Trump signs $2 trillion coronavirus bill into law as companies and households brace for more economic pain
The new law amounts to the largest emergency spending
“This will deliver urgently needed relief to our nation’s families, workers and businesses. And that’s what this is all about,” Trump said at a signing ceremony in the Oval Office, with GOP congressional leaders and administration officials crowded behind him.
But tensions between the White House and Congress over how the law will be implemented became immediately apparent. In a signing statement, Trump wrote that he would not permit a new inspector general to issue certain reports to Congress “without presidential supervision.” Democrats insisted on the creation of the new inspector general in order to make sure the White House didn’t improperly disburse taxpayer money.
Now the White House, the Treasury Department, the Small Business Administration and other agencies are rushing to implement each part of the new law. It authorizes the Internal Revenue Service to send $1,200 payments to millions of Americans and creates programs to disburse close to $1 trillion in business loans and guarantees to millions of large and small companies throughout the economy.
There are now roughly 100,000 confirmed cases of coronavirus in the United States and it has caused more than 1,500 deaths domestically, figures that have risen rapidly. To try to contain the contagion, much of American life has shut down. Schools have closed. Most public gatherings have been canceled. Many Americans have stopped leaving their homes, devastating millions of businesses that depend on consumer spending for their cash flow.
The economy’s screeching halt led 3.3 million workers to file for unemployment benefits last week, by far the most over a seven-day span in recent American history. A number of economists believe the U.S. economy has taken a nose-dive from a period of relative economic strength to one of the worst recessions ever recorded.
To respond, the White House and Congress assembled a massive spending bill that directs money to households, businesses, cities, states and hospitals while seeking to buttress state unemployment programs that are overwhelmed with new filers.
Trump said some of the key decisions would be based on consultations his advisers have with Wall Street executives and “the smartest, most brilliant people in the world in finance.” He left open the possibility that some of these companies could be compensated for their roles, but he did not offer more information.
It will require speed and cooperation between the White House, states and private companies, even though tensions among all sides has flared in recent days.
“I can’t think of any precedent where there were this many programs involved in a single piece of legislation that were trying to be stood up so quickly,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.
Akabas said the law’s move to pump $250 billion into the unemployment program could be a particular challenge, as it would require fast cooperation between the federal government and every state as Americans continue flooding into the program with requests for assistance.
The White House has promised it will implement the new law as quickly as possible, but its economic approach to the coronavirus crisis continues to change by the day. For example, Trump on Friday invoked the Defense Production Act in an effort to compel General Motors to manufacture ventilators after holding back on using that tool for more than a week. And there’s confusion about who will qualify for some of the emergency funding. Some members of the cruise industry have indicated they might not be able to receive the U.S. taxpayer assistance even though Trump has said multiple times that he wants them to be beneficiaries.
Trump’s top advisers will have to make a number of crucial decisions in the coming days, such as whether to protect taxpayer investments by taking equity stakes in struggling companies and whether to prioritize some industries over others as firms teeter on the brink of bankruptcy.
Treasury Secretary Steven Mnuchin promised in a Fox Business interview Friday that the Internal Revenue Service would quickly send out direct payments to Americans who qualify for the individual checks — those with incomes under $99,000 — and that the SBA would stand up a new lending program within a week. Small businesses will have access to close to $400 billion in loans from the new legislation.
“We’re going to have a new program up by next Friday where banks can lend. I mean that — that would be a historic achievement that is just incredibly aggressive,” Mnuchin said. “This is a brand-new program, the Treasury working with the SBA. We’re doing everything we can because Americans need that money now. They can’t wait for government to take three or four or six months like we normally do.”
On direct payments to Americans, Mnuchin said: “I’ve committed that the IRS will get these direct deposits [out] in three weeks. Again, American workers can’t wait.”
But there are a number of logistical hurdles that the Trump administration will need to resolve. For example, officials can send electronic payments to households that have bank accounts on file with the IRS, as many people have had their tax refunds directly deposited to their bank accounts. But the IRS will also likely need to send paper checks to millions of other people, a process that could take much longer.
Similarly, the new law requires certain oversight structures to monitor how the money is spent. It directs Trump to nominate a new “Special Inspector General for Pandemic Recovery,” a position that must be confirmed by the Senate. This is the inspector general that, in the new signing statement, Trump suggested he wanted to report to him instead of Congress. Congressional leaders will also appoint five members to a Congressional Oversight Commission, which is also tasked with scrutinizing how the money is disbursed, though that entity’s jurisdiction and clout is unclear.
Friday began on a note of chaotic uncertainty in the House, where the threat of a procedural objection from Rep. Thomas Massie (R-Ky.) had forced more than 200 lawmakers to return to Washington. These lawmakers traveled by plane and car, some coming from places like New York where people are supposed to quarantine after leaving.
Leaders had hoped to pass the massive legislation by “unanimous consent” or by “voice vote” with just a few members present, so that lawmakers scattered to their states wouldn’t have to return to the tight quarters of the Capitol in the midst of a pandemic. But Massie, who opposes the legislation because it adds to the deficit, was prepared to insist on a quorum — or majority of the House — which is specified in the Constitution but rarely enforced.
Massie’s move drew bitter complaints from lawmakers of both parties and from Trump, who derided him over Twitter as a “grandstander” who should be tossed out of the Republican Party.
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