Mar 18, 2020 - Politics & Policy

White House proposes $1 trillion coronavirus stimulus package

Photo: Brendan Smialowski/AFP via Getty Images

The White House is asking Congress for a $1 trillion coronavirus relief and economic stimulus plan that would include industry-specific bailouts and payments to individual taxpayers.

The big picture: This is more than the $900 billion that the U.S. government initially committed to bailouts in the 2008 financial crisis.

The proposal, penned by the Treasury Department, includes:

  • Payouts to individual Americans: $500 billion.
    • This would be done via two separate checks of equal amounts, one on April 6 and one on May 18.
    • The specific dollar amounts would be means-tested, meaning it would be based on income level and family size.
    • Each round of payments would be identical in amount, per the Treasury.
  • Airline industry bailout: $50 billion.
    • This would take the form of secured loans to passenger and cargo air carriers, with the Treasury to set interest rates and other terms.
    • Limits would be placed on executive pay increases until the loans were repaid.
  • Other affected industries bailout: $150 billion.
    • Secured loans or loan guarantees would be extended to "other critical sectors of the U.S. economy experiencing severe financial distress due to the COVID-19 outbreak."
    • Among the sectors raising their hands for bailouts, largely or wholly for the purpose of paying workers: Hotels ($150 billion requested), casinos, cruise line operators and shopping mall operators.
  • Small business interruption loans: $300 billion.
    • Employers with 500 employees or fewer would be eligible, and would have to keep paying all their workers for eight weeks from the date of the loan.
    • The government would guarantee 100% of six weeks of payroll, capped at $1,540 per week per employee, with the Treasury to set interest rates and other terms.

Historical comparison: The amount budgeted in 2008 for TARP — the Troubled Asset Relief Program — was $700 billion. The money was aimed at bailing out big banks and auto companies. The same year, the government designated $200 billion to rescue Fannie Mae and Freddie Mac, the giant mortgage enterprises.

  • In actuality, far less than the total $900 billion was spent.
  • By the time the programs were declared ended in 2014, the government had actually turned a profit on those bailouts.
  • According to ProPublica's Bailout Tracker, a total of $634 billion was spent on TARP and the Fannie and Freddie bailouts: "Money has been coming back in two ways: $390B of principal has been repaid, and the Treasury has collected revenue from its investments of $364B. ... In total, the government has realized a $121B profit as of January 31, 2020."

The bottom line: While there were big moral and ethical implications to the rescue of the banking and auto industries — which were seen as having largely caused their own problems — many of the companies that are currently foundering are blameless for their predicament.

  • This will make it easier for the public to support sweeping federal appropriations.
  • Public support will be public important if the coronavirus emergency drags on and forces even more federal expenditures and guarantees.

Read the proposal.

Go deeper

Clyburn says House coronavirus committee won't investigate Trump

House Majority Whip Jim Clyburn (D-S.C.) said on CNN's "State of the Union" Sunday that the coronavirus committee created by Nancy Pelosi (D-Calif.) will oversee how the $2 trillion stimulus bill is distributed during the pandemic, not the federal government's initial response to the virus.

What he's saying: "This is not about the president of the United States or even the independent counsel or the inspector general. This is about focusing on how the money is spent, whether or not the people who are getting the money are actually working on behalf of the American people, or whether or not they are profiteering."

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

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 1 a.m. ET: 1,274,956 — Total deaths: 69,487 — Total recoveries: 260,484Map.
  2. U.S.: Total confirmed cases as of 1 a.m. ET: 337,635 — Total deaths: 9,647 — Total recoveries: 17,530Map.
  3. Federal government latest: Surgeon general says this week will be "our Pearl Harbor, our 9/11 moment." The USDA confirms that a Bronx zoo tiger tested positive for coronavirus.
  4. 2020 latest: "We have no contingency plan," Trump said on the 2020 Republican National Convention. Biden says DNC may have to hold virtual convention.
  5. States updates: New York Gov. Andrew Cuomo said the state is "literally going day-to-day" with supplies.
  6. World update: Queen Elizabeth II urges the British people to confront pandemic with "self-discipline" and "resolve" in rare televised address.
  7. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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