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Westlake Legal Group > Posts tagged "Furman, Jason"

Democrats and the White House Race to Strike Deal for Coronavirus Relief Package

Westlake Legal Group merlin_170361786_6c511dcb-5518-46cf-b28a-d7f3efc0104f-facebookJumbo Democrats and the White House Race to Strike Deal for Coronavirus Relief Package United States Politics and Government United States Economy Trump, Donald J Pelosi, Nancy Payroll Tax Paid Time Off Mnuchin, Steven T Furman, Jason Coronavirus (2019-nCoV)

WASHINGTON — The White House and Democrats rushed on Wednesday to reach agreement on emergency legislation to provide a first tranche of economic assistance to help Americans cope with the fast-moving coronavirus pandemic, with the hope of sending it to President Trump for his signature by the end of the week.

With the White House and Democrats divided over what a broader economic stimulus package should look like, the two parties appeared to be coalescing around the idea of a narrower short-term bill focusing on paid leave, enhanced unemployment insurance, food assistance and help for small businesses. That would defer what is likely to be a much more contentious discussion over other economic measures, such as tax cuts and rescue plans for affected industries, until after Congress returns from a weeklong recess.

Treasury Secretary Steven T. Mnuchin, testifying on Capitol Hill, said he had been in “round- the-clock” discussions with Speaker Nancy Pelosi, Democrat of California, and Senator Mitch McConnell, Republican of Kentucky and the majority leader, and hoped to reach agreement within 48 hours on a relief package.

“This is a little bit like a hurricane, and we need to cover these outside of normal expenses,” Mr. Mnuchin said.

In the Capitol, both Democrats and Republicans clearly felt a sense of urgency as lawmakers currently plan to leave Washington on Thursday. Representative Steny H. Hoyer of Maryland, the No. 2 Democrat, said the House would vote Thursday on its plan, which includes enhanced unemployment insurance, paid sick leave and food assistance, according to a summary circulated by leaders on Wednesday.

Should the White House agree to the package, Mr. McConnell would likely bring it up for an immediate vote on the Senate floor, according to people familiar with his thinking who were not authorized to comment, clearing a path for Mr. Trump to quickly sign the legislation into law.

As bipartisan talks continued behind the scenes, Senate Democrats released their own plan on Wednesday morning.

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Senator Chuck Schumer of New York, the Democratic leader, told reporters that Congress must focus first on the needs of those most affected by the virus, and think about an economic stimulus package later. Likewise, Mr. Mnuchin said he expected to return to Congress later to ask for a larger economic stimulus package composed of items that will take longer to draw the necessary support — including President Trump’s proposal to temporarily suspend payroll taxes, which has drawn bipartisan opposition.

“The payroll tax would be great,” Mr. Trump told reporters on Wednesday at the White House. “Dems are not in favor of it. I’m trying to figure out why.”

The Trump administration is also considering providing loan guarantees for the cruise, airline and hotel industries affected by the virus, similar to those that were offered after the terrorist attacks of Sept. 11, 2001.

“We are not looking for bailouts,” Mr. Mnuchin said. “Loan guarantees are a very effective way of making sure the government gets paid back without putting the government at risk.”

The Trump administration is also weighing its options for unilateral action. Mr. Mnuchin said on Wednesday that he would recommend to the president that the Internal Revenue Service allow a delay of tax payments beyond the April 15 deadline, without penalty or interest, that would apply to “virtually all Americans other than the superrich.”

All individuals are allowed to request tax payment extensions online, but the treasury secretary said his proposal was for a special provision to help small and medium-size businesses and “hardworking individuals.” It would not apply to large corporations or the wealthiest Americans, Mr. Mnuchin said, but he did not elaborate on what the threshold would be.

“That will have the impact of putting over $200 billion back into the economy, and that will create a very big stimulus,” Mr. Mnuchin said, adding that Treasury was already working on funding the initiative.

In moving hastily to unveil their own plans, Democrats hoped to set the terms of the debate and get ahead of the Trump administration, which is divided internally over what to do. Ms. Pelosi has scheduled a 4 p.m. meeting with her caucus to discuss her proposal. On Wednesday morning, top House Democrats were briefed by Jason Furman, an economist who advised former President Barack Obama, on how to proceed.

Congress already approved an emergency $8.3 billion emergency aid package — more than three times what Mr. Trump requested — to send additional funding to the federal health agencies responding to the novel coronavirus. The president signed that measure last week.

After weeks of playing down potential effects of the virus, Mr. Trump is now calling for drastic economic measures, including the temporary elimination of payroll taxes, a proposal whose cost would rival both the Wall Street bailout of 2008 and the economic stimulus measure that followed.

Mr. Mnuchin has been privately skeptical about calling for a payroll tax cut or holiday, but he told lawmakers on Wednesday that such a move would provide broader stimulus for the economy, which is likely to face a slowdown from all the disruption.

Democrats want a more targeted approach. Senate Democrats on Wednesday released an initial response plan, featuring paid sick leave but also several new proposals.

Those plans include a six-month break for borrowers on paying federal student loans and mortgages; block grants to help communities where the virus has shut down the economy; direct grants to small businesses; assistance to help public transit systems stay in operation; rental and mortgage payment assistance for some borrowers; and grants to child care centers and schools that are infected with the virus.

“We are just appalled at the administration,” Mr. Schumer said, adding that Mr. Trump and his advisers have “not come up with a plan to help people who need help.”

“We don’t think they should just throw money out of an airplane and hope that some of it lands on the people” who need assistance, Mr. Schumer added, referring to the payroll tax idea. In the House, Mr. Hoyer called it “a nonstarter.”

The House Democrats’ plan was expected to include proposals for government-paid sick leave and increased spending on safety-net programs like food stamps and unemployment insurance, according to talking points circulated by Ms. Pelosi on Wednesday morning.

The legislation, according to the document, will also include widespread and free coronavirus testing and new standards for protective equipment for health care workers, janitorial staff and others on the front lines of the virus. It would provide government reimbursement for all health costs Americans incur that are not covered by their insurance plans as well as efforts to increase the capacity of the health care system to take in coronavirus patients.

Democrats also plan to include new rules against price gouging for “medical and nonmedical essentials” during the outbreak, the talking points said.

Emily Cochrane contributed reporting.

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Amid Recession Worries, Trump Points Finger at American Businesses

WASHINGTON — President Trump wants Americans to understand that the economy is doing great, thanks to him. But if in fact the economy sours, then it is someone else’s fault.

Mr. Trump’s Blame List is long. On top, of course, is Jerome H. Powell, the chair of the Federal Reserve — never mind that Mr. Trump was the one who appointed him. Then there are the Democrats, and not to mention the news media.

And on Friday, the president added American businesses to the list, arguing that struggling companies have only themselves to blame and are rationalizing their own mistakes by pointing to, just to name an example, Mr. Trump’s multibillion-dollar tariffs and America’s biggest trade war in generations.

“Badly run and weak companies are smartly blaming these small Tariffs instead of themselves for bad management…and who can really blame them for doing that?” Mr. Trump wrote on Twitter. “Excuses!”

He repeated his point later with reporters. “A lot of badly run companies are trying to blame tariffs,” he said. “In other words, they’re running badly and they’re having a bad quarter or they’re just unlucky in some way. They’re trying to blame the tariffs. It’s not the tariffs. It’s called bad management.”

The president’s search for economic villains comes amid signs of a slowdown, exacerbated by uncertainty from his showdown with China over the future of the relationship between the two largest economies in the world.

Consumer confidence, which increased significantly on Mr. Trump’s watch, fell by 8.6 percent in August, its largest monthly decline since 2012 when the government was on the edge of a so-called fiscal cliff. The University of Michigan, which measures confidence, attributed it to the trade war, reporting that one in three consumers cited Mr. Trump’s tariffs without being prompted.

The concern appears to be bleeding into the presidential race. For the first time since Mr. Trump was elected, more voters responding to a Quinnipiac University poll said the national economy is getting worse than better. Altogether, 37 percent saw the economy heading downward compared with 31 percent who thought it was improving and 30 percent who said it was the same.

To Mr. Trump’s benefit, most voters in the poll still rated the economy good or excellent, but the number of those detecting dark clouds was up by 14 percentage points since June.

The economy is crucial to any president seeking a second term, but few have wrapped themselves in the issue as tightly as Mr. Trump. Polls have shown that the economy has been his strongest asset going into next year’s election.

He has a politically compelling story to tell, with unemployment at nearly a 50-year low at 3.7 percent, average wages now rising and the Dow Jones stock index about 32 percent higher than when he took office. But overall growth has been much slower than he predicted, deficit spending is increasing and various signs point to trouble ahead.

“The historical lesson is whatever happens, the sitting president gets credit or blame,” said Douglas Holtz-Eakin, the president of the American Action Forum, a center-right economic group, and an adviser to Senator John McCain’s 2008 presidential campaign. “That’s always been true regardless of the merits. He is clearly trying to make sure he has some fingers to point.”

The president has increasingly expressed anxiety to advisers that a downturn would harm his re-election chances. He has lashed out repeatedly at Mr. Powell for not lowering interest rates further and faster, even calling him an “enemy,” and he has complained that his opponents and journalists are cheerleading for a recession to take him down.

ImageWestlake Legal Group merlin_159896784_26b40d25-1ebe-49f3-89c8-835698959de9-articleLarge Amid Recession Worries, Trump Points Finger at American Businesses White House Council of Economic Advisers United States Politics and Government United States Economy United States Chamber of Commerce Trump, Donald J Powell, Jerome H International Trade and World Market Holtz-Eakin, Douglas Furman, Jason Economic Conditions and Trends China

“We don’t have a Tariff problem (we are reigning in bad and/or unfair players), we have a Fed problem,” President Trump tweeted on Friday. “They don’t have a clue!”CreditDoug Mills/The New York Times

“We don’t have a Tariff problem (we are reigning in bad and/or unfair players), we have a Fed problem,” he wrote on Friday. “They don’t have a clue!”

But his attack on American businesses takes the blame game to a new level, faulting the very sector that he has sought to court with his moves to lower corporate taxes and lift the burden of regulations.

“Blaming businesses for the economic situation is silly since they respond to incentives and uncertainty,” said Jason Furman, who was chairman of the President’s Council of Economic Advisers under Barack Obama. “The job of a policymaker is to help create an environment for businesses to fuel economic growth, not to preemptively blame them for the potential lack of growth.”

Thomas J. Collamore, a former executive vice president of the United States Chamber of Commerce, said he would advise Mr. Trump “to charge his very able trade negotiators” to strike the best deal possible with China, which would allow businesses to expand and stimulate the economy.

“The uncertainty created by additional tariffs or threats of more is causing business to pause and sit on their hands, which could unwittingly lead to an economic version of Hurricane Dorian,” Mr. Collamore said.

The president’s outburst at businesses came a day after Americans for Free Trade, a coalition of industry groups, released a letter signed by more than 160 business associations asking him to postpone further tariff increases.

“Tariffs are taxes that cost American jobs and hurt consumers, creating a problem for the entire U.S. economy,” the group said in response to the president on Friday. “The fact that companies find extra taxes as high as 30 percent challenging is not an excuse, it’s an economic reality.”

A number of large American companies have struggled with life under Mr. Trump’s trade war and in recent days several have reported or projected slowing sales and profits that they attributed to the tariffs.

Deere & Co., which manufactures agricultural equipment, said last week that it was cutting its profit forecast for the second time this year, attributing it to farmers delaying purchases for fear that they will not have as much access to foreign markets.

Best Buy lowered its revenue forecast for the year on Thursday, with its chief executive noting that major products like televisions and smartwatches will be subject to new 15 percent tariffs ordered by Mr. Trump. Clothing retailers like J. Jill and Chico’s have also said they expect lower sales in the third quarter as the next round of tariffs go into effect on Sunday.

“He’s got a substantive problem,” Mr. Holtz-Eakin said of Mr. Trump. “He’s proud of his fulfilling campaign promises — that is a centerpiece of his re-elect and what he’s got with China is higher tariff walls on both sides, damage to both economies and the global economy and nothing to show for it.”

By hammering away at Mr. Powell, his opponents and now American businesses, aides say Mr. Trump wants Americans to know the impediments hindering the economy even as he continues to make the case that the country is still in good shape.

“The economy is doing great,” he said on Friday. “The economy is amazing actually.”

After wild fluctuations in recent days, the markets took his latest comments relatively calmly. The S&P and Nasdaq indexes were essentially flat on Friday, and the Dow Jones closed for the day up by about 1.5 percent.

But as tariffs continue to rise and the election year approaches, Mr. Trump will soon be left to make a calculation about how far he can go in staring down China before it puts his political future in jeopardy, no matter who else he plans to blame. The Chinese know that and they do not have an election to worry about.

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