The $1 trillion stimulus package working its way through Congress is many things: checks in the mail to workers, $50 billion for airlines, and loans for small businesses whose customers are staying at home through the coronavirus emergency.
Just don’t call it a bailout.
White House officials and senior Republican leaders have taken pains to differentiate these emergency measures from the 2008 stimulus that angered fiscal conservatives and, in rescuing failing Wall Street giants, turned a swath of the electorate on to populist politics.
“We’re not calling it a bailout because it’s not a bailout,” said one official. Businesses are suffering not because they are failing but because consumers are following President Trump’s advice to stay at home, avoid groups of more than 10 people, and self-quarantine at the first sign of COVID-19, he said.
Insiders say the proposals will reach Trump’s desk in short order, propelled by a shared sense of crisis and the political cover of the commander in chief. The president unveiled the package at the White House standing alongside Treasury Secretary Steven Mnuchin, including the headline-grabbing idea of sending checks to workers.
A day later, Trump underlined the political justification.
“We want to take care of — we have to help everybody,” he said during one of what have become regular appearances in the briefing room. “It was nobody’s fault. This happened.”
The starting point is a Treasury proposal for two $250 billion rounds of direct payments to individuals. The first will be sent out on April 6, the second on May 18, according to the draft seen by the Washington Examiner.
Then, there is $50 billion in secured lending to U.S. passenger and cargo air carriers — plus another $150 billion for other “distressed sectors” and a $300 billion small-business interruption loan program for companies with fewer than 500 employees.
When Mnuchin brought the proposals to Senate Republicans, he reportedly asked them not to talk about “bailouts.”
There will be haggling as Republicans on Capitol Hill thrash out a bill with the White House and then more back-and-forth as Democrats come in with their own proposals and complaints.
There will be arguments about whether the United States and the wider world could have been better prepared for an unfolding pandemic of a novel virus. And Democrats wonder whether airlines in particular should have been more prudent in the good years ahead of 2020.
“One of the reasons,” said Minority Leader Chuck Schumer on the Senate floor, “that many airlines are so short of cash right now is they spent billions on stock buybacks — money they had to send out when they should have been saving it for a rainy day, for their workers and customers.”
But all expectations are that legislation will be hurried through by the start of the week in large part because conservatives are falling into line.
“There’s a reason why Republicans are in favor of this and why the 2008 bailout was really unpopular here in Congress and with the American people,” said a senior Republican source on the Hill. “It comes down to the fact that the banks had to be bailed out of the stupid mistakes they had made.”
The source continued: “The rationale was you had to help them so the whole system doesn’t grind to a halt. … This time, families and businesses are being forced to shut their doors or stay at home for something they had no control over.”
All in all, that makes the estimated $1 trillion check far bigger than the recession-fighting stimulus passed by Congress 2008 and 2009 during the financial crisis.
But the difference, said the senior Republican, is that the bulk will be directed to businesses with fewer than 500 employees and individuals earning less than $75,000 and families making less than $150,000.
“That’s quintessential middle America.”
