White House economic advisor Larry Kudlow said Friday that formal talks on the next COVID-19 stimulus package, dubbed “phase four,” have been put on hold.
“We’re kind of paused as far as formal negotiations go,” Kudlow told reporters, adding that the talks would not resume until late May or early June.
Kudlow explained the rationale for pausing the phase four talks. “We just had another big infusion,” he said, referring to three major previous stimulus packages plus the recent $480-billion top-up of the popular Paycheck Protection Program for small businesses, along with funding for hospitals and testing. All told, the COVID-19 relief aid so far has totaled over $3 trillion.
Kudlow, the director of the White House’s National Economic Council, added that the stimulus measures enacted so far have been “well worth it,” adding that the administration was now adopting more of a wait-and-see approach.
“Let’s see what happens,” he said. “As we move into the reopening phase this month, maybe spillover to June, let’s have a look at it before we decide who, what, where, when.”
Kudlow said that informal talks would continue, adding that he and White House advisor Kevin Hassett had a “great” phone call yesterday with about 50 house lawmakers in both parties.
Regarding the thrust of those informal discussions, Kudlow cited President Donald Trump’s support for a payroll tax cut, some form of liability insurance for businesses, and opening America up to boost the economy.
“His philosophy from day one was lower taxes, lower regulations, opening up energy, and fair trade deals. And I would argue those worked and produced a very strong economy, even as recently as January and February,” Kudlow said.
“So whatever policies we come up with will be consistent with that point of view. It’s a free enterprise point of view,” he said, adding, “But on specifics, we’re at a lull right now.”
Kudlow’s comments come as Democrats craft their proposal for the next aid package, which they have repeatedly insisted must include hundreds of billions of dollars in funding for states and local governments, along with direct relief to households.
Republicans, meanwhile, have been cautious about new spending, and have insisted on caveats of their own, such as liability protection for businesses, amid a general disdain for what they say are “bailouts” of Democrat-led states with a history of fiscal mismanagement, rather than relief related to the pandemic.
The outbreak of the CCP (Chinese Communist Party) virus, the novel coronavirus that causes the COVID-19 disease, has battered economies worldwide.
In the United States, the virus-related lockdowns and plummeting demand have destroyed a record 20.5 million jobs in April, according to Labor Department figures released Friday, and pushed the unemployment rate to 14.7 percent.
Kudlow called Friday’s jobs numbers “heartbreaking,” and referred to the weekly jobless claims numbers released earlier “nothing but hardship.”
“Demand collapsed. The coronavirus worldwide caused the collapse in demand. Through no fault of anybody, this virus has pushed us into a big economic contraction,” Kudlow told CNBC in a recent interview.