By the time you read this, you may be holding a $1,000 check in your hand, courtesy Uncle Sam. After only a few days of mass business and school closures, travel bans, and municipal lockdowns, federal lawmakers are scrambling to whip up an economic relief package to help citizens cope with societal disruptions caused by the Wuhan novel coronavirus.
On January 31, the U.S. Secretary of Health and Human Services (HHS) declared a public health emergency. On March 11, the World Health Organization (WHO) called the COVID-19 outbreak a pandemic. On March 13, President Trump declared the official National Emergency Concerning the Coronavirus Disease 2019 (COVID-19) Outbreak.
On March 16, 2020, U.S. Sen. Mitt Romney (R-UT), proposed sending every American adult a payment of $1,000 “immediately” to help people suffering from lost wages and wasted stock portfolios to pay some basic bills.
The next day, both sides of the political aisle supported the Republican’s immediate relief aid. The White House chimed in with Secretary of the Treasury Steven Mnuchin announcing the formation of a sweeping economic stimulus plan from the President and members of the Senate and House of Representatives:
“We’re looking at sending checks to Americans immediately.”
President Trump would like to see the checks issued “in the next two weeks.”
Mnuchin placed the total expenditure authorized for COVID-19 assistance at around $1 trillion. According to three anonymous insider sources, the Treasury Secretary warned that failure to act now might jolt the nation’s unemployment upward from February’s 3.5 percent to almost 20 percent.
Investors on the Dow Jones industrial average showed their approval of the stimulus package as the stock market closed up more than 1,000 points on March 17.
The Treasury Department’s proposal for coronavirus response has targeted key sectors hurt the hardest by the pandemic. The airline industry stands to receive an extra $50 billion in loan funds with two conditions: the “specified continuation of service” as required and limits on executive compensation increases until the loans are repaid.
Another $150 billion of bailout funds are earmarked to help “other critical sectors of the U.S. economy experiencing severe financial distress due to the COVID-19 outbreak.”
Authorized and appropriated funds for two rounds of direct Economic Impact Payments to individual taxpayers would be administered by the IRS and Bureau of the Fiscal Service:
- $250 billion to be issued beginning April 6
- $250 billion to be issued beginning May 18
Payment amounts would be fixed and tiered based on income level and family size and each of the two payments would be in the same amount.
Finally, small businesses would get a break and a chance to keep employees on the payroll from the creation of a small business interruption loan program and an appropriated $300 billion for the program. The loans for enterprises with 500 employees or fewer would be guaranteed 100 percent by the federal government with a streamlined underwriting process.
Each of the 50 U.S. states and the District of Columbia have reported confirmed cases of COVID-19. Virginia was the last state to identify a first patient on March 17.
Residents of metropolitan San Francisco, California, are being asked now to self-isolate and hunker down for a couple of weeks to slow the spread of the respiratory illness that is contagious before symptoms appear. Some 7 million people in the Bay Area counties joined San Francisco in issuing residential quarantines.
Dare County, North Carolina, officials banned nonresidents from entering the North Carolina Outer Banks vacation destination. Tourists and visitors are restricted from exposing permanent residents to the disease.
Marriott International, the world’s leading hotel brand with almost 1.4 million rooms, began to close its guest properties, furloughing tens of thousands of employees on March 17. The workers will not receive pay but will continue to receive healthcare benefits until the hotel facilities resume normal operations.
As Americans are teetering over the brink into bankruptcy, the stimulus relief checks come with no strings attached – there is no application form for the payments, your check will come in the mail. As a bonus, there are no rules on how the money can be spent by the recipient.
While many Democrats on Capitol Hill have stated they approve sending cash payments to Americans experiencing financial hardship, the Treasury Department’s economic stimulus package is far from a done deal.
The Trump administration is also asking Congress for $46 billion of separate emergency funding for “ongoing preparedness and response efforts” to COVID-19. New funding for the Department of Defense, the Department of Veterans Affairs, the Centers for Disease Control and Prevention, and the National Institute of Allergy and Infectious Diseases would be authorized under this plan.
This is by no means the first federal economic stimulus scheme in the U.S. in recent years. The Obama administration passed the American Recovery and Reinvestment Act of 2009 (ARRA) and the Bush administration approved the Economic Stimulus Act of 2008.