$2 Trillion Relief Deal Reached

Finally.

A much-needed aid package to deal with the ravages caused by the COVID-19 pandemic on our nation’s economy has finally been reached, although it may be days before it’s actually enacted into legislation and the money released.

WaPo (“Senate, White House reach $2 trillion stimulus deal to blunt coronavirus fallout“):

Senate leaders and the Trump administration reached agreement early Wednesday on a $2 trillion stimulus package to rescue the economy from the coronavirus assault, setting the stage for swift passage of the massive legislation through both chambers of Congress.

Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles E. Schumer (D-N.Y.) announced the breakthrough on the Senate floor around 1:30 a.m., after a long day of talks with Treasury Secretary Steven Mnuchin and other administration officials.

Recall that the previous bill, written by Senate Republicans, faltered over the inclusion of a $500 billion “slush fund” controlled by the Treasury Secretary to spend as he saw fit under the cloak of secrecy. It appears to remain, albeit in modified form:

As lawmakers neared a deal, the White House made a significant concession to Democrats’ demands, agreeing to allow enhanced scrutiny over the massive loan program that is a centerpiece of the Senate’s $2 trillion coronavirus economic package.

This pertains to the $500 billion loan and loan guarantee program that the Treasury Department would be tasked with administering for companies, states and cities. Of that amount, $425 billion is supposed to go to businesses, cities and states. An additional $50 billion would go to passenger airlines, as well as $8 billion for cargo airlines, and $17 billion for firms that are deemed important to national security.

Trump has already said he wants some of the money to go to the cruise ship industry, and he also wants assistance for hotels. When he was asked Monday evening who would perform oversight of the program, Trump responded, “I’ll be the oversight.”

But during closed-door negotiations on Capitol Hill, White House officials agreed to allow an independent inspector general and an oversight board to scrutinize the lending decisions, senators said.

The most recent precedent for this is the $700 billion Troubled Asset Relief Program that was created during the 2008 financial crisis. To oversee TARP, Congress created an independent inspector general, a regulatory oversight board and a congressional oversight panel. Over the course of several years, investigations uncovered numerous cases of fraud at large and small companies as firms sought to obtain taxpayer money through various programs.

The overall plan is staggering:

The legislation, unprecedented in its size and scope, aims to flood the economy with capital by sending $1,200 checks to many Americans, creating a $367 billion loan program for small businesses and setting up a $500 billion fund for industries, cities and states.

Other provisions include a massive boost to unemployment insurance, $150 billion for state and local stimulus funds and $130 billion for hospitals.

McConnell said the Senate would pass the legislation later Wednesday. With the House out of session, action there could take longer, depending on whether lawmakers can agree to pass the bill by “unanimous consent,” which would require agreement from all members of the chamber.

Tuesday began with all parties predicting a deal would be imminent, along with a vote by Tuesday evening. But as the hours dragged on multiple disputes arose and legislative language required close review.

Finally, as midnight neared Tuesday, the pace of shuttle diplomacy picked up on the second floor of the Capitol, as Mnuchin, White House legislative affairs director Eric Ueland and newly named White House chief of staff, Rep. Mark Meadows (R-N.C.), met alternately with McConnell and Schumer, who was in frequent contact with House Speaker Nancy Pelosi (D-Calif.).

Let’s leave aside that it’s unconstitutional for a Member of Congress to have a job in the executive branch. Maybe “newly named” is a literal description.

The $2 trillion is literally more than the stimulus after the Great Recession of 2008. And it may well be a drop in the bucket.

The package would extend extraordinary taxpayer assistance to potentially millions of American and companies that have been hammered by the fast-moving economic crisis. The bill is being rushed through Congress without public hearings or formal review, and it’s unclear how effective the measures would be in arresting the economy’s sudden fall.

The stock market rose sharply Tuesday in anticipation of the deal, with the Dow Jones industrial average surging more than 2,100 points, or 11.4 percent. The government is dealing with a number of competing pressures, though, as Trump declared that he’d like much of the country to be up and running by April 12, even though the number of people testing positive for the novel virus in the United States continues to climb.

The Senate bill would direct payments of $1,200 to most American adults and $500 to most children, create a $500 billion lending program for companies, states and cities, and extend an additional $367 billion to help small companies deal with payroll problems. It would bolster the unemployment insurance system and pump $150 billion into U.S. hospitals. The bill more than doubled in size in just a few days.

So has the number of Americans infected with—and dead from—the disease.

FILED UNDER: COVID-19, Economics and Business, US Politics
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. mattbernius says:

    Interest concession that the Dem’s announced this morning:

    Dems have secured a provision in the deal that prohibits businesses controlled by Trump, Pence, members of Congress and heads of exec departments from getting loans or investments from the new slush fund. Also their children. Dems announced it early this AM.— Greg Sargent (@ThePlumLineGS) March 25, 2020

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  2. OzarkHillbilly says:

    Any minute now a fiscally conservative republican is going to loudly proclaim that this budget busting bill is an abomination, saddling our children with a debt they can never repay and that we need to all tighten our belts and lift ourselves up by our own bootstraps. s//

    Did I miss anything?

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  3. inhumans99 says:

    Funniest thing I have read in days is the bit where Trump initially felt he would be the guy to provide oversight for the slush fund (I am still calling it that, modified or not lets call a spade a spade)…President Trump should host a late night comedy show, such a card.

    I also love how he wants Cruise Lines and Hotels to get some sugar but lets face it they are not essential businesses to keep American strong but he does have friends in those industries and wants to be seen as having done them a favor.

    With that out of the way, I only received UI benefits for a few months last year before they ran out and was long-term unemployed for over a year (throughout all of 2019, pluse some of 2018 and this year…yeah I know, thank God I have parents that rock and helped me out) but I now have a good job (albeit one that pays less than the one I had in 2017) I started at the beginning of the month so I just hope I at least still qualify for the $1,200 check because I could have used this check even pre-Covid.

    Anyway, I stand by my words and if this gets President Trump reelected I am okay with that (I have mentioned in other OTB threads that this relief could get him re-elected and I still think this is very much the case). I suspect that this crisis might give some conservatives a bit of backbone to push back against having to repeat 4 more years of the same antics from President Trump allowing the GOP to maybe try to get their act together so we do not lurch from one crisis to another.

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  4. OzarkHillbilly says:

    @inhumans99:

    I suspect that this crisis might give some conservatives a bit of backbone

    Hope springs eternal. 😉

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  5. Sleeping Dog says:

    What’s the over-under on how long it takes rethugs to begin calling for an end to social programs, including Medicare, Medicaid and Soc Sec, due to the size of the deficit?

    OTB should start a pool and the winner gets his/her choice of a Tiny bobble head or a dart board silk screened with the image of Tiny’s face.

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  6. gVOR08 says:

    @Sleeping Dog: I call dibs on Nov 4.

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  7. Kathy says:

    @inhumans99:

    I also love how he wants Cruise Lines and Hotels to get some sugar

    Are any cruise lines even registered in the US?

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  8. Kathy says:

    @mattbernius:

    Worry not. Soon all of Trump’s business will be transferred to a blind trust known as El Cheeto Trumpo Ltd., whereupon we’ll learn of all the businesses in all the countries in all the world, these are the only essential ones.

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  9. Monala says:

    The Senate bill would direct payments of $1,200 to most American adults and $500 to most children

    Which Americans are not included in “most”?

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  10. Pylon says:

    Here where I live they just announced a $2,000/month payment to every worker who is not presently receiving a paycheque. I think it’s got a 4 month lifespan presently.

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  11. Mikey says:

    @Monala: IIRC there’s an income ceiling of $75K single/$150K jointly. Not sure of more details than that.

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  12. Sleeping Dog says:

    @Kathy:

    The companies maybe based here or at least some. But the ships are registered elsewhere and most likely owned by a subsidiary and leased back to the cruise lines. But let the cruise lines sink.

    ReplyReply

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