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Emergency Stimulus to Soar Above $1 trillion

Treasury Secretary Steven Mnuchin
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By: Nancy Cook & Ben White – politico.com – March 17, 2020

Facing a warning of 20 percent unemployment without action, officials are pushing urgently for a trillion-dollar economic aid package.

It also generated widespread anger that banks and bankers got bailed out while ordinary citizens received far less. The Trump administration is well aware of this history and taking pains to avoid the same optics; top economic officials like Mnuchin and other senior aides around Trump keep emphasizing the need to help small and medium-sized businesses as well.

“Everyone will need assistance and that is the bottom line. This is the demand issue because consumers have stopped spending,” said Alfredo Ortiz, President and CEO of the Job Creators Network, a conservative-leaning group founded by entrepreneurs including The Home Depot founder, Bernie Marcus. “Every industry will need some level of assistance. In the past, Main Street America has not been as represented in some economic stimulus packages.”

Ortiz said he has been in touch directly with Mnuchin, who seems very amenable to including relief for small-to-medium-sized businesses in any package.

The TARP program also drew widespread criticism for creating a moral hazard — banks could feel emboldened to take risks knowing the government would rescue them — while creating fewer and even larger banks that now enjoy a bigger federal backstop. Part of the reluctance among members of Congress and the administration to direct cash payments to individual industries like airlines and hotels stems from the TARP experience and deep voter resentment toward corporations and their highly paid executives getting aid over regular citizens.

Senior White House officials know that direct aid to airlines in particular may be necessary to avoid crippling bankruptcies, but they are leery of being seen as handing out bailouts and want to be sure that any such aid is dwarfed by proposals that would direct cash to consumers. Democrats are already pushing to ensure any bailout includes strings attached.

As top economic officials and Senate leadership negotiate this stimulus package, Trump is spending the day on the phone with executives from the restaurant and tourism industries, supply retailers and wholesalers. Vice President Mike Pence is scheduled to meet with CEOs of major hotels including Hilton, Marriott, Hyatt and MGM Resorts International.

Marianne LeVine, Theo Meyer, Gabby Orr, Nolan D. McCaskill and Michael Grunwald contributed to this report.

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