The US government is weighing up sending cheques to American citizens as it tries to negotiate a $850bn (£700bn) stimulus package with Congress to deal with the economic consequences of coronavirus.
US Treasury secretary Steve Mnuchin said the government could send cheques – which could be worth $1000 – to Americans in the next two weeks. “The president has instructed me we have to do this now,” he said at a press conference.
Mnuchin said that although President Donald Trump was keen on a payroll tax cut, such a measure would take months to have an effect. He said the Trump administration wants to act faster than that.
The potential stimulus package marks a change of pace for the government, with Trump only last week playing down the seriousness of the virus.
It came as the number of US coronavirus cases rose past 5,000 and as major cities such as New York put in place “social distancing” policies. The effect of such moves on bars, restaurants and shops is likely to decimate the economy.
Although Trump has conceded the US may be heading for a recession, he said today that it would bounce back. “We’re going to win and I think we’re going to win faster than people think, I hope,” he said.
The government is seeking an $850bn stimulus package, according to various reports today, which could include $50bn for airlines and $250bn for small business loans.
There are likely to be intense negotiations over the money, however, with the Trump administration known to be keen on payroll tax cuts but the Democrats pushing for funding that targets the poorest.
The US Federal Reserve – which pleased Trump by slashing rates to zero – today unveiled a scheme to buy short-term corporate loans to support businesses facing a credit crunch as the economy slows amid the virus outbreak.
Markets were cheered by the intervention, with the S&P 500 climbing 6.1 per cent and the Dow Jones rising 5.4 per cent.
The rise on Wall Street was not enough to recapture yesterday’s losses, however, when the S&P 500 plunged 12 per cent.