Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Banking newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (March 17, 2020, 8:31 PM EDT) -- Congressional leaders and the Trump administration outlined their goals Tuesday for a massive economic relief package that could exceed $1 trillion in funds sent directly to individual Americans as well as affected industries and small businesses.
Treasury Secretary Steven Mnuchin pitched Senate Republicans on a plan that would extend loans to industries such as airlines and hotels while helping small businesses keep workers on payrolls. The administration appears to have dropped President Donald Trump's previous push for a payroll tax holiday in favor of sending $1,000 checks directly to consumers to stimulate spending.
"We've put a proposal on the table that would inject $1 trillion into the economy," Mnuchin told reporters. "This is a combination of loans, direct checks to individuals [and] creating liquidity for small businesses. ... You can think of this as business interruption money "
Although political leaders face pressure to avoid a rescue package seen as a bailout for big businesses, as happened after the Troubled Asset Relief Program of 2008, Republicans said affected companies deserve help.
"Major industries that our nation relies on have seen their business virtually dry up overnight — again, not due to any business decision they made, but because of appropriate directives from public health experts," Senate Majority Leader Mitch McConnell, R-Ky., said on the Senate floor.
He outlined a process for the relief package, which would be Congress' third bill responding to the coronavirus after an initial $8.3 billion health funding measure that passed this month and a U.S. House of Representatives-approved plan with expanded sick leave that currently awaits U.S. Senate action.
The majority leader said Senate Republicans will work with the administration to craft a proposal before starting negotiations with Senate Democrats and then entering discussions with House leaders. Though no one has laid out a timeline, the package is likely to take at least a week to craft.
"We're going to move at warp speed in the Senate, which almost never does anything quickly," McConnell said at a news conference. "We're not leaving town until we have constructed and passed another bill."
Sen. John Thune of South Dakota, the chamber's No. 2 Republican, said GOP senators were much more interested in sending checks directly to Americans rather than the payroll tax holiday that Trump had been pushing. Democrats argued the payroll tax holiday would weaken Social Security and were prepared for a fight.
Sen. Marco Rubio, the Florida Republican who chairs the Small Business Committee, told reporters he expects an expansion of Small Business Administration-backed loans to avert broad closures and mass layoffs, with fully guaranteed loans and generous forbearance.
The chairman of the Senate Environment and Public Works Committee suggested including his infrastructure plan in the upcoming relief bill. Sen. John Barrasso, R-Wyo., predicted a quick stimulus effect from his America's Transportation Infrastructure Act, which would provide $287 billion for highway construction, bridge repair and other projects.
Although the gambling industry also has sought relief, lawmakers did not mention casinos in the same breath as airlines and hotels.
Senate Democrats laid out their own priorities.
Minority Leader Chuck Schumer, D-N.Y., bashed the administration's approach as "a massive federal bailout of industry" and said that "the vast majority of the aid should go to the workers" rather than to executive salaries or stock buybacks. He outlined other conditions that Democrats would consider imposing on corporate aid, such as stock awards for employees, worker representation on boards and a $15-an-hour minimum wage.
The minority leader laid out a $750 billion plan that would include affordable health care for coronavirus patients, child care funding, expanded and extended unemployment insurance, a boost in federal Medicaid spending and federal assumption of student loan payments. It would also include a six-month period of forbearance on all federally backed loans, including mortgages, with a national moratorium on all evictions and foreclosures.
House Speaker Nancy Pelosi, D-Calif., echoed those sentiments. The aid package "must put families first before any aid to corporate America is considered," she said in a statement. However, a spokesman said Pelosi spoke with airline CEOs on Tuesday afternoon.
The speaker said her priorities include allowing more uses for family and medical leave, expanding refundable tax credits for self-employed and gig workers, and paid leave for health care workers and first responders.
--Editing by Orlando Lorenzo.
For a reprint of this article, please contact reprints@law360.com.
