WASHINGTON (Reuters) - The Trump administration wants to ease the economic drag from the fast-spreading coronavirus with aid to workers and businesses that will pump hundreds of billions of dollars into the U.S. economy, Treasury Secretary Steven Mnuchin told lawmakers on Wednesday.
The White House aims to propose several phases of relief measures to Congress, including a delay of the April 15 tax filing deadline, reimbursements for lost wages to sick and quarantined workers, aid to small and mid-size businesses and support for airlines, hotels and other travel firms, Mnuchin said.
The Democratic-led House of Representatives plans to vote on the first phase of aid on Thursday, a bill that includes expanding unemployment benefits for those who have lost work because of the virus-driven slowdown.
Mnuchin, who is negotiating the measures with House Speaker Nancy Pelosi, told a House Appropriations subcommittee that the virus’ impact was initially underestimated around the world.
“There are a large number of workers that are going to be required to self-quarantine or be at home to take care of family members who are self-quarantined,” he said. “We think it’s appropriate for the government to pick up those costs.”
“This is a little bit like a hurricane,” Mnuchin said, adding the Trump administration was looking at using direct bank deposits or debit cards to give workers money, or reimbursing companies that keep paying employees forced to stay home.
The number of U.S. coronavirus cases has risen steadily and affected almost three-quarters of the 50 states. There have been 1,279 cases in the United States and 37 deaths, according to Johns Hopkins University.
The Treasury Department will recommend that President Donald Trump delay the April 15 income tax filing deadline for individuals and small to midsize businesses, Mnuchin said, saying that could temporarily add $200 billion to the economy.
“We’re not looking to do that for rich people and big corporations, but for virtually all Americans, other than the super rich,” he said.
While the tax filing deadline would aid cash flow for squeezed businesses and workers, Democrats have been less receptive to the administration’s idea to halt payroll tax contributions from both individuals and businesses, arguing that it was too broad and would not be effective.
White House adviser Peter Navarro argued it would provide a “hefty 7.65% raise” for blue-collar and middle-income wage earners that had the potential to “completely offset any of the negative growth effects of COVID-19.”
Payroll taxes are used to fund Social Security for retirees and Medicare, the government healthcare plan for the elderly, which provides 18% of the U.S. population with health insurance.
Travel-related industries are going to be the hardest hit, Mnuchin said, and face a similar situation to the aftermath of the Sept. 11, 2001, attacks, Mnuchin said.
Airlines, hotels and cruise lines are the sectors most affected, Mnuchin said. He said Trump felt strongly that U.S. companies needed to be protected, but not bailed out.
Mnuchin said that economic fallout from the coronavirus would be temporary. The situation will not go on “for years,” he said.
“We will get through this,” Mnuchin said. “I am confident a year from now, the U.S. economy will be in very good shape.”
Reporting by David Lawder and Andrea Shalal; Additional reporting by Jeff Mason; Writing by Heather Timmons; Editing by Tom Brown and Peter Cooney