WASHINGTON—President Donald Trump visited Capitol Hill on March 10 to meet Republican lawmakers and seek support for his stimulus plan to tackle the economic disruptions caused by the coronavirus outbreak.
“We just had a meeting on stimulus, and you’ll be hearing about it soon. But it was a great meeting,” Trump told reporters on the Hill after meeting with Republican senators.
Trump promised on March 9 that he would announce “substantial” assistance for workers and businesses to deal with the significant economic fallout of the virus. Possible measures include a payroll tax cut and assistance for hourly wage earners.
Trump called payroll tax cut “a very substantial relief” for workers.
“We’re also going to be talking about hourly wage earners getting help so that they can be in a position where they’re not going to ever miss a paycheck,” he said during a press briefing on March 9.
The proposed economic assistance would also provide liquidity to large and small companies that are hit by the coronavirus outbreak.
“It’s not their fault. It’s not our country’s fault,” Trump said. “Also, we’re going to be seeing the Small Business Administration and creating loans for small businesses.”
Trump is also proposing economic relief for the airline industry, cruise ship industry, and hotels, which have been hit the hardest by virus related cancellations.
Trump’s announcement came after the U.S. stock market plummeted on March 9. The stocks had their worst day of 2020 as fears of the coronavirus and a steep decline in oil prices shook trader confidence around the world. The panic sell triggered the first automatic trading halt in more than 20 years. U.S. stocks neared the 20 percent drop, approaching the so-called bear market territory.
Stocks recovered on Mar. 10, regaining a good portion of the losses. However, concerns over the coronavirus still remain.
“We have a very strong economy,” Trump said. “But this came—this blindsided the world. And I think we’ve handled it very, very well.”
Tax Relief Faces Resistance
When asked whether Republicans endorsed the idea of payroll tax relief, Trump said, “There’s a great feeling about doing a lot of things. And that’s one of the things we talked about.”
Democrats are reluctant to support Trump’s proposed payroll tax cut. Instead, they propose paid sick leave and broadened unemployment insurance.
Senate Minority Leader Chuck Schumer criticized Trump on March 10 for proposing “another tax cut.”
“The administration seems to believe that the answer to any problem is another tax cut,” he said on the Senate floor. “Speaker Pelosi and I have mentioned several actions we could take, from paid sick leave for impacted workers to unemployment insurance, food and housing security, and protections against price gouging.”
A payroll tax is withheld by employers from each employee’s salary and is paid to the government. The government uses this money to fund specific programs such as Social Security, Medicare, unemployment compensation, and workers’ compensation.
Sen. Lindsey Graham (R-S.C.) told reporters on March 10 that reaction to the idea of cutting payroll taxes among Republicans was “mixed.”
“The payroll tax, as a general stimulus—I’ve got to think about that,” he said.
U.S. Economy Is ‘Resilient’
Trump will meet with the executives of top U.S. banks at the White House on March 11 to discuss responses to the outbreak.
Meanwhile, the Federal Reserve recently issued guidance to banks on how to work with customers impacted by the coronavirus outbreak. In addition, the New York Federal Reserve injected more cash into lending markets, increasing its overnight short-term borrowing by $50 billion.
“These common-sense solutions will help ensure economic resilience as we navigate the economic headwinds created by the Coronavirus,” U.S. Chamber of Commerce CEO Thomas Donohue said in a statement, applauding the Fed’s response.
“It is important to remember that the fundamentals of the American economy remain strong,” he added, urging businesses and consumers not to be guided by fear.
Asked whether the United States is heading toward a recession, Treasury Secretary Steven Mnuchin sounded confident that the U.S. economy was resilient enough to weather a significant crisis from the outbreak.
“There are parts of the economy that are going to be impacted, especially workers that need to be at home, hard-working people who are at home under quarantine or taking care of their family. We’ll be working on a program to address that,” he said on March 9. “We will also be working with small businesses who need liquidity through SBA programs.”
“This is not like the financial crisis, where we don’t know the end in sight. This is about providing proper tools and liquidity to get through the next few months,” said Mnuchin.
Congress passed an $8.3 billion aid package last week to curb the spread of the COVID-19 coronavirus. The bill authorizes $7.76 billion in funds for vaccine development and medical supplies, grants for health agencies and organizations, and loans for impacted small businesses. The bill also provides $500 million in waivers for Medicaid telehealth restrictions. The president signed the bill into law on March 6.