$1,000 checks for workers, and ideas to boost small business in shutdown
The Trump administration is backing direct payments to American workers to help people cope with the economic shutdown with the national coronavirus response.
The checks would likely be $1,000 or more per taxpayer, and the goal is to get them out in the next two weeks, according to Treasury Secretary Steve Mnuchin.
The proposal is the first significant response from the Trump administration and GOP leaders to address the impact the national shutdown will have on workers, and could have at least a short-term positive impact on the macroeconomy, which is dependent on consumer spending from the working and middle classes.
U.S. Sen. Mark Warner, D-Va., offered more ideas to boost the fortunes of workers and small-business owners, many of whom face potential calamity with restaurants, coffee shops and retail stores shuttering due to physical distancing requirements in the federal COVID-19 response guidelines.
“We have to get cash flow back to our small and mid-sized businesses so that they can remain open, retain their employees, and survive through this public health emergency,” Warner said. “Nearly 18 million people are employed in industries whose revenues are severely curtailed and are vulnerable to layoffs. Many businesses, particularly small and mid-sized firms, are running down their cash and credit lines. As we see more areas enforce tighter social distancing restrictions, this problem is only set to get worse.”
Warner is proposing the creation of a small and mid-sized business liquidity facility, jointly run by the Treasury Department and Federal Reserve, to provide companies affected by the virus with federally-guaranteed loans at low rates throughout the crisis.
The loans would be delivered through local financial institutions and backed by up to $1 trillion in federal financing.
Elements of this proposal include:
- Simple terms and underwriting requirements in order to quickly deliver cash flow to these businesses.
- Protections to ensure that any company taking a loan is required to retain a large portion of its workforce.
- Some specific mechanism to avoid any moral hazard and hold financial institutions accountable.
“If we do not take action immediately, thousands of American businesses and millions of their employees are at enormous risk. I look forward to working with my colleagues in the coming days to provide them the assistance they need to weather the current crisis,” Warner said.
Story by Chris Graham