Mar 22, 2020 - Economy & Business

Architect of Trump's coronavirus stimulus plan says it's too little, too late

Dion Rabouin, author of Markets

Former Council of Economic Advisers chair Jason Furman, December 2017. Photo by Zach Gibson/Getty Images

The Trump administration's proposal to send Americans $1,000 checks is now too little, too late, the plan's architect tells Axios.

What happened: Trump and Treasury Secretary Steven Mnuchin took two weeks to publicly support the proposal put forth in a March 5 Wall Street Journal editorial by Jason Furman, who served as chair of the Council of Economic Advisers under President Obama.

  • "In the two weeks since my op-ed came out the economic situation has deteriorated markedly. It is now clear that a much larger package is needed," Furman tells Axios in an email.
  • Furman's proposal to send $1,000 to every tax-paying American, along with $500 for their dependents, was embraced by economists across the political spectrum in the interim, including George W. Bush's CEA chair Gregory Mankiw and Sen. Mitt Romney (R-Utah), before Trump ultimately backed it.

Why it matters: The size and speed at which a fiscal stimulus package gets passed will have a direct impact on how successful it is in helping lift the economy from what is shaping up to be a deep and painful recession this year.

Between the lines: "President Trump’s team initially rejected the idea but eventually came around to it, which has been critical," Furman says.

  • "But they have still not come around to the more comprehensive approach that I was advocating and is needed."

What's next: There is growing agreement that an unprecedented fiscal package will be necessary to save the economy from ruin, much larger than the proposals currently being considered by the administration.

  • The U.S. Chamber of Commerce has called on Congress to pass a "bridge loan" program to give federally guaranteed loans to companies with big losses from the pandemic — an idea from the New York Times' Andrew Ross Sorkin, who estimates it would cost around $10 trillion.
  • The Chamber's full proposal was inspired by ideas by Sorkin, Kevin Warsh and Senate Small Business Committee chair Marco Rubio (R-Fla.).
  • Furman also tells Axios he likes Sorkin's proposal.

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