White House, Senate Leaders Reach $2 Trillion Deal to Revitalize U.S. Economy
Updated 1:01 PM on Wednesday, March 25, 2020.
Leaders in the Senate and the White House reached a compromise early Wednesday morning on a $2 trillion plan to resuscitate the U.S. economy from the unprecedented economic damage in response to the growth of the coronavirus epidemic.
The agreement comes after five days of debate on and off the senate floor between Senate Democrats and the G.O.P., including a similar stimulus plan that was shot down by Democrats the day earlier.
The amended plan was adjusted to make provisions for further expanded sick leave, and oversight and regulation by the Department of the Treasury over the nearly $500 billion directed towards the loans and loan guarantee program. Of the $500 billion, roughly $425 billion are to be directed towards raising local governments and businesses. Approximately $58 billion would be sent to various airline companies and $17 billion would be used to support companies deemed vital to national security.
The legislation would also allow for $1,200 in one-time stimulus checks to be distributed to many American adults along with an additional $500 per child. The checks begin to decrease for people making above $75,000 annually and are completely phased out by $99,000. Unemployment insurance has been expanded in terms of eligibility and dividend, allotting an additional $600 per week for four months, which would stack with pre-existing federal and state legislation.
The plan also includes $367 billion for assisting small businesses, including six months of loan forbearance.
In anticipation of the agreement, the stock market rallied an 11% gain on Tuesday.
The amended legislation now bears the full support of Democratic leaders. “We fought to send much-needed resources to fight coronavirus and to put people and workers first. The agreement now reflects those priorities,” said Senate minority leader Chuck Schumer (D) in a tweet after announcing the agreement.
The agreement comes as the long-term economic effects of the coronavirus begin to unravel, with businesses across the nation being shuttered. In California, Governor Gavin Newsom ordered all non-essential stores to close under the Stay at Home order, leaving some estimates to project more than 15,000 store closures to be announced by retailers largely due to both the coronavirus and its subsequent damage to revenue.
On Thursday, the Department of Labor reported more than 280,000 people had applied for unemployment insurance in the previous seven days, a 33% uptick. On Monday, St. Louis Federal Reserve president James Bullard suggested that the U.S. could reach 30% unemployment by the end of the second quarter.
The exact economic impact of the plan is unknown, especially considering much of the proposals are entirely unprecedented.
The senate is expected to vote on the plan today, Wednesday, March 25, where it sports bipartisan support, including the endorsements of democratic leaders Nancy Pelosi and Chuck Schumer. The bill had been fast tracked – meaning there will no longer be committees, hearings or debate over the bill.