The Trump administration reportedly is drafting a series of short-term measures to offset the steep and dramatic drop in economic activity related to the coronavirus, and help slow its spread in the U.S.
The White House and Treasury officials reportedly have been discussing several possible options, including a temporary expansion of paid sick leave and possible help for companies facing disruption from the outbreak, according to reports.
The economic package is still being debated and hasn’t yet been presented to President Donald Trump. The timing of any of the economic measures on the table also was unclear, though reports suggested they would be rolled out on a step-by-step basis, starting with aid to infected Americans and then expanded to companies and workers affected by lost business, Bloomberg reported on Monday.
Turmoil in global markets deepened on Monday after oil prices crashed following a breakdown of talks between OPEC and Russia. Brent crude plunged more than 30%, while bonds surged as investors sought havens, sending the entire Treasury yield curve below 1% for the first time in history.
That followed a weekend of rapid developments surrounding the onslaught of the global coronavirus pandemic, which as of Monday had surpassed 110,000 infections and nearly 4,000 dead, with one one-quarter of Italy’s population in lockdown and U.S. health officials warning its domestic spread is all but assured.
At issue is the triple-whammy impact of slowing trade and production due to the coronavirus, which has all but shuttered China since January, massive declines in consumer spending resulting from the onslaught of the virus, and now the crash in oil prices at the hands of a disagreement between Russia and OPEC on whether to curb supply to keep prices from falling.
Pressure is growing on Trump to take more decisive action in response to the virus outbreak, as the number of cases in the U.S. and worldwide continues to grow. Stock futures in the U.S. were down almost 5% in trading ahead of the Monday market opening in New York, triggering exchange rules that limit declines.
Trump and his top economic adviser, Larry Kudlow, have both questioned whether a broad intervention would be needed in response to coronavirus, pointing to Friday's strong jobs report. But Kudlow also said on Friday that limited measures might be considered.
A short-term expansion of paid sick leave is drawing the attention of top administration officials because it would cost less than another proposal floated in recent weeks: a temporary payroll tax cut, Bloomberg said, citing people familiar with the discussions.
Officials drafting the package are aware that funding a temporary expansion of sick leave is only helpful if public health authorities can accelerate testing of individuals suspected of having the virus. Yet, the U.S. has struggled to roll out testing nationwide; as of Saturday fewer than 6,000 samples from Americans suspected of the coronavirus infection had been tested.
On Friday, Trump signed a $7.8 billion emergency spending bill that reimburses state and local governments for the cost of fighting coronavirus. It also includes $3.1 billion for stockpiling medical supplies and $300 million for government purchases of tests, vaccines and therapies to ensure that low-income people have access.
Another provision in the bill Trump signed unlocks as much as $7 billion in low-interest loans to small businesses affected by the outbreak. Lawmakers say they expect Congress will have to provide more emergency funding before the virus outbreak subsides.