Deal reached over relief bill
NATIONAL EMERGENCY DECLARED: Trump supports House’s economic package, frees up $50B for states, localities
WASHINGTON — President Donald Trump on Friday declared a national emergency to respond to the coronavirus pandemic and announced new steps he said would speed the availability of testing for the virus, as his administration reached a deal with congressional Democrats to provide tens of billions of dollars for sick pay for affected workers and begin to prop up a slumping economy.
Markets rallied on Trump’s emergency declaration, which he said would free up $50 billion for states and localities to cope with the outbreak — separate from the congressional relief measure — and would allow the Treasury Department to delay tax filing deadlines for some individuals and businesses. During an announcement in the Rose Garden, the president also said he would suspend collections of interest on federal student loans indefinitely and instruct the Energy Department to buy enough oil to fill the nation’s Strategic Petroleum Reserve “to the top.”
The president announced a new initiative that he said would speed the ability of Americans to be tested for the virus. It includes new private partnerships to speed tests to the market and a website designed by Google, where Trump said potential patients could enter their symptoms and be directed to a nearby, drive-thru testing center. Trump said the site would be available starting Sunday. Later Friday, Google said on Twitter that the initiative was in its “early stages” and would first be introduced as a pro
to type in the San Francisco Bay Area.
A roller-coaster day of negotiations over a sweeping coronavirus relief package also threatened to veer off track during Trump’s news conference as the president criticized the plan, telling reporters of Democrats, “We don’t think they’re giving enough.”
He gave little indication of what his specific objections were. Still, by dusk, Speaker Nancy Pelosi of California wrote to House Democrats saying, “We are proud to have reached an agreement with the administration to resolve outstanding challenges.” A senior administration official, speaking on the condition of anonymity because he was not authorized to comment, said Trump had signed off on the deal.
The announcements came as the ripple effects of the pandemic spread further on Friday, drastically slowing critical sectors of the American economy and daily life.
Schools across the country, including in Los Angeles, the nation’s second-largest public school district, as well as the entire state of Virginia, shut down. The airliner Delta announced it would park 300 aircraft and reduce capacity by 40 percent, the sharpest cutback in its history. Grocery store shelves were picked clean, and restaurants and retail stores braced for fall-offs in customer traffic as more Americans began to follow “social distancing” orders to avoid crowds and possible virus transmission.
As Congress and the administration struggled to hammer out what all sides agreed was only an incremental step — and not a full stimulus package — to combat the virus, European officials announced a series of aggressive measures to support their economies and try to contain the virus’s spread.
The World Health Organization declared Europe the center of the pandemic. European Union officials announced they would allow member nations to run larger than normal budget deficits to stimulate economic growth during the outbreak. France and Germany announced stimulus plans, a particularly stunning move for the deficit-averse Germans, and Italy was expected to follow suit.
In the United States, Trump’s moves and the possibility of Congress sending a compromise bill to the president’s desk next week brought progress in the effort to slow the spread of the virus and minimize its growing damage to the economy. But they still fell far short of the steps that a growing chorus of economists say lawmakers must take to confront a crisis with little precedent in American history — one that is likely to require a rapid, bipartisan response.
Shortly after stock trading closed for the day, the president followed his emergency declaration by introducing new uncertainty about the scope and speed of the government’s fiscal response.
“We don’t think the Democrats are giving enough” in negotiations, he said, on an emerging compromise to provide paid leave, safety net benefits and other measures meant to help consumers and businesses weather the sharp slowdown in economic activity that is threatening to grip the country.
After Trump’s remarks, a senior administration official said that the president was referring to his interest in securing a nearly $1 trillion temporary cut in payroll taxes, an idea that lawmakers from both parties have viewed with skepticism.
Still, talks continued as the afternoon progressed: At the moment Trump criticized Democrats, Pelosi and Treasury Secretary Steven Mnuchin were speaking for the 10th time of the day about the legislation. Pelosi announced the deal after the pair concluded their 13th phone call, on Friday the 13th, and shortly after Mnuchin met privately with the president to urge him to accept it.
The House was planning to vote Friday evening on the proposal, which includes a sweeping new provision for paid sick leave, enhanced unemployment benefits, free virus testing and additional funds for food assistance and Medicaid. The Senate, which left Washington for the weekend Thursday, is expected to take up the measure and pass it early next week.
Any delay could further imperil an economy that many forecasters are convinced is entering a recession, caused by the damage the virus has already inflicted on global supply chains and the growing chill from homebound consumers pulling back on their spending.
Some economists say that to contain the spread of the virus, the country must effectively hit pause on entire sectors of commerce, such as entertainment and dining, that bring Americans together in large crowds. Those economists say Congress and Trump must help workers and small-business owners weather that shock — and give them enough cash to help kick-start spending and hiring again once the virus is contained and daily routines begin to return to normal.
“The approach has to be, ‘Let’s make this as short and sharp as we can,’ ” said Steven Hamilton, an economist at George Washington University who has recently called for policymakers to rethink traditional government stimulus efforts that focus largely on tax cuts or spending programs, and instead supply hundreds of billions of dollars in direct assistance to workers and small-business owners.
“It’s the worst public health crisis in a century,” Hamilton said. “The world has never faced anything like this. The United States economy is going to need to shut — I mean, shut everything — for two to six weeks.”
That sort of abrupt halt in activity will particularly hurt smallbusiness owners who lack the cash reserves or access to credit that larger companies enjoy. It will also slam lower-income workers, many of whom do not have paid leave or are working in industries such as hospitality that are suffering acutely from the pandemic, or both.
By limiting the number of people gathering in common spaces, traveling by public transit systems and coming into direct contact with one another, it may be possible to substantially slow the spread of the virus, experts say.
The shape of the paid leave benefit — and how many workers could have access to it — proved to be a sticking point in negotiations on Friday between Pelosi and Mnuchin. Democrats agreed to drop a provision that would have created a permanent paid sick leave entitlement in case of a public health emergency. Republicans sought to confine it only to people who were sick or caring for ill family or children kept out of school.
The agreed-upon deal would guarantee 14 days of full paid sick leave and up to three months of family and medical leave for those affected by the crisis. It provides tax credits to help small- and medium-size businesses finance the new benefit. It does not include direct cash assistance to families — or Trump’s desired payroll tax suspension through the end of the year, which could cost more than $800 billion and would not give any help to workers who lose their jobs and stop drawing salaries in the outbreak.
Pelosi on Friday evening characterized the bill as an intermediate step.
“As the Senate works to pass this bill,” she wrote in a letter to colleagues, “the House will begin work on a third emergency response package to protect the health, economic security and well-being of the American people.”