Senate, White House reach a deal on historic economic package

Marco Green
March 26, 2020

Senate Majority Leader Mitch McConnell said the Senate will vote and pass the legislation later Wednesday.

House Majority Leader Steny Hoyer of Maryland said the compromise wasn't ideal, but was far better than initial versions of the bill.

A vote had not been scheduled in the Senate by Wednesday evening.

Sanders also accused the Republicans of backing corporations over workers, highlighting their support for President Donald Trump's 2017 tax plan.

Details of the final package were negotiated Tuesday between Senate Democratic Leader Chuck Schumer of NY and Treasury Secretary Steve Mnuchin and the agreement was announced Wednesday morning.

NBC News' report added, "The bill is also expected to include roughly $100 billion in assistance for hospitals; $350 billion in assistance to small businesses; $500 billion in aid for corporations, including airline companies and cruise lines, that have been hurt by the outbreak; and about $150 billion for state and local stimulus funds". Most of those funds would be used to guarantee loans that small businesses could use to keep their cash flow going - and thus keep employees on their payroll and make other necessary payments - while the economy sputters.

Direct payments of $1,200 are expected for individuals making $75,000 per year or less, based on income tax returns from 2019 or 2018. Democrats pushed for part-time, self-employed, and "gig economy" workers - who are traditionally excluded from collecting unemployment insurance - to access the expanded benefits, which would include an extra $600 per week for every worker for an additional 13 weeks.

Any company receiving a government loan would be subject to a ban on stock buybacks through the term of the loan plus one additional year. They also would have to limit executive bonuses and take steps to protect workers.

This was a major sticking point for Democrats: they successfully pushed for oversight, including the installment of an inspector general and a congressionally appointed board to monitor the fund.

Notably, Democrats won language that would bar any business owned by Trump or his family from getting loans from Treasury. NY accounts for roughly half of all US coronavirus cases. It would create a half-trillion-dollar program to loan money to USA corporations and municipal governments, overseen by an inspector general and an oversight board.

But just as significant is the bill's expansion of the unemployment insurance program - or as Democrats call it, "unemployment insurance on steroids".

$3.8 billion for the MTA.

That would also require the unanimous consent of all House Republicans.

The legislation creates a $367 billion federally-guaranteed loan program for small businesses who must pledge not to lay off their workers.

It's the largest stimulus bill in US history, and though some of the details are still coming into focus - the legislative text is still being written right now - the package is likely to do a lot of good. Together with Federal Reserve actions, the legislation amounted to a US$6 trillion stimulus, according to White House economic adviser Larry Kudlow, or about 30 per cent of annual gross domestic product.

It's a whopper of spending, at a time when Washington is already running $1 trillion deficits.

Other reports by Click Lancashire

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