Pelosi: Americans Need Another Massive Aid Package

Pelosi: Americans Need Another Massive Aid Package

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Plus, small businesses scramble to get their federal aid
Friday, April 3, 2020

Pelosi Shifts Priorities for Next Coronavirus Relief Bill

House Speaker Nancy Pelosi signaled a new direction Friday for the next phase of coronavirus aid, calling for more immediate assistance for American households and businesses rather than the broader economic stimulus measures she outlined earlier in the week.

In comments to reporters and a televised interview, Pelosi said she wants to expand on the $2 trillion CARES Act that President Trump signed into law last week, calling for additional direct payments to “put money in the pockets of America’s working families,” a further two-month extension of expanded unemployment benefits and additional aid to small businesses, health care providers, states and local governments.

“Let’s do the same bill we just did, make some changes to make it current,” Pelosi told reporters Friday, according to Politico.

Pelosi told CNBC that the unprecedented, bipartisan emergency spending package Congress approved last week, the largest such package in U.S. history, was a “good model” but “not enough.” She added that the infrastructure spending proposal she and other House Democrats discussed in recent days — including broadband, water systems, roads and public transit — may have to wait.

“The acceleration of the coronavirus demands that we double down on the downpayment we made in CARES by passing a CARES 2 package. We must extend and expand this bipartisan legislation to meet the needs of the American people,” Pelosi said in a statement.

President Trump said Thursday the government will “probably do more” than the $2 trillion in relief funding, and he has called for a $2 trillion infrastructure package.

"POTUS has been clear that if we need to do more from Phase 3, he won't hesitate to ask, and expects Congress to act," a senior administration official told CNN, adding that the other ideas Pelosi and House Democrats put forward "aren't relevant to the challenges we face right now" and that the current focus is on "making sure Phase 3 works and being prepared to restock and reload: Phase 3.5."

Why it matters: The speaker’s shift may make a fourth coronavirus package more likely in the near term, given that Republican leaders had dismissed her efforts to prioritize a broader stimulus package including infrastructure spending.

Congressional Republicans have said they want to pause and gauge how the last relief package is working before moving onto a fourth coronavirus bill. Yet as Politico’s Heather Caygle and Burgess Everett report, Republicans are also increasingly acknowledging that additional legislation will be needed, particularly to extend benefits for small businesses to help them pay employees and cover expenses beyond the roughly eight weeks budgeted for in the last package.

Pelosi indicated she wants to push ahead. “The coronavirus is moving swiftly,” she said, “and our communities cannot afford for us to wait.”

Small Businesses Scramble to Get Their Share of $350 Billion in Federal Aid

An aid program designed to help small businesses hurt by the coronavirus pandemic got off to a rough start Friday as banks struggled to implement the massive lending effort, a key part of the $2 trillion aid package signed into law last week.

Guidance from the Treasury Department was sent to banks only on Thursday evening, leaving banks little time to finalize their application systems.

Many banks — including Wells Fargo, PNC and Citigroup — said they need more time to get the program up and running. Bank of America, one of the few banks that began actively administering the program, said that it had received applications from more than 58,000 customers by midday, for loans totaling more than $6 billion, CNBC reported. The nation’s largest bank, JPMorgan Chase, pushed a temporary portal for its loan program live Friday afternoon.

“The chaotic launch heightened fears among business owners that they could miss out on the historic program if lenders manage to disburse all $350 billion of the money,” CNBC said.

Banks expect to see enormous demand for the aid money. The program is aimed at business with fewer than 500 employees, and includes sole proprietorships, independent contractors and nonprofits. Businesses that use their aid money to pay for salaries and overhead are eligible for loan forgiveness.

For more on the small business program, see NPR, CNN and The Washington Post.

Second Coronavirus Relief Package Will Cost $192 Billion: CBO

A little more than two weeks ago, Congress hurriedly passed the Families First Coronavirus Response Act intended to ease the burden of the coronavirus pandemic, with provisions that expanded paid leave for some workers, boosted food assistance and increased Medicaid funding for states, among other things. In an estimate released Thursday, the Congressional Budget Office said the legislation will cost nearly $192 billion over 10 years.

At $105 billion, the paid leave provisions account for the largest part of the cost. An increase in Medicaid matching funds will cost $50 billion, and additional food aid will cost $21 billion, CBO said. The report noted, however, that the cost estimate is “uncertain to an extraordinary degree” given the unpredictable nature of the pandemic.

In a separate analysis Thursday, the CBO updated its economic outlook to account for the effects of the Covid-19 pandemic. In a blog post, CBO Director Phillip L. Swagel said the economy is expected to shrink by more than 7% during the second quarter, the equivalent of an annualized rate of more than 28%. The unemployment rate is projected to rise to more than 10% by midyear and remain elevated for an extended period, with unemployment still at 9% at the end of 2021.

Quotes of the Day

“This is a crisis like no other. Never in the history of the IMF [have we] witnessed the world economy coming to a standstill. We are now in recession. It is way worse than the global financial crisis.”

– Kristalina Georgieva, managing director of the International Monetary Fund, during a World Health Organization briefing on Friday.

“The baby boom that’s entering into our golden years, there will be a lot fewer of us ... the virus is solving one of our problems. The cost of an aging society.”

– John Mollenkopf, director of the Center for Urban Research at the City University of New York, speaking to Politico.

Tweet of the Day

From University of Michigan Economist Justin Wolfers:

Your Prize for Making It Through the Week

Museums may be closed and you may be stuck at home, but that doesn’t mean you can’t appreciate — or even create — some artistic masterpieces. Los Angeles’s Getty Museum late last month challenged homebound art lovers to recreate some of their favorite works, and the results were pretty spectacular.

Send your feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: @yuvalrosenberg, @mdrainey and @TheFiscalTimes. And please tell your friends they can sign up here for their own copy of this newsletter.

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