s Outer Banks took steps to begin restricting tourists and visitors to limit permanent residents’ exposure. The San Francisco area began asking residents to stay home, a tactic New York officials are also studying. Meanwhile, Marriott International, the world’s largest hotel brand, began furloughs affecting tens of thousands of employees.

With parts of the economy appearing to be in free fall, layoffs mounting each day and industries such as hotels, airlines and restaurants pleading for relief, the United States on Tuesday recorded its 100th death from the virus. There were also more than 1,000 new infections reported in a 24-hour span, the highest number so far.

After initially proposing a big tax cut to help the economy recover, White House officials have shifted gears in the past day and now appear to be backing the idea of sending immediate payments to millions of Americans. They believe this would quickly inject cash into the economy and help Americans pay bills in the coming weeks, rather spreading any savings out over time.

“We’re looking at sending checks to Americans immediately,” Mnuchin told reporters Tuesday. “And I mean now, in the next two weeks.”

His warning about the unemployment rate spike was first reported by Bloomberg News.

Asked about the comment, Treasury Department spokeswoman Monica Crowley said “Mnuchin used several mathematical examples for illustrative purposes, but he never implied this would be the case.”

Two months ago, when the economy appeared to be growing at a steady clip, such measures would have seemed unthinkable. But that all changed as coronavirus cases began spreading in the United States and the disruptions and closures began.

Senate Majority Leader Mitch McConnell (R-Ky.) vowed Tuesday that the Senate would not recess before reaching bipartisan agreement on the stimulus legislation, which would be the third coronavirus relief bill advanced on Capitol Hill in recent weeks.

“We’re going to move here in warp speed for the Senate, which almost never does anything quickly,” McConnell said. “I think everyone on both sides of the aisle is seized with the urgency of moving on yet another bill, and we intend to do that.”

McConnell also said the Senate would move as swiftly as possible to approve a $100 billion-plus bill passed in the House last week that boosts paid sick leave, unemployment insurance and free coronavirus testing — despite concerns a number of Senate Republicans have about how the sick-leave provisions in the bill are crafted.

“My counsel to them is to gag and vote for it anyway, even if they think it has some shortcomings, and to address those shortcomings in the bill that we’re in the process of crafting,” McConnell said.

Americans are very likely to get checks for $1,000 (or more). Here’s what you need to know.

In addition to direct cash payments, the White House wants the forthcoming legislation to include support for small businesses and aid for the airline industry, in addition to a range of other measures. To further try to stabilize the economy, the Treasury Department and Federal Reserve <a href="https://www.washingtonpost.com/business/2020/03/17/federal-reserve-launches-10-billion-special-fund-keep-credit-flowing-us-economy/" target="_blank">took a step Tuesday</a> to make it easier for companies to borrow money, while the White House gave more flexibility to taxpayers to delay payments they owe the Internal Revenue Service next month, for an additional 90 days.

The White House’s support of the cash payment idea, which has won backing from Democrats and some Republicans in Congress, shows how fast talks are evolving.

President Trump had initially demanded that Congress temporarily eliminate the payroll tax to give households access to more money, but he said Tuesday that such a move would take too long to implement and that action needed to be taken more quickly.

“Payroll tax is one way, but it does come over a period of months, many months,” Trump said, speaking alongside Mnuchin at a briefing by the administration’s coronavirus task force. “And we want to do something much faster than that. So I think we have ways of getting money out pretty quickly and very accurately.”

“We’re going big,” Trump said of the overall package. “I think we want to get it done and have a big infusion as opposed to going through little meetings every couple of days. We don’t want to do it that way. We want to go big.”

Trump said the airline industry in particular needed help: “This is not their fault. … So we have to help them during the short term.”

Live updates on the U.S. markets and economy

Some lawmakers, including Sen. Mitt Romney (R-Utah), have discussed direct cash payments of $1,000 to Americans, something Romney discussed with Mnuchin on Monday night.

“That’s one of the ideas we like,” Mnuchin said Tuesday, without endorsing a specific dollar amount. He suggested there should be an income cutoff on the cash payments and that high-income households might not be eligible.

“I think it’s clear we don’t need to send people who make a million dollars a year checks,” Mnuchin said.

Sens. Sherrod Brown (D-Ohio), Michael F. Bennet (D-Colo.) and Cory Booker (D-N.J.), with the support of several other Democratic senators, are pushing a measure to disburse $2,000 checks to everyone under a certain income threshold. Their plan would require the government to disburse checks for an additional $1,500 if the health and economic emergencies continue, followed by quarterly payments of $1,000 after that.

The White House’s new $1 trillion plan looks to effectively flood the economy with cash, and officials said roughly $50 billion of it would go toward <a href="https://www.washingtonpost.com/local/trafficandcommuting/airline-industry-seeking-more-than-50-billion-in-government-aid-amid-coronavirus-crisis/2020/03/16/62f21e06-67ab-11ea-9923-57073adce27c_story.html" target="_blank">helping the airline</a> industry, which is reeling from cancellations. While Senate Democrats largely embraced the idea of direct payments to Americans — while saying such payments should be paired with other elements, such as the suspension of loan repayments — they rejected other pieces of the administration’s proposals, particularly any industry bailouts.

“I am supportive of putting cash in the pocket of workers, families, consumers and small businesses because it will be spent, as opposed to massive corporate bailouts that could involve stock buybacks or other kinds of expenses that fail to stimulate demand,” said Sen. Richard Blumenthal (D-Conn.).

The House is not in session this week, after working past midnight Friday night to pass the last coronavirus bill. But Speaker Nancy Pelosi (D-Calif.) was in touch with Mnuchin on Tuesday. Pelosi’s communications director, Drew Hammill, said via Twitter that as Congress considers its next steps, Pelosi believes lawmakers should look at refundable tax credits, expanded unemployment insurance and direct payments but that any such payments “MUST be targeted.”

How has the coronavirus outbreak disrupted your life? Share your experience with The Post

As recently as Tuesday morning, top White House economic advisers were internally divided over whether a payroll tax cut or direct cash payments were better suited for confronting the crisis, according to one person in communication with the administration. Some White House officials have begun defending the cash-payment plan as a way to shore up the social safety net that should be coupled with a payroll tax cut to stimulate economic growth.

The attempt to inject a massive amount of money into the economy is reminiscent of the bailouts and stimulus steps Congress took during the economic crisis more than a decade ago. This time, with aspects of everyday life in the United States screeching to a halt, the intervention may need to be faster and even more extreme. In 2008, Congress passed a $700 billion package, called the Troubled Asset Relief Program, to try to rescue the financial system.

The package the White House is pursuing now would be bigger, not adjusted for inflation, but it would include measures such as tax cuts that were not part of the 2008 action.

Alex Brandon

“I think the only comparison to this is World War II, in the sense of it being not only in our country but just a global situation where everyone is pulling out all the stops to do the best we can to protect individuals, protect families and communities,” said Sen. John Boozman (R-Ark.)

This month, Congress approved $8.3 billion in emergency spending for public health programs, and last week the House passed the package with paid sick leave, unemployment insurance, money for food stamps, free coronavirus testing and more.

The initial package that recently passed the House mandated that businesses with fewer than 500 employees provide paid sick days and paid family medical leave to their workers. The legislation also included a federal tax credit to compensate companies for the new and potentially expensive benefit.

Over the weekend, however, lawmakers were inundated by complaints from small businesses that said they could be driven out of business before the new federal tax credit kicked in. The tax credit could take months to reach companies, and the required benefits would saddle them with an additional cost at the same time many are getting crushed by the wider economic downturn caused by the coronavirus.

As a result, late Monday the House approved additional changes limiting the scope of the required new sick-leave benefits. For instance, the House made it easier for employers to exempt emergency workers and other health-care businesses from the new rules and also capped the amount companies are required to pay out.

<i>Paul Kane and Seung Min Kim contributed to this report.</i>

Harvard University, A.B. in Latin American Literature 

Erica Werner has worked at The Washington Post since 2017 and is based in Southern California. Previously she covered Congress with a focus on economic policy. Prior to the Post she worked at the Associated Press.

Erica Werner

New York State Associated Press Young Journalist of the Year

Cornell University, BA in history

Jeff Stein is the White House economics reporter for The Washington Post. He was a crime reporter for the Syracuse Post-Standard and, in 2014, founded the local news nonprofit the Ithaca Voice in Upstate New York. He was also a reporter for Vox.

Jeff Stein

Georgetown University, AB in Russian, 2004

Mike DeBonis covered Congress for The Washington Post from 2015 to 2022. He previously covered D.C. politics and government from 2007 to 2015.