Mar 19, 2020 - Politics & Policy

The growing coronavirus stimulus packages

President Trump and Treasury Secretary Steven Mnuchin, joined by members of the Coronavirus Task Force. Photo: Drew Angerer/Getty Images

As the Senate was passing a "Phase 2" stimulus package Wednesday to address the coronavirus, the White House and leaders on Capitol Hill were pushing ahead on a "Phase 3" deal that would pump an additional $1 trillion into the economy.

Why it matters: In just a few weeks, the White House has gone from proposing a few billion dollars in quick aid to one of the largest and most expensive stimulus packages in modern history.

Here's a breakdown of the three economic measures the government has passed, or is in the midst of negotiating:

Stimulus Phase 1

In late February, President Trump asked Congress to provide $2.5 billion to fight the spread of the virus. But after negotiations with Congress, they settled on $8.3 billion. The measure, signed into law on March 6, provides:

  • Extra funding for the Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), National Institutes of Health (NIH), the State Department, the Small Business Administration (SBA), and the United States Agency for International Development (USAID).
  • It includes $4 billion to make more coronavirus tests available, and $1 billion in loan subsidies for small businesses.
Stimulus Phase 2

The package, negotiated by Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, was signed into law by Trump Wednesday night. It's unclear exactly how much the bill will cost. The Congressional Budget Office has not yet scored it, while the Joint Committee on Taxation estimated it will cost roughly $100 billion.

The measure provides:

  • Free coronavirus testing including for the uninsured.
  • Two weeks of paid sick and family leave.
  • Increased federal funds for Medicaid and food security programs, like SNAP.
  • Increased unemployment insurance benefits.
Stimulus Phase 3

The Treasury Department released a $1 trillion relief proposal Wednesday that would include industry-specific bailouts and payments to individual taxpayers. The proposal would provide:

  • Two rounds of direct payments to taxpayers, on April 6 and May 18, costing $250 billion each. The amounts would be based on income level and family size.
  • $300 billion in small business loans. (Employers with 500 employees or fewer would be eligible.)
  • A $50 billion bailout for the airline industry.
  • $150 billion to other industries affected, including hotels, casinos, cruise line operators and shopping mall operators.
  • Guaranteed money market mutual funds.
The big picture

It wasn't so long ago that the measures to address the 2008 financial crisis seemed like once-in-a-lifetime interventions.

  • Back then, the government authorized $900 billion in bailouts — $700 billion initially toward helping big banks and auto companies, and later $200 billion to rescue Fannie Mae and Freddie Mac, the giant mortgage enterprises.
  • But as Axios' Dan Primack and Jennifer Kingson note, far less than the total $900 billion was actually spent.
  • By the time the programs were declared ended in 2014, the government had actually turned a profit on those bailouts.
  • The 2009 stimulus package, the American Recovery and Reinvestment Act, cost roughly $800 billion and funneled money into aid to state and local governments, safety net programs, tax relief, and construction and investment projects.

Go deeper

A lifeline emerges for the devastated airline industry

American Airlines planes parked at Los Angeles International Airport. Photo: Alex Tai/SOPA Images/LightRocket via Getty Images

Congress' massive $2 trillion coronavirus stimulus package includes $58 billion for U.S. airlines, half in grants to cover 750,000 employees' paychecks, and the rest in loans or loan guarantees to help them keep operating during the worst travel downturn in history.

Why it matters: With some 80 million U.S. residents under mandatory stay-at-home orders and the coronavirus pandemic continuing to spread, hardly anyone is flying these days. But when the public health crisis ends, airlines want to be able to take off again quickly.

McConnell releases Phase 3 coronavirus stimulus proposal

Senate Majority Leader Mitch McConnell. Photo: Mandel Ngan/AFP via Getty Images

Senate Majority Leader Mitch McConnell's proposal for a "Phase 3" stimulus package in response to the coronavirus outbreak includes cash payments to many Americans and billions for small and large businesses.

Why it matters: The plan would be part of one of the largest and most expensive stimulus packages in American history.

Go deeperArrowUpdated Mar 19, 2020 - Politics & Policy

Stocks surge despite record-breaking unemployment claims

Photo: Luiz Roberto Lima-ANB/Pacific Press/LightRocket via Getty Images

U.S. stocks shrugged off news of a record-breaking 3.3 million unemployment claims last week, closing higher for the third straight day as Congress moved closer to passing a $2 trillion coronavirus relief package.

Driving the news: Speaker Nancy Pelosi said Thursday that she expects the House to pass the Senate's rescue bill — the largest of its kind in U.S. history — on Friday, before moving on to a potential "Phase 4" package.