President Donald Trump unveiled a number of executive actions designed to blunt at least some of the economic impact of the coronavirus, which continues to spread across the United States.
In an address to the nation televised from the Oval Office, Trump termed these actions an “unprecedented response” to the COVID-19 outbreak marshaling “the full power of the federal government and the private sector.”
Among the mandates: The suspension of all travel from Europe to the United States for the next 30 days beginning Friday. That suspension includes the “tremendous amount of trade and cargo,” said Trump. The restrictions will not apply to the United Kingdom.
He repeated the fact that he met earlier in the week with leaders from the insurance industry and reached an agreement where insurance companies have agreed to waive all copayments for coronavirus related treatments to prevent “surprise medical billing.”
In reference to the economic impact of the virus, he said that “to ensure that working Americans impacted by the virus can stay home without fear of financial hardship, I will soon be taking emergency action, which is unprecedented, to provide financial relief.”
The efforts to provide financial relief, he said, will be targeted to workers who are ill, quarantined or caring for others to the coronavirus.
He said that he had instructed the Small Business Administration to provide capital and liquidity to firms affected by the virus.
Effective immediately, he said, the SBA will be providing low-interest loans to small businesses in affected states and territories. Trump also said he would ask Congress to increase funding for this program by an additional $50 billion.
He also invoked emergency authority to defer tax payments without interest or penalty to specific individuals and businesses negatively impacted by the virus. This action, he said, would provide an additional $200 billion of liquidity to the economy.
He said that he was also calling on Congress to provide immediate payroll tax relief.
Afternoon Meeting With Bankers
The Wednesday evening speech followed a meeting Wednesday held at the White House, where Trump met with several CEOs of the largest banks in the United States, to hear thoughts on how to work with and support small- to mid-sized enterprises in the United States grappling with the continued fallout from the spreading coronavirus.
Those in attendance included CEOs Michael Corbat of Citigroup, Charles Scharf of Wells Fargo, Brian Moynihan of Bank of America and David Solomon of Goldman Sachs. Representing JPMorgan Chase was co-president Gordon Smith (CEO Jamie Dimon, as has been widely reported, has been recuperating from heart surgery). The meeting was also attended by Treasury Secretary Steve Mnuchin, and several industry representatives such as Richard Hunt, president of the Consumer Bankers Association and American Bankers Association President Rob Nichols.
“We’re discussing the economy, we’re discussing how it relates to jobs and all of the things that are happening right now with the virus,” said Trump, who added that “I’d like to hear the wisdom from some folks in the room.”
BoA’s Moynihan said that even with the uncertainties tied to the virus and oil, “we are very strongly capitalized. We are in a great position in terms of liquidity, capital and strength.” He said that smaller business clients would continue to have access to credit. He noted that all of the banks have been seeking to provide relief to customers affected by the virus. He said that small business loans and auto loans continue to grow and “mortgage loans obviously are very strong.”
Added Corbat, the head of Citigroup: “This is not a financial crisis...the banks and the financial system are in sound shape and we are here to help.” He said that the oil price shock and coronavirus are leading markets into a period of price discovery — what earnings are going to look like and where valuations should be.
“The good news is that the markets have performed in an orderly way ... through some pretty big tests,” said Corbat.
During his commentary at the meeting, Mnuchin noted that vaccines might be a year to a year and a quarter away.
Other commentaries from attendees emphasized the importance of fiscal stimulus and the need to help individuals and families living paycheck to paycheck. Lower rates are, in turn, translating to new opportunities for homeowners to refinance mortgages, or for others to own their first house.
JPMorgan’s Smith pointed out that his bank has forbearance plans in place to help customers.
“The question is: Are we still lending? And over the course of the last 40 days at JPMorgan, we’ve extended $26 billion worth of loans to consumers and small businesses. He said, too, that any pullback in consumer spending has been tied to older individuals, while millennials’ spending has held up “very well.”