There’s nothing like a global pandemic and a complete financial market meltdown to spur the notoriously slow-moving Senate to lightning-quick action.
Senate Majority Whip John Thune, R-S.D., said Wednesday that several “task forces” led by key committee chairmen were prepping to submit their recommendations for what could be a $1 trillion or thereabouts economic stimulus package as early as Wednesday evening or Thursday.
Timing for votes on a package wasn’t clear, though senators this week haven’t ruled out the possibility of remaining in session over the weekend.
Sen. Mike Rounds, R-S.D., said Senate Majority Leader Mitch McConnell, R-Ky., has “made clear he’s talking about doing it within days,” later clarifying he meant “one to three days.” Sen. Susan Collins, a Maine Republican, said “my hope is that we will pass it sometime this weekend.”
Thune said there are several steps that remain once the task force recommendations are submitted, like drafting legislative text and securing House and administration support but he suggested that Senate Republicans are starting to get on the same page.
“There’s still some, as you would expect, loose ends … we have to get all our members to coalesce behind in some instances the details but the general outlines,” he said. “I would suspect this pushes probably at least through the weekend and probably sometime into next week.”
Rebate checks, business loans
The major pieces so far outlined by the White House are $500 billion in direct payments to individuals and households in the form of rebate checks; small business loans backed by $300 billion in appropriations; and $200 billion in collateralized loans and loan guarantees to “severely distressed sectors” of the U.S. economy, including $50 billion set aside for the battered airline industry.
President Donald Trump told reporters Wednesday that his administration wasn’t locked into a particular set of proposals, saying they were “playing with a lot of big numbers and a lot of small numbers.”
The largest component of the White House plan is cash payments to households, which they’d distribute in two batches of $250 billion each, one on April 6 and the remainder on May 18. Treasury Secretary Mnuchin’s proposal calls for varying the payments based on income and family size, but hasn’t settled on particular thresholds yet.
“We’re going to see,” Trump said. “I don’t want to get into that right now. We’re looking at different numbers.”
Senate Republicans, with few exceptions, seem ready to go the direct payments route.
“I’m not hearing any dissent on the fact that we need to get some cash back to people that really are struggling right now,” Rounds said. “There may be some modification as to how the distributions go. But I think we’re pretty close to having consensus.”
Different payment options have been circulating among Senate Republicans, including one from Josh Hawley of Missouri that would distribute monthly checks of up to $2,206 for a family of five earning up to $100,000. Amounts would be phased down by 50 cents per $1,000 of income above threshold.
A plan from Tom Cotton, R-Ark., would distribute up to $2,000 per household earning up to $200,000, with an additional $500 per child.
Others, such as Lindsey Graham, R-S.C., said sending checks out to people wasn’t the best approach in the short term. “I think it makes sense later, not now,” he said. “Here’s what people worry about today: I lost my job.”
Graham and Mitt Romney, R-Utah, said they back a plan to supplement state unemployment insurance benefits with enough to cover up to 75 percent of income up to $80,000. Romney would also tack on a $1,000 per person stimulus payment.
Tweaks under discussion
The next largest component in Mnuchin’s plan is the creation of a “small-business interruption loan program” funded by an appropriation of $300 billion. The government would provide a 100 percent guarantee on any qualifying loan. Employers with 500 or fewer employees would be eligible for the program, under which loans would be provided by U.S. financial institutions.
The loan amounts would be 100 percent of six weeks of payroll, capped at $1,540 per week, per employee. Under the plan, employers would have to sustain compensation for all employees for eight weeks from when the loan is disbursed.
Rounds said senators were looking at changes to the small-business lending proposal, including loan forgiveness for firms that keep employees on their payroll. “They would keep that continuity and keep those individuals employed. That takes a huge emotional load off of those employees as well,” he said.
Collins said the small-business loan program would be retroactive to March 1, and run through June 30.
The Mnuchin proposal also includes temporary use of the Exchange Stabilization Fund to guarantee money market mutual funds. It would suspend the statutory limitation on using the exchange fund for such guarantee programs, with the authority terminating upon the end of the national emergency Trump declared Friday.
A provision to help the airline industry would appropriate an additional $50 billion to the Exchange Stabilization Fund and authorize the funds to be used to lend to U.S. passenger and cargo carriers, with the Treasury Department determining the interest rate, other terms and conditions, and specifying the collateral for the loans.
In order to qualify, airlines would have to continue providing service and limit increases in executive compensation until the loans are repaid.
“The airlines would be No. 1,” Trump said.
Prodded about what other industries would get assistance, Trump said the administration was still talking about it. “We’re coming up with numbers, haven’t gotten there yet,” he said.
In line with Trump’s priorities, Thune said Senate Republicans’ emerging plan would provide a separate credit facility for the airline industry. But for other industries, the aid would likely be more broadly crafted to provide Treasury and the Federal reserve with flexibility to free up liquidity for all types of impacted businesses, he said.
“What we’re talking about doing right now and the authority that the Treasury is going to have, the loan authority probably most industry sectors could apply for, perhaps qualify for,” Thune said. “But there are certain industries that we know are going to have to get help, get help fairly quickly, one of which is the airlines.”
David Lerman, Niels Lesniewski and Katherine Tully-McManus contributed to this report.