Economy

Kudlow: Gov't Eyes Cash Bonuses To Get People Back To Work

Trump Advisor Larry Kudlow: Q2 Will Be Worse

Larry Kudlow, director of the U.S. National Economic Council, said he thinks the idea of cash incentives for people going back to work could be in the cards.

"It's something we're looking at very closely," he said, speaking to CNBC. "We may go with something like that."

Kudlow said there would come a point when the federally-mandated extra $600 unemployment bonuses wouldn't be feasible anymore as the economy continues to blossom back open because people may be making more on unemployment than they would at their old jobs.

"Everyone, all sides of the spectrum, have acknowledged that, that is a disincentive to go back to work," he said. "So, we want to promote work; we don't want to obstruct work."

Kudlow said the economy is gradually reopening across the country, and May and June would be the likely in-between points where the transition happens, with an eye toward a windfall recovery in the second half of the year.

He also offered an optimistic take on the unemployment numbers.

"Maybe as much as 75 percent [of the unemployment numbers] looked like temporary layoffs," he said. "Now, you can't be sure, but ... if that is true ... then we may see folks coming back to work faster than we might have thought, let's say, a month or six weeks ago."

CNBC asked what Kudlow could foresee happening in the case of those businesses that end up closing down or needing more financial aid further down the line, even as other parts of the economy start to do better. Kudlow said it was possible that more government intervention could happen in that case.

"We'll take a look at it," he said. "We've never had anything like this [in] 100 years. [It's] very hard to do any economic modeling around this."

Kudlow said more businesses reopening, people beginning to go out again and virus infections adjusting downward are good signs.

"We want the economy to recover," he said. "But it's got to be done safely. ... I remain optimistic ... that we're going to have a [very] strong bounce-back in the second half of the year."

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