Economy

White House And Republican Senators Agree On $1T Stimulus Plan

The Republican version of the Coronavirus Aid, Relief and Economic Security Act (CARES Act) 4.0, has been hammered out.

U.S. Treasury Steven Mnuchin told CNBC on Thursday (July 23) that the White House and Senate Majority Leader Mitch McConnell (R-Kentucky) have agreed on a $1 trillion package.

“We’ve had very good meetings over the last few days,” Mnuchin told the network. “This is a negotiation so we need Republican and Democrat support, but we are on the same page with the Republicans.”

Under the proposal, the $600 weekly federal unemployment payments slated to end next week will be replaced with “enhanced unemployment insurance” based on 70 percent wage replacement. The secretary did not provide specifics.

“As we’ve said before ... we are not going to pay people more money to stay at home than work,” he said.

Mnuchin said while the House Democrats’ proposal in May allocated $100 billion to support schools, the GOP plan is worth $105 billion.

“We need to be able to get kids back to school safely,” he said.

On liability protection for businesses and schools, Mnuchin said the proposal would prohibit frivolous lawsuits.

“If companies and schools act in good faith, do all the right things, they shouldn’t have frivolous lawsuits,” he said.

There’s $25 billion for coronavirus testing, the secretary told the network. That includes $9 billion in unused funding from the previous CARES measure and $16 billion on top of that.

President Donald Trump’s proposal for trimming the payroll tax didn’t make the cut.

“The payroll tax cut is a very good pro-growth policy,” Mnuchin said. “But the president’s focus is he wants to get money into people’s pockets now because we need to reopen the economy.”

Mnuchin said the president and Republicans favor a second stimulus check, but he did not provide details of how much and who would qualify.

“The president’s preference is to make sure we send out direct payments quickly so that in August people get more money,” he said.

On cash to the states, the Treasury Secretary said the Democrats want $900 billion. But if the White House agreed, they would ask for $1.5 trillion, he added.

“I’m not sure we ever completely satisfied them,” he said. “But the president is not going to bail out Chicago and New York and other states that prior to the coronavirus were mismanaged.”

He said the original CARES Act contained $150 billion and only 30 to 50 percent has been used.

“We support the Kennedy bill (Sen. John Kennedy, R-Louisiana) which basically says the states that have the money can use it for lost revenues that will take care of virtually every single state,” Mnuchin said. “That’s a very fair compromise.”

The measure will now go the House.

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