Coronavirus

'It's a Very Large Package': Coronavirus Stimulus Plan Now Costs More Than $1 Trillion

Lawmakers are still seeking a compromise.

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The coronavirus stimulus package, a series of financial measures meant to provide relief to Americans in the face of the pandemic, will likely exceed the original $1 trillion price tag, according to Larry Kudlow, director of the National Economic Council.

Indeed, it may exceed $2 trillion, though the White House said that figure includes the impact of Federal Reserve action on loans and that lawmakers are working to keep the legislation under $1.5 trillion. The hypothetical price tag continues to grow as the Senate works to hammer out a final version before a Monday vote.

"The package is coming in about 10 percent of GDP, it's a very large package," said Kudlow.

Released on Friday, the last iteration contained bailouts and loans for businesses large and small, as well as direct payments to some Americans. Specifically, it allocated $300 billion in loan guarantees for small businesses, as many such companies have had to temporarily close or limit service to comply with government-enforced social isolation. Airline carriers would receive $50 billion, cargo carriers would receive $8 billion, and additional "distressed sectors" of the economy would receive $150 billion—all in the form of loan guarantees, which put the federal government on the hook in the event that those companies fail to repay their debts.

In order to curb that risk, the stimulus bill gives the federal government an equity stake in some of the big businesses that would receive loans. It also forces airlines to limit executive compensation until the loans are paid off and requires that they continue service. The latter stipulation may generate pushback amid orders to stay home and self-quarantine.

Direct payments would be available to Americans whose 2018 tax returns show them making less than $99,000 a year. Checks would amount to $1,200 per person, though those benefits start to gradually decrease once an income surpasses $75,000. Married couples who file jointly must make less than $198,000 to receive a check, and benefits would phase out for those couples who make more than $150,000. An additional $500 would be available per child. 

But that proposal only carved out $600 for those with little to no taxable income which drew the ire of some Republicans and Democrats. "Relief to families in this emergency shouldn't be regressive. Lower-income families shouldn't be penalized," tweeted Sen. Josh Hawley (R–Mo.). Sen. Debbie Stabenow (R–Mich.) echoed that sentiment: "I couldn't believe that they were talking about lowest-income people getting $600 and somebody making $75,000 getting twice as much as that, $1,200," she said, according to The Hill. "Those numbers don't make any sense."

Costs are also expected to escalate as Democrats lobby for increasing Social Security benefits, bolstering unemployment insurance, and expanding Medicaid. Negotiators reportedly were successful in inserting a payroll tax holiday for small businesses. Also on the table is a stabilization fund to help state governments with revenue shortfalls and financial assistance for healthcare institutions slammed by an influx of coronavirus patients.

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  1. Well, at least they learned to at least pretend that the bailout is aimed at Joe Citizen this time.

    Half the reason that Trump, Bolsonaro, Modi, etc have been so successful is the rage at the enormous theft by the global elite from the financial meltdown bailouts.

    1. Yep. It’s just an anti-revolution check while they rain trillions upon the banks and the corporate cocksuckers.

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  2. “…and I assure you, the President has a very large package.” – Joe Biden

    1. Came to the comments to see if someone made a dick joke about the statement regarding the stimulus. You already got it covered.

      Thanks

      1. Eunuch is always quick to compensate

  3. lawmakers are working to keep the legislation under $1.5 trillion.

    WHY DO THEY HATE AMERICA?!

    1. I could keep it under 1.5 dollars. No bailouts. Suspend the stay-at-home orders issued by a few rogue governors and get people back to work before it’s too late.

  4. Koch / Reason libertarianism already provides the ideal method to stimulate our economy:

    Open. The. Borders.

    Of course we have other useful suggestions, like setting the minimum wage at $0.00 / hour. But as long as alt-right white nationalism is the official government policy, the #DrumpfDepression will continue.

    #ImmigrationAboveAll

  5. It’s not such a big package when you consider the amount of screwing they plan on doing with it. Something something hotdog down a hallway.

  6. Well…

    Looks like we are going to learn how MMT really works out.

    [Shelters in place]

  7. You know who had an incomplete package?

    1. Hillary Clinton.

    2. Jeff Bezos?

    3. Here is a hint.

    4. Some Austrian with one ball?

      1. Arnold Schwarzenegger is an Austrian with one ball.

        1. and two ponies

  8. Annnnnnnnnnnnd beaches closed.
    Spring breakers will be roaming the streets like zombies

  9. Why am I not surprised that airlines and everyone else gotta get their take?

    Perhaps they should’ve had 3-6 months worth of savings for just such an occasion. Fuck this corporate bailout bullshit. They took their tax cuts and did stock buybacks. They can lay in the grave they dug.

    1. Like most libertarians it’s all about the masturbation. Nothing will come of our exercises.

    2. Looks like Trump is gonna bail out his own businesses too.

    3. To his credit, Bernie is the only one who has spoken out against corporate bailouts for COVID-19.

      1. And Nikki Haley resigned from her board seat at Boeing because they have their hands out

        1. Yes, I was glad to see her do that too

  10. This is fucking crazy.

    1. It’s hard to do that while maintaining a 6′ safe space

      1. Sometimes it’s worth the risks

  11. Well, thank god I filed my taxes last year…

  12. “ But that proposal only carved out $600 for those with little to no taxable income, which drew the ire of some Republicans and Democrats. “Relief to families in this emergency shouldn’t be regressive. Lower-income families shouldn’t be penalized,” tweeted Sen. Josh Hawley (R–Mo.). Sen. Debbie Stabenow (R–Mich.) echoed that sentiment: “I couldn’t believe that they were talking about lowest-income people getting $600 and somebody making $75,000 getting twice as much as that, $1,200,” she said, according to The Hill. “Those numbers don’t make any sense.””

    Yes they do.

    The checks are designed to (somewhat) compensate people who are losing income as a result of the government shutdown of the economy. If you’re not making any money, or very little, you’re not losing anything because the economy has shut down.

    That said, put me on record stating the checks are a bad idea. A way to say “we’re doing something!”, but that won’t accomplish very much in the real world. If we’re being honest, $1200 isn’t that much money. It won’t go very far for most people, though admittedly it could greatly help some people on the margins. It’s largely a gesture. It’s the equivalent of kicking in $5 to your friend on a $65 fill-up at the tank. It’s the government handing you a crutch after it’s broken your leg, and acting as if it makes them helpful.

    Even families like mine, who will qualify for $3400 in the even qualifications change (married, 2 kids, less than $150k/year) won’t get *that* much help, especially when compared with the massive loss we’ll have to take selling stock to pay our 2019 tax bill (2019 included a 1-time, very large shot of money from a lawsuit that was dutifully invested several months ago but has been absolutely hammered in the last month). In short, for most middle class families government has created a situation in which everyone’s portfolio has decreased by 1/3 or more, and saying here’s a couple of percentage points back.

    1. A $1.5 trillion package that only provides a couple grand per household for an event that will run for months? There’s a disconnect coming to the unwashed masses.
      MMT and bust, here we come.
      At least there will still be old folks around to book cruise trips.

  13. Well hell, they wiped trillions off the GDP already, it’s only fair they stuff trillions back in.

    1. You know this is coming out of the discretionary spending of consumers by way of their future paychecks, right?

      Not enough water in the reservoir so that everybody can get a drink? I know! Let’s drain the reservoir–and give it to their employers.

    2. it’s only fair they Chinese and Japanese lenders stuff trillions back in.

      There, fixed that for you.

    3. Whoever created the GDP formula should be forced to take remedial math and logic. The government can’t add to GDP, anything they spend subtracts from what the productive sector of the economy creates.

      1. Yeah it’s not really surprising that government latched on to GDP as the most important measurement, because in that equation government spending is GOOD.

  14. loan guarantees . . . put the federal government on the hook in the event that those companies fail to repay their debts.

    Student loans are guaranteed by the federal government too, but they’re not dischargeable in bankruptcy. There’s no reason why a provision couldn’t be added to the stimulus bill stipulating that the business loans cannot be discharged in bankruptcy. Ideally, any business bellying up to the federal trough during the crisis would also be subject to a piercing of the corporate veil, such that officers could be held personally liable for any loans not repaid. If TARP is any indication, most of the major players would eventually repay their loans with interest, even if it meant filing for chapter 11 protection first; it’s the smaller fry, the ones most vulnerable to economic swings, that would be most likely to default.

    That being said, I realize the thought of piercing the corporate veil is purely a pipe dream.

    And damn, I never realized until just now how freaking awkward it is to type “bankruptcy” on a QWERTY keyboard.

    1. Banks don’t want to hold bad debt–not when everyone else is holding it, too.

      “A toxic asset is a financial asset that has fallen in value significantly and for which there is no longer a functioning market. Such assets cannot be sold at a price satisfactory to the holder.[1] Because assets are offset against liabilities and frequently leveraged, this decline in price may be quite dangerous to the holder.”

      https://en.wikipedia.org/wiki/Toxic_asset

      The solution is bankruptcy.

      Just like during the housing crisis, the solution was getting the deadbeats out of their houses by foreclosing–not keeping them in their houses for as long as possible. Toxic assets just made things worse. You get the homes themselves rented out or bought by other buyers, and ship to starts to get right again. The assets behind those bad loans to businesses are just like that. Get those assets in the hands of businesses that aren’t under water, and we can get them productive again instead of working through an impossible amount of debt.

      1. That would not be a politically tenable solution at this time, unfortunately. It would be decried in the media as favoring big business at the expense of the little guy. In any case, what criteria would you propose for determining which businesses were suitable risks, and how would the government go about completing its audits in anything resembling a timely manner?

        1. I would argue that what’s politically untenable is necessary. Those businesses aren’t about to start hiring again with all that debt on their books anyway. I would also point out that the origin of the Tea Party circa 2008 had to do with opposition to bailing deadbeat homeowners out with taxpayer money.

          This is the very moment the Tea Party started.

          https://www.youtube.com/watch?v=zp-Jw-5Kx8k

          It’s the same argument right now. Santelli is saying that instead of bailing the deadbeats out, they should let the banks foreclose and get those assets to people–instead of dragging the economy down by bailing people out. TARP was politically untenable, and that’s why John Boehner and the other TARP enthusiasts were driven out of the Republicans party in the primaries–as well as out of power by the Tea Party.

  15. Well if you can’t get what party Sen. Stabenow is from how do i know if any of your facts are right?

  16. Well, the schools are all closed. Shut down the Dept of Education to save the money being spent.
    Same for the Department of Commerce. No businesses open, who needs it?
    Ditto Dept of Labor. No one working, who needs it?
    Oh, yeah – then leave them shut.

    1. Hmm. How about the Treasury Dept? It seems that may no longer be needed as well.

      1. Considering the fact that Congress apparently has the discretion to grant the Consumer Financial Protection Bureau largesse directly from the Federal Reserve (someone please explain to me how this funding mechanism hasn’t already been challenged in court), thereby doing an end-around the Treasury, it would seem that the Treasury Department has indeed outlived its usefulness.

    2. Shut them all down and save 0.1% of what this is going to cost. Big deal

  17. While this pandemic shall pass, Cronyvirus is eternal and ever-expanding.

    1. Unicorn….love the cronyvirus moniker. I use it shamelessly (but attribute to you). That was inspired. 🙂

      Stay healthy, stay safe.

      1. Nobody is safe from the cronyvirus. The symptom is government taking money from you to give to someone else.

  18. I’m not sure this guy has all of his facts right. But I sure love his optimism!

    Globalists May Soon Become an Extinct Species

  19. Why largesse for Social Security receipients? We are just about the only ones who can continue to expect a check every month just like before. And why through 2021? Do the Dems expect the lockdown of the economy to last that freaking long? More damn pandering for AARP votes.

    1. yeah, senior citizens are spending less than before, since it’s not safe for them to go out or take vacations right now. they could shave a little off those checks to help reduce the deficit.

      1. And all members of Congress could donate their year’s salary to the treasury…
        Lol

  20. Wife and I are fortunate enough to be able to work from home through all this. We plan to donate our checks to people who actually need it.

    1. I’m working from home too, but I’ll be donating my pay to myself. I’ll need it later to pay my taxes.

      1. Eventually, it will all get “donated” to the government at the point of a gun. Thanks for your support comrade.

  21. Kudlow, the Reaganite.

  22. Another trillion they don’t have, to be borrowed and paid back by the long suffering American taxpayers. Not to mention what the unchecked inflation they are unleashing will do to the savings of the few responsible people in this country who actually have savings.

    1. Government can do no good
      Government can only redistribute and do harm.

  23. Speaking of large amounts of money, the Albert Camus estate is really making out like bandits with new sales of The Plague.

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  25. This Trumpulas is just an even more “biggly” piggly version of Obama’s Porkulas, and something Trump has sought from the start. Trump is not, per Rahm’s advice, letting this C-19 crisis got to waste.

    Trump is Obama’s third term.

    1. Ok, Bernie bro

    2. I thought it was GWB’s 5th term?

      1. Unfortunately, GWB’s 5th fits nearly as well on substance and fiscal accounting; but GWB at least lacked some of Obama’s and Trump’s “…reward our friends and punish our enemies…” blatant embrace of government as, but, stationary bandits.

  26. Why not 10 trillion it’s all just numbers in a computer.

    1. You know the debt is 25 so lets do 5 trillion and make it an even 30.

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  29. It is now Sunday, and nothing about this package is known. It constantly changes. If the Congress is going to do it, then do it quickly and get it over with. As a taxpayer, I would expect to see.

    – No grants to businesses; loans only. Could even be 0%
    – No business recipient may use the loans to buyback stock
    – Executive compensation of business recipients is on the table
    – After 200K income annually, there is no individual check
    – Speed matters. It is critical to push out money quickly

    There were many lessons learned in 2008-09 that need to be applied here. I am not a fan of bail-outs, and viscerally opposed TARP. That said, it is government actions here (national shut down, more or less) that are affecting businesses and citizens.

    What we do not want: Millions unemployed, homeless, and hungry.

    What we do want: A temporary bridge to address the extreme economic dislocation that is happening right the fuck now.

    There are times where reality must overcome logic and ideology. I would submit that this is one of those times. We have a national emergency, and different rules now apply. As much as I dislike government intervention, and I don’t like it….I like the alternative a hell of a lot less: mass unemployment, no safety net.

    To me, this may be the least-worst alternative in a large set of unattractive choices.

    1. You seem to realize, unlike apparently many, that the government is not a bottomless pit of money. So how can you justify diverting a single dollar, that could be spent on test kits and other badly needed medical supplies, to bail out businesses?

      And why do you believe that government intervention is the alternative to mass unemployment? Isn’t it possible that it will lead to more unemployment? That’s certainly my belief.

      1. Because we need to plan for the day after. Meaning, when the curve is flattened, the restrictions lifted; there is a day after. American businesses need that bridge between now (economy stopped) and when we ramp up again, perhaps a month or two away.

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  31. From The Hill:

    “Faced with an extreme time crunch, negotiators have resolved disagreements that might otherwise take weeks to iron out by simply agreeing to include both sides’ priorities”

    (That’s the Washington definition of “compromise”.)

    1. “include both sides’ priorities”

      “See? It’s a win-win!”

      1. I figured that was what was happening when the price tag kept going up. Not let’s pile more money into a good idea, but let’s throw money at all pet ideas. Cronyvirus indeed.

        Oh, and if businesses spent billions buying back stock, then they can raise millions on their own by selling that same stock now before attaching themselves more firmly to the govt teat.

    2. Yeah this is par for the course. GOP wants money for warfare, Democrats want money for welfare, so they “compromise” and fund both.

  32. This stimulus package is the height of worshiping at the altar of Keynesian economics: “Demand creates supply”, which is absolute bullshit. All that’s being done is printing money and handing it out. No wealth is being created; it doesn’t create ventilators, face-masks, or other badly needed medical supplies, which is what we need. It’s just paper!

    1. I completely agree, as far as you go. I’d add, though, that the Keynesian multiplier being less than one and the increased money supply being inflationary; this, like all stimulus, is nearer a taking than a giving. Like Trump’s tariffs it’s a way to, effectively, increase taxes and grow government, while telling the gullible that he’s cutting both.

  33. Now is certainly not the time to worry about borrowing money or the federal deficit but it should go without saying, as it always should, that any money that’s spent should be spent wisely. So doesn’t it make more sense to spend it all on test kits and other medical supplies? How can you possibly support millions of dollars, that could be spent on such kits, instead being given to the Boeings and Delta Airlines of the country? It’s unconscionable

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  36. “It’s a very large package.”

    That’s what shesaid.

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