June 01, 2020
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Trump plans $1T coronavirus response including Collins-backed loans to small businesses

Andrew Harnik | AP
Andrew Harnik | AP
In this March 21, 2018, file photo, Sen. Marco Rubio, R-Fla., left, accompanied by Sen. Susan Collins, R-Maine, right, speaks at a committee hearing.

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WASHINGTON — President Donald Trump’s administration said Wednesday it wants to dedicate $500 billion to direct payments to Americans as the centerpiece of a $1 trillion plan to stabilize the economy as the coronavirus epidemic threatens an economic body slam.

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.

The administration plan promises half of the $1 trillion to families and individuals, with the other half used to prop up businesses and keep employees on payroll. A $300 billion item targeted at small business being championed by Sen. Susan Collins, R-Maine, is part of the same “Phase 3” package that the Trump administration wants to pass through Congress.

It all comes as the Senate on Wednesday passed a second coronavirus response bill, sending it to Trump. The sweeping 90-8 tally came despite misgivings among many Republicans over a temporary new employer mandate to provide sick leave to coronavirus victims. On party lines, Senate Republicans turned back a more sweeping Democratic sick leave amendment.

The price tag for the Phase 3 economic package alone promises to exceed the U.S. 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.

The Senate plans to remain in session until the third coronavirus bill passes, with weekend sessions possible. The House will have its own version and for now isn’t slated to return until Tuesday. A final compromise probably won’t reach Trump’s desk until late next week.

Economists say the country is probably already in recession. The stock market continued its free fall on Wednesday. The panic has lawmakers shedding ideological baggage to grapple with an enormous undertaking for a crisis exceeding the scope of the 2008 financial panic — a weekslong shutdown of many businesses and unemployment that could spike to 20 percent.

Wednesday’s legislation would speed the delivery of testing for the virus, provide paid sick leave to workers and boost state Medicaid budgets. The focus in Washington has already moved to development of a 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 folding.

“I will not adjourn the Senate until we pass a far bolder package,” Senate Majority Leader Mitch McConnell, R-Kentucky, said. “We aren’t leaving until we deliver.”

But first, the Senate passed a $100 billion-plus House-passed package of sick pay, emergency food and free testing, putting it back on track for Trump’s signature despite Republican objections over the potential impact on small businesses saddled with a new mandate.

McConnell is trying to take charge of the third coronavirus effort, putting GOP chairmen in charge and promising to consult with Senate Democrats later. Senate Minority Leader Chuck Schumer, D-New York, blasted McConnell’s approach, saying it’s “too cumbersome, too partisan and will take far too long, given the urgency and need for cooperation.”

Collins and Sen. Marco Rubio, R-Florida, are the chief authors of one part of the plan that would include $300 billion for “small business interruption loans” guaranteed by the federal government to cover six weeks of payroll during the crisis. These loans would be made through private banks and forgiven if employers keep their workers on payroll.

At a news conference on Wednesday, Rubio and Collins said they were negotiating their proposal with Sen. Ben Cardin of Maryland, the top Democrat on the small business committee. The full text of the proposal is expected to be finalized Wednesday, while Collins has not taken a position on the stimulus portion of the Trump administration’s proposal.

“In fact, I would say if we cannot come together in a bipartisan way to form a response to such a serious threat to our public health and our economy, then shame on us,” Collins said.

The Trump administration plan would also establish a $50 billion lending program dedicated to the imperiled airline industry, which would be required to keep flying as a condition of securing the loan. Another $150 billion would underwrite loans to other business sectors.

Economists doubted that a massive rescue package would be enough to stop millions of jobs losses, even if in the short term. The amount that would be sent out in checks to Americans is not decided. The White House said it liked an idea from Sen. Mitt Romney, R-Utah, for $1,000 checks, though not necessarily at that sum and not for wealthier people.

Senate Democrats produced their own $750 billion proposal, which includes $400 billion to shore up hospitals and emergency operations in response to the global pandemic and $350 billion to bolster the safety net with unemployment checks and other aid to Americans.

BDN writer Michael Shepherd and Associated Press writers Matthew Daly, Lisa Mascaro and Mary Clare Jalonick contributed to this report.

 


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