Prospects for another round of economic relief from Washington are hazy.
House Democrats passed a $3 trillion fiscal package Friday, but Senate Majority Leader Mitch McConnell and President Trump have indicated they’re not interested in negotiating it.
Republicans have derided the 1,800-page bill as a liberal wish list. Rep. Tom Cole of Oklahoma called it “a Democratic agenda masquerading as a response to the coronavirus pandemic.”
Senate Majority Leader Mitch McConnell said Thursday on Fox News that he is not “ruling out” another fiscal package but would prefer to see the full effects of the trillions in aid already signed into law.
Trump is also wary of entering negotiations with Democrats on another massive bill and has no “immediate plans” to pursue another economic stimulus package, White House press secretary Kayleigh McEnany said Friday.
“At this point, I think he’s looking closely at what we need to spend if a phase four does occur. These are taxpayer dollars. He wants to move forward wisely,” McEnany told reporters.
Like the March CARES Act, Friday’s bill would provide $1,200 relief tax rebates to individuals. It would also allocate up to $1 trillion to state and local governments, $200 billion in hazard pay to essential workers most vulnerable to getting sick on the job, $75 billion for an enhanced national testing system, and a tax credit for employers who keep their employees on the payroll.
White House chief economic adviser Larry Kudlow suggested an alternative stimulus plan Friday — cutting the corporate income tax rate in half to incentivize overseas companies to move their operations to the United States.
“Maybe the corporate tax rate of 21% should be lowered by 50% to about 10.5% for corporations who are coming back home. Maybe. That’s something to look at,” Kudlow said in an appearance on Fox Business.
Democrats would likely object to Kudlow’s plan if it were to end up in a stimulus package, having opposed the 2017 tax reform bill, which slashed the corporate tax rate from 35% to 21%.
Kudlow, like McConnell, said he was apprehensive about beginning negotiations on a fourth fiscal package, saying that he, Treasury Secretary Steven Mnuchin, and others did not want to “jump in” on a “gigantic negotiation” until they see how far the trillions from previous packages can go.
McConnell and the White House, though, so far are not on the same page regarding assistance to states and cities. McConnell has suggested such a measure would be a “blue state bailout,” while the administration has indicated that Trump would be interested in negotiating aid.
Chances are both parties will have to discuss another relief package at some point, given the level of damage the pandemic has done to the economy. Two new reports Friday illustrate the severity of the downturn and the scale of what will be required for recovery.
Industrial production and retail sales both plummeted by record amounts in April. Retail sales were down 16.4%, according to the Census Bureau. Meanwhile, factory production fell 11.2%, the largest monthly drop since the Federal Reserve began keeping track over 100 years ago.
Manufacturing has been hit especially hard since the start of the pandemic about two months ago. Output dropped 13.7% from March, the sharpest decline on record. The chief reason behind the industry’s historic fall is that the output of vehicles and parts fell over 70%.
Trump said Friday the country would “fight through it,” adding that the U.S. will return to normal with or without a vaccine.
“Vaccine or no vaccine, we’re back. And we’re starting the process,” Trump said in the Rose Garden Friday as he unveiled the administration’s vaccine initiative called “Operation Warp Speed.”
In addition to staggering economic damage, the coronavirus has killed at least 86,700 people in the U.S. and over 306,000 worldwide, which experts now believe may be an undercount.
The Wall Street Journal found that 30% more people died in mid-April this year than in the same time period in previous years. COVID-19 deaths in March and April of this year far outpaced deaths due to flu, pneumonia, suicide, and other causes in March and April of 2016 to 2018.
The National Center for Health Statistics collects death certificates from funeral directors, physicians, and coroners in order to calculate how many deaths were attributed to COVID-19. However, it can take months for the NCHS to collect the death certificates and compile the mortality data, and states vary in how quickly they make death certificates available to the NCHS. Uneven reporting makes gathering accurate mortality data far more difficult.
