Lawmakers are floating myriad potential proposals as the growing spread of the coronavirus is taking a greater toll on financial markets and grinding key industries such as restaurants and airlines to a halt.
In a boost to its prospects, Treasury Secretary Steven Mnuchin said he wants to start sending checks out within two weeks, indicating it should be in the third coronavirus package Congress is currently negotiating.
“Although the president likes the idea of the payroll tax holiday ... we’re looking at sending checks to Americans immediately,” Mnuchin said during a press conference at the White House. He pitched GOP lawmakers on a plan expected to top $1 trillion.
Sen. John Thune (S.D.), the No. 2 Senate Republican, said there is “a high level of interest” in the White House cash payment proposal.
“You're not going to find unanimous consensus on any of these ideas, but I would say that idea has a lot more resonance with our members than does, for example, a payroll tax cut, simply because it can get dollars out there more quickly to meet the need in a more direct way ... and it seems to be an area where there's some common ground with Democrats as well,” he told reporters after the closed-door lunch.
Lawmakers say the payments could help Americans, particularly those who lose their jobs, cover short-term costs. The economic turmoil sparked by the coronavirus has fed fears of widespread layoffs and impacted individuals unable to make rent or other monthly payments.
“I think we’ve got to get that relief ASAP,” Sen. Josh Hawley (R-Mo.) told reporters on Tuesday.
Hawley is one of several senators who have rolled out plans in recent days that would inject new funds directly for Americans.
Under his plan, individuals would get a “refundable monthly benefit” that would last for the duration of the coronavirus outbreak.
The level of funding would work on a sliding scale, with families of three getting $1,446 and families of five getting $2,206.
Sens. Tom Cotton (R-Ark.) and Mitt Romney (R-Utah) have both rolled out their own ideas.
“We should send relief directly to American families most likely to be in need — those in the bottom and middle tax brackets — to pay for rent, groceries, childcare, and other necessary expenses, as well as to spend at local businesses that are hurting during this crisis,” Cotton wrote in a Medium post outlining his proposal.
Cotton didn’t offer a specific dollar figure, while Romney is proposing giving every American adult $1,000.
“Congress took similar action during the 2001 and 2008 recessions. While expansions of paid leave, unemployment insurance, and SNAP benefits are crucial, the check will help fill the gaps for Americans that may not quickly navigate different government options,” Romney's office said.
The specifics of what could win over both Senate Republicans and the White House remains under discussion. Mnuchin said at the White House that the administration could place income-dependent restrictions on who would receive the one-time payments.
“I think it’s clear we don’t need to send people who make a million dollars a year checks, but that’s one of the ideas we like,” the Treasury secretary said.
But some Republicans have bristled at the idea, arguing that it won’t help stimulate the larger economy because Americans are likely to save the money over concerns about long-term economic stability.
Sen. Lindsey Graham (R-S.C.), a close ally of Trump’s, called prioritizing giving money directly to Americans “money wasted.”
“It won’t help the economy just throwing money at a problem. I don’t know why giving a thousand dollars on top of their paycheck makes any sense now because there’s no economy to participate in. I’d rather take that money and shore up health care systems,” he said.
Sen. Mike Braun (R-Ind.) also indicated that he thought the payroll tax cut was a better idea, even though it sparked bipartisan backlash.
“I think when it comes to cash payments or this stipend idea, payroll tax would make more sense,” he told reporters.
But the idea appears to have some bipartisan support, a requirement for any legislation to get to Trump’s desk.
“What is being seriously discussed this week is an emergency one-time distribution of $1,000 to every adult citizen. That is something that also happened in 2008-2009 in the fiscal crisis. Economists broadly agree that that sort of immediate cash infusion is a good way to help keep movement in our economy, to help particularly vulnerable families,” Sen. Christopher Coons (D-Del.) told Sirius XM’s "The Michael Smerconish Program."
Former President George W. Bush and Congress approved direct payments to U.S. households during the 2001 and 2008 recessions to help staunch a perpetuating cycle of job losses and declining consumer spending.
While the U.S. enjoyed 50-year lows in unemployment and gradually rising wages before the coronavirus pandemic escalated, the relative strength of the economy before the outbreak may do little to counter the near-total shutdown of entire industries.
Restaurants, bars, retailers, hotels, sports leagues, theaters, gyms and a slew of other businesses, with the exception of grocery stores and pharmacies, have shuttered or severely restricted operations as public health officials urge Americans to adopt drastic social distancing measures.
“People without paychecks because they have been laid off are the people who need immediate relief the most. And hourly wage workers should not have to go to work in order to receive financial assistance from the government,” said Michael Strain, director of economic policy studies at the American Enterprise Institute, a conservative think tank.
“The president and the Treasury secretary are absolutely right to get people cash — and to get it to them in the next week, if possible,” he added.
Jason Furman, who chaired the Council of Economic Advisers under former President Obama, has also advocated for direct aid payments to every American adult while Congress considers further measures to bolster small businesses and industries under pressure.
Furman briefed House Democrats last week with Claudia Sahm, a former Federal Reserve economist who has implored lawmakers to send cash to households.
“We need to send money to everyone now. People do not know today if they are going get the coronavirus, miss a paycheck, or lose their job. All these outcomes were unthinkable a month ago,” Sahm wrote in an analysis last week.
“Now, they are real. People are scared. They need a financial cushion right now, and many do not have one. They need some extra money,” she added.