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Westlake Legal Group > Posts tagged "Trump, Donald J" (Page 49)

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.

Get an informed guide to the global outbreak with our daily coronavirus newsletter.

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.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Dow Ends 11-Year Bull Market as Coronavirus Defies Economic Remedies

Westlake Legal Group 11markets-ledeall-facebookJumbo Dow Ends 11-Year Bull Market as Coronavirus Defies Economic Remedies World Health Organization United States Economy Trump, Donald J Stocks and Bonds Recession and Depression Polls and Public Opinion Layoffs and Job Reductions Coronavirus (2019-nCoV) Consumer Behavior

A renewed plunge in financial markets on Wednesday ended an 11-year bull market for the Dow Jones industrial average as the economic threat posed by the coronavirus outbreak came into stark relief.

As policymakers on both sides of the Atlantic appeared unwilling or unable to mount an aggressive response to the crisis, the Dow closed with a loss of nearly 6 percent. That brought its decline from its most recent peak less than a month ago to more than 20 percent — the definition of a bear market.

The broader S&P 500 was down nearly 5 percent for the day, but shy of bear territory.

The full economic toll of the outbreak — now officially a pandemic — will not be clear for months. But there is mounting evidence that it will be severe. Airlines are warning of empty planes and huge financial losses. A sharp drop in oil prices is threatening to put energy companies out of business and thousands of American drillers out of work. Supply-chain bottlenecks are forcing factories around the world to cut output, even as a slump in consumer confidence is raising doubts that there will be demand for their goods once production resumes.

Policymakers are struggling to respond effectively. A rate cut by the Federal Reserve last week failed to calm financial markets. A similar move by the Bank of England on Wednesday was equally ineffectual. Governments in Europe were struggling to manage their budgets even before the virus struck, limiting their ability to spend heavily to keep their economies afloat. And in the United States, which faces no such constraints, President Trump has resisted aggressive stimulus measures that many economists say are necessary to contain the damage.

“If the Trump administration and Congress can’t get it together quickly and put together a sizable and responsible package, then a recession seems like a real possibility here,” said Mark Zandi, chief economist for Moody’s Analytics. He said he saw a roughly 50 percent chance of a recession in the next year.

As recently as a week ago, few economists thought a recession was likely. Most thought that whatever damage the virus caused would be short-lived, and that the economy would experience a sharp, “V-shaped” recovery. Forecasts have become significantly more dour since then, however, as the virus has spread more widely in the United States and as the effects in Europe have become more pronounced.

Italy has essentially been put on lockdown, and Chancellor Angela Merkel of Germany said Wednesday that as much as 70 percent of her country’s population was likely to become infected. The World Health Organization officially declared the outbreak a pandemic, acknowledging its worldwide scope.

Get an informed guide to the global outbreak with our daily coronavirus newsletter.

“Even if the virus situation improves, we’re looking at people just being very cautious about going back,” said Nariman Behravesh, chief economist for IHS Markit. “It’s going to take a while for people to feel comfortable to go back into large crowds, to get back on an airplane.”

Indeed, no amount of fiscal stimulus or interest-rate cuts will restore canceled flights or postponed events — nor, at a time when health officials are recommending “social distancing,” would policymakers want to. The only thing that could truly prevent economic damage or settle financial markets lies beyond the power of economic policymakers: getting the virus itself in check.

“I don’t think it’s something that conventional fiscal and monetary policy can solve,” said Lewis Alexander, chief U.S. economist at Nomura Securities in New York. “It’s not like if you just write a big enough check everything will be fine.”

But economists said there was still a window of opportunity to limit the damage and avoid the cascading ripple effects that could cause a recession. Targeted aid for affected industries could help prevent layoffs. Cash payments could allow people to keep spending even if their hours are cut or they miss work because of a quarantine.

That window could be closing. Consumer confidence in March suffered its largest single-month drop of Mr. Trump’s tenure in office, according to a new nationwide poll conducted for The New York Times by the online research firm SurveyMonkey. The decline was some of the first evidence that the outbreak — and the financial market turmoil it has caused — is threatening consumer spending, the linchpin of the decade-long economic expansion.

The decline in March could be a preview of larger confidence losses to come. The poll was conducted last week and completed on Sunday, before stock markets dropped 8 percent on Monday in a single day of virus-driven losses.

Adding to the challenge, the people most at risk of losing their jobs or hours are mostly service workers: hotel housekeepers, airport vendors, waiters and waitresses. Those workers are less likely than white-collar workers to have paid sick leave, and they are less likely to have the financial resources to weather a period of reduced income. That could worsen the impact on consumer spending, said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch.

“That’s the part of the economy that is presumably most budget constrained, so they don’t necessarily have savings to draw down or lines of credit they can use,” she said. “An income shock in that population becomes a consumption shock more quickly and potentially more deeply.”

Efforts to fight the outbreak are likely to make the economic situation worse, at least in the short run.

The experience in other countries offers lessons for the United States. China appears to have been able to get its outbreak under control, but only through shutting down vast regions of the country. South Korea has won plaudits for its decisive response, but that too required huge disruptions to daily life and commerce. In Italy, the outbreak spiraled out of control until the country was forced to impose broad restrictions on movement.

“The virus is beatable, but the measures that are required to beat it are economy killers,” said Ian Shepherdson, chief economist for Pantheon Macroeconomics, a research firm.

The only way to kick-start the economy after such a vast disruption, Mr. Shepherdson said, was through a “blockbuster fiscal response.”

There is little evidence so far that such a response is coming. Mr. Trump is weighing a temporary elimination of the payroll tax, a measure with a big dollar figure — it could cost nearly $700 billion — but that would put only a trickle of extra cash into workers’ bank accounts. For people who lose their jobs as a result of the outbreak, a payroll tax cut wouldn’t help at all.

Democrats are preparing their own plan featuring paid sick leave for affected workers as well as breaks on federal student loans and mortgages, block grants to help communities, and assistance to help public transit systems stay in operation. Negotiations between the parties have hardly begun.

The United States, unlike Europe, was on fairly firm economic footing before the virus hit. Unemployment was near a five-decade low, consumer spending and the housing market were strong, and overall growth was slowing but still solid. That should give the economy some cushion against the virus.

But cracks were showing even before the crisis. The trade war hurt manufacturers and farmers, leaving the economy even more dependent on consumer spending. The Federal Reserve last year cut interest rates three times to try to keep the expansion on track.

“The economy was already on its back heels coming into this year,” Mr. Zandi said. “All it was going to take was a shove to put the economy on its back, and it just got a body blow.”

Matt Phillips and Jim Tankersley contributed reporting.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Dow Ends 11-Year Bull Market as Coronavirus Defies Economic Remedies

Westlake Legal Group 11markets-ledeall-facebookJumbo Dow Ends 11-Year Bull Market as Coronavirus Defies Economic Remedies World Health Organization United States Economy Trump, Donald J Stocks and Bonds Recession and Depression Polls and Public Opinion Layoffs and Job Reductions Coronavirus (2019-nCoV) Consumer Behavior

A renewed plunge in financial markets on Wednesday ended an 11-year bull market for the Dow Jones industrial average as the economic threat posed by the coronavirus outbreak came into stark relief.

As policymakers on both sides of the Atlantic appeared unwilling or unable to mount an aggressive response to the crisis, the Dow closed with a loss of nearly 6 percent. That brought its decline from its most recent peak less than a month ago to more than 20 percent — the definition of a bear market.

The broader S&P 500 was down nearly 5 percent for the day, but shy of bear territory.

The full economic toll of the outbreak — now officially a pandemic — will not be clear for months. But there is mounting evidence that it will be severe. Airlines are warning of empty planes and huge financial losses. A sharp drop in oil prices is threatening to put energy companies out of business and thousands of American drillers out of work. Supply-chain bottlenecks are forcing factories around the world to cut output, even as a slump in consumer confidence is raising doubts that there will be demand for their goods once production resumes.

Policymakers are struggling to respond effectively. A rate cut by the Federal Reserve last week failed to calm financial markets. A similar move by the Bank of England on Wednesday was equally ineffectual. Governments in Europe were struggling to manage their budgets even before the virus struck, limiting their ability to spend heavily to keep their economies afloat. And in the United States, which faces no such constraints, President Trump has resisted aggressive stimulus measures that many economists say are necessary to contain the damage.

“If the Trump administration and Congress can’t get it together quickly and put together a sizable and responsible package, then a recession seems like a real possibility here,” said Mark Zandi, chief economist for Moody’s Analytics. He said he saw a roughly 50 percent chance of a recession in the next year.

As recently as a week ago, few economists thought a recession was likely. Most thought that whatever damage the virus caused would be short-lived, and that the economy would experience a sharp, “V-shaped” recovery. Forecasts have become significantly more dour since then, however, as the virus has spread more widely in the United States and as the effects in Europe have become more pronounced.

Italy has essentially been put on lockdown, and Chancellor Angela Merkel of Germany said Wednesday that as much as 70 percent of her country’s population was likely to become infected. The World Health Organization officially declared the outbreak a pandemic, acknowledging its worldwide scope.

Get an informed guide to the global outbreak with our daily coronavirus newsletter.

“Even if the virus situation improves, we’re looking at people just being very cautious about going back,” said Nariman Behravesh, chief economist for IHS Markit. “It’s going to take a while for people to feel comfortable to go back into large crowds, to get back on an airplane.”

Indeed, no amount of fiscal stimulus or interest-rate cuts will restore canceled flights or postponed events — nor, at a time when health officials are recommending “social distancing,” would policymakers want to. The only thing that could truly prevent economic damage or settle financial markets lies beyond the power of economic policymakers: getting the virus itself in check.

“I don’t think it’s something that conventional fiscal and monetary policy can solve,” said Lewis Alexander, chief U.S. economist at Nomura Securities in New York. “It’s not like if you just write a big enough check everything will be fine.”

But economists said there was still a window of opportunity to limit the damage and avoid the cascading ripple effects that could cause a recession. Targeted aid for affected industries could help prevent layoffs. Cash payments could allow people to keep spending even if their hours are cut or they miss work because of a quarantine.

That window could be closing. Consumer confidence in March suffered its largest single-month drop of Mr. Trump’s tenure in office, according to a new nationwide poll conducted for The New York Times by the online research firm SurveyMonkey. The decline was some of the first evidence that the outbreak — and the financial market turmoil it has caused — is threatening consumer spending, the linchpin of the decade-long economic expansion.

The decline in March could be a preview of larger confidence losses to come. The poll was conducted last week and completed on Sunday, before stock markets dropped 8 percent on Monday in a single day of virus-driven losses.

Adding to the challenge, the people most at risk of losing their jobs or hours are mostly service workers: hotel housekeepers, airport vendors, waiters and waitresses. Those workers are less likely than white-collar workers to have paid sick leave, and they are less likely to have the financial resources to weather a period of reduced income. That could worsen the impact on consumer spending, said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch.

“That’s the part of the economy that is presumably most budget constrained, so they don’t necessarily have savings to draw down or lines of credit they can use,” she said. “An income shock in that population becomes a consumption shock more quickly and potentially more deeply.”

Efforts to fight the outbreak are likely to make the economic situation worse, at least in the short run.

The experience in other countries offers lessons for the United States. China appears to have been able to get its outbreak under control, but only through shutting down vast regions of the country. South Korea has won plaudits for its decisive response, but that too required huge disruptions to daily life and commerce. In Italy, the outbreak spiraled out of control until the country was forced to impose broad restrictions on movement.

“The virus is beatable, but the measures that are required to beat it are economy killers,” said Ian Shepherdson, chief economist for Pantheon Macroeconomics, a research firm.

The only way to kick-start the economy after such a vast disruption, Mr. Shepherdson said, was through a “blockbuster fiscal response.”

There is little evidence so far that such a response is coming. Mr. Trump is weighing a temporary elimination of the payroll tax, a measure with a big dollar figure — it could cost nearly $700 billion — but that would put only a trickle of extra cash into workers’ bank accounts. For people who lose their jobs as a result of the outbreak, a payroll tax cut wouldn’t help at all.

Democrats are preparing their own plan featuring paid sick leave for affected workers as well as breaks on federal student loans and mortgages, block grants to help communities, and assistance to help public transit systems stay in operation. Negotiations between the parties have hardly begun.

The United States, unlike Europe, was on fairly firm economic footing before the virus hit. Unemployment was near a five-decade low, consumer spending and the housing market were strong, and overall growth was slowing but still solid. That should give the economy some cushion against the virus.

But cracks were showing even before the crisis. The trade war hurt manufacturers and farmers, leaving the economy even more dependent on consumer spending. The Federal Reserve last year cut interest rates three times to try to keep the expansion on track.

“The economy was already on its back heels coming into this year,” Mr. Zandi said. “All it was going to take was a shove to put the economy on its back, and it just got a body blow.”

Matt Phillips and Jim Tankersley contributed reporting.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Let’s Talk About Bailouts, Before We Need Them This Time

Westlake Legal Group 11sorkin3-facebookJumbo Let’s Talk About Bailouts, Before We Need Them This Time United States Politics and Government United States Economy Trump, Donald J Rattner, Steven L Presidential Election of 2020 Paulson, Henry M Jr Coronavirus (2019-nCoV) Banking and Financial Institutions

Bailouts. Stimulus. Corporate socialism. Welfare for business.

We’ll be hearing a lot about the idea of plowing taxpayer money into the economy as the damage — human and economic — from the coronavirus outbreak leads to a conversation about government bailouts.

We’ve been here before, in fall 2008, when the U.S. government bailed out the banks and later the automakers. It, too, was a presidential election year. That was a man-made catastrophe. This one is more like a natural disaster, with man-made mistakes along the way.

The argument for bailouts back then was that letting the banks and autos fail would be so devastating for the economy — and politically unpalatable — that lawmakers had no choice but to save them.

But, if you remember, the recriminations came as quickly as the money: Were the terms too generous? Should taxpayers have received more for the risk they took? Should the money have come with significant strings attached that would change the structure of the companies and industries? Or, rather, should the money have gone directly to workers and other people hurt by the failure of the companies? Invariably, the conversation turned political, with calls that such bailouts were the equivalent of welfare for companies or corporate socialism.

Instead of having that conversation after the fact this time, let’s have it now, before any bailouts become a reality.

If, for example, the U.S. government were to lend money to the airlines, what should it get in return? Should shareholders like Warren E. Buffett — who owns stakes in Delta Air Lines, American Airlines, United Airlines and Southwest Airlines — be wiped out? Should the government use this moment to change policy in the industry by, for example, taking “slots” at busy airports away from the biggest airlines and giving them to upstarts to try to make the industry more competitive since so many airlines merged? Could the government force the airlines to become more customer friendly, with more transparent pricing and policies?

That may just be the beginning. With oil price falling, should the government help shale producers, as President Trump is reportedly considering? What about the cruise line industry? And on it goes.

We’re probably getting ahead of ourselves. But the conversations have already begun. Mr. Trump floated the idea of a payroll tax cut and help for hourly wage earners affected by measures to control the coronavirus outbreak. He made his case for the tax cut on Capitol Hill on Tuesday, and he is planning to meet with Wall Street bankers on Wednesday to press them to provide loans to small businesses.

Whatever the case, the biggest question is whether there would be enough bipartisan political will to spend billions of dollars.

Henry M. Paulson Jr., the Treasury secretary under President George W. Bush, told me that he thought the current challenges were similar but also very different from what he faced in 2008.

“I suspect that before it is over, there will once again be an urgent need in an election year for bipartisan support in Congress to work with the administration if we are to mitigate the economic burden on Americans,” said Mr. Paulson, who oversaw the federal response to the financial crisis in 2008 with Ben S. Bernanke, the Federal Reserve chair, and Timothy F. Geithner, president of the Federal Reserve of New York and later the Treasury secretary under President Barack Obama.

Mr. Paulson added: “In some ways, this is more complex because it also involves important health issues. This will once again test our political system, but I believe our leaders will rise to the challenge as our nation has always done in a crisis.”

If Mr. Paulson learned anything from the financial crisis, acting fast matters. But even in the panic of the 2008 crisis, Congress was so polarized that it did not pass stimulus measures until it was almost too late. (Congress voted against the proposal before voting in favor of it days later.)

The current Federal Reserve chair, Jerome H. Powell, has already lowered interest rates and says he stands ready to do so again, following a similar strategy to that of Mr. Bernanke, who flooded the economy with money. Only this time, lowering interest rates can go only so far: It will not get people traveling or dining out any sooner, but it could allow businesses to pay lower interest rates and help keep them solvent longer in hopes they can ride out the economic damage from the spread of the virus.

Mr. Powell has met with the president and Steven Mnuchin, the Treasury secretary, in recent days. Mr. Mnuchin mentioned the meetings on Monday as a demonstration of coordination. But unlike the tight relationship between Mr. Paulson and Mr. Bernanke, the relationship between the Federal Reserve and the Trump administration is seemingly strained. Mr. Trump has publicly attacked Mr. Powell, saying of his hiring Mr. Powell that he was “not even a little bit happy with my selection of Jay.”

Steven L. Rattner, who acted as the “car czar” in the Obama administration and oversaw the bailouts of Detroit’s automakers, said he believed there was still money available in the private markets to help. “I don’t think we are at that ‘break-the-glass’ moment.”

“Remember part of why the government bailouts existed was because private markets had failed. There was no private market,” Mr. Rattner said in an interview. “Today, we’re not yet in that position.”

He added, “If the airlines run out of cash, there is certainly debtor-in-possession financing,” suggesting that even if an airline filed for bankruptcy protection, there would be enough investors waiting on the sidelines to provide money to keep it going while it reorganized.

Still, it would not be surprising if the airlines — or other industries — went to Washington, hat in hand. After all, just Tuesday, Delta and American said they would slash flights because of lack of demand, and Southwest’s chief executive, Gary Kelly, said he would take a 10 percent pay cut.

When Mr. Trump was asked during a meeting between airline chief executives and Vice President Mike Pence how he would respond to a bailout request from the airline industry, he replied: “Don’t ask that question, please, because they haven’t asked that. So I don’t want you to give them any ideas.”

After the Sept. 11, 2001, terrorist attacks, the U.S. government provided $15 billion to the airline industry, partly to offset losses as well as to help pay for additional safety requirements the nation adopted. In that case, the taxpayers did not seek anything in return.

Mr. Rattner said he thought it would be a mistake to use bailouts as “policy tools.” He said in the same way they thought about the auto bailouts, “we shouldn’t try to achieve every objective that might be imagined.” In other words, the government did not use that bailout to mandate new emissions standards, for example, or new safety standards. He said the goal was always simply to “get these companies back on their feet in a commercial way.”

Over the next several days and weeks, with Mr. Trump’s constant focus on the level of the stock market as a signal of his own progress, he is likely to seek large stimulus measures focused on businesses. Some of them may well be needed.

But if the 2008 crisis is any indicator, bailouts are a political morass with lasting effects. In this political environment, it is hard to believe there will not be a bitter fight.

Policymakers should get ahead of that battle and have the debate now — out in the open — about what a fair and right stimulus plan looks like rather than wait until time runs out.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Joe Biden Is Poised to Deliver the Biggest Surprise of 2020: A Short, Orderly Primary

Westlake Legal Group 10campaign-assess1-facebookJumbo Joe Biden Is Poised to Deliver the Biggest Surprise of 2020: A Short, Orderly Primary Voting and Voters Trump, Donald J Sanders, Bernard Presidential Election of 2020 Missouri Mississippi Michigan Biden, Joseph R Jr

The state of our union is unsettled, chaotic, impossible to pin down. The state of the Democratic primary, improbably, is not.

With a string of commanding victories on Tuesday — Michigan, Missouri, Mississippi, probably any other “M” state that might have bothered with a primary this week — Joe Biden appears poised to complete one of the most striking turnarounds in recent campaign memory, finding himself in a dominant position only 10 days after the first state victory of his three presidential runs. His remarkable reversal has banished Senator Bernie Sanders to a familiar electoral perch: an insurgent progressive long shot straining to catch an establishment favorite.

The former vice president has won in the South, in the Northeast, in the Midwest. He has won large states and small ones. He has won in places where his strength with African-Americans could carry him and in others where such residents are fewer and far between.

So thorough is Mr. Biden’s hold on the party now that any collapse would probably require a political U-turn as sharp as the one that precipitated his rise. And as 2020 lurches into a logistically uncertain phase, with rallies canceled over coronavirus fears and voters more likely to privilege steady leadership, Mr. Biden is consistently and significantly outpacing Mr. Sanders on the crucial measure of whom to trust in a crisis, according to exit polls.

Next week’s contests include states where Mr. Biden is expected to perform well again. In Florida, the largest prize on the map until late April, his appeal to older voters and moderates, coupled with Mr. Sanders’s struggles with Cuban-Americans, has Mr. Biden primed for the kind of delegate haul that can only come with a true blowout. A week later, on March 24, the race moves to Georgia, where a large black population is expected to help deliver Mr. Biden another rout.

Unlike 2016, when Mr. Sanders extended his race against Hillary Clinton with a series of victories in caucuses, a format in which he has excelled, this year’s calendar has many more traditional primaries, supplying fewer chances for Mr. Sanders to drive up margins and keep the delegate tally close.

The result — implausible as it seemed last month, when Mr. Biden faltered so badly in Iowa and New Hampshire that establishment Democrats indulged fantasies about a contested convention to stop Mr. Sanders — is a race that could be nearing its functional end.

It is difficult to overstate the whiplash. The last time Mr. Biden ditched one of his own election night parties, he was careening toward a fifth-place finish in New Hampshire in mid-February, skipping out on a Nashua gathering to seek refuge in South Carolina and accept his election-night fate from a safe distance.

On Tuesday, he again pulled out of an event — but this time, out of concerns that his crowd in Cleveland could be exposed to health risks amid the coronavirus scare. Mr. Biden headed instead to Philadelphia, the site of his campaign headquarters, where at the National Constitution Center he sought to project resolve in a time of national anxiety.

With his wife, Jill Biden, by his side, Mr. Biden appeared to describe the race as he sees it now: effectively over on the Democratic side — he thanked Mr. Sanders and his supporters for their “passion” — leaving voters with a choice between himself and President Trump.

And that, he suggested, was not a close call.

“At this moment, when there’s so much fear in the country, and there’s so much fear across the world, we need American leadership,” Mr. Biden said. “We need presidential leadership that’s honest, trusted, truthful and steady. Reassuring leadership.”

Mr. Sanders and his team have not ceded the election publicly, though as the latest election returns came in, his campaign said he would not be speaking Tuesday night. His supporters say that there are many states yet to weigh in, many issues yet to litigate, many chances left for Mr. Biden to squander his advantages — as he has, on and off, for much of the past year as a would-be front-runner who surrendered the label. The Sanders campaign has been eager for the scheduled debate this Sunday, the first one-on-one session with Mr. Biden, a lengthy unscripted setting that could showcase his propensity for missteps.

But if Mr. Sanders could not hold his own on Tuesday — especially in a state like Michigan, the site of his most memorable primary victory of 2016 — it is becoming hard to imagine where he might.

In a sense, Mr. Biden is offering something of a 2016 do-over, coated in patriotism and wishful thinking: Remove Mr. Trump. Prove that the country does not represent his values. And let the work of repair begin, dooming the 45th president to history’s amnesia, eventually.

Mr. Biden decided against a run four years ago as he mourned his son Beau, who died in May 2015. Now, he is running the kind of campaign that voters might expect from a vice president seeking a promotion immediately after his time as second in command, as if the last four years could be effectively elided. He is promising continuity with his party’s prior administration, pledging to build on successes without wide-scale overhaul and even presenting himself as more of a transitional figure than a long-term standard-bearer.

“I view myself as a bridge, not as anything else,” Mr. Biden said in Detroit on Monday night, campaigning with new endorsers like Gov. Gretchen Whitmer of Michigan and Senators Kamala Harris and Cory Booker. “There’s an entire generation of leaders you saw stand behind me. They are the future of this country.”

Throughout the campaign, he has declined to meet the demands of the loudest voices on the left — he has super PAC support, attends high-dollar fund-raisers and remains unapologetic about overtures to Republicans — and none of it hurt him much. Instead, Mr. Biden is enticing Democrats with a bloodless bargain: a return to normal — or whatever this nation was on Nov. 7, 2016 — and a vow to make Mr. Trump go away, even if Mr. Biden rarely emphasizes a bold new policy vision.

It is a pitch that shares some elements with Mrs. Clinton’s in 2016, centered often on Mr. Trump’s character and behavior. Mr. Biden and his team seem convinced that the reality of Mr. Trump’s tenure will yield a different outcome this time, with the daily tumult more visceral to voters now than it was in Mrs. Clinton’s prescient-but-hypothetical predictions of executive disorder and excessive tweeting.

There is also the messenger to consider. Mr. Biden recently remarked on an “unfair” sexism in the campaign four years ago. Then came an aside, blunt but true: “That’s not going to happen with me.”

Mr. Sanders is summoning 2016 memories of another sort. After his setbacks this month, he finds himself in much the same bind he faced against Mrs. Clinton, seeking ways to prolong the primary but finding few opportunities for true breakthroughs.

In recent days, Mr. Sanders and his allies have made the case that Democrats would be foolish to nominate the more moderate candidate once again, reminding audiences of Mr. Biden’s potential vulnerabilities on matters of trade and the Iraq war.

“Lots of flashbacks,” said Nina Turner, a former Ohio state senator and Mr. Sanders’s national campaign co-chair. “2016 has never ended.”

Mr. Trump, she added, was sure to reprise a formula that worked for him the last time, if Democrats let him. “You best believe Donald J. Trump is going to make this a repeat of 2016,” Ms. Turner said, comparing Mr. Biden’s record to Mrs. Clinton’s. “There are so many similarities for him to hit.”

The president, still known to recount the details of his election victory years after the fact, is not the only veteran of that campaign inclined to linger over it. Mrs. Clinton is starring in a new documentary series in which her loss is featured prominently.

And Mr. Sanders, pressed repeatedly of late about whether his attacks on Mr. Biden might damage the former vice president in November, appeared to grow frustrated last week with a trope he recognized well.

“I heard that back in 2016,” he told reporters in Phoenix. “2016, the feeling was, ‘We should anoint the candidate, and get everybody else — get out of the race.’ Is that really what democracy is about?”

Mr. Biden has not generally felt like a candidate on a glide path to an anointing, though he has appeared exceedingly happy on the campaign trail in recent days, wearing his signature aviator sunglasses indoors at an ice cream shop in California last week and telling reporters about his cash windfall between spoonfuls.

But winning has not changed the underlying weaknesses that defined him through the early states. Despite the growing presence of teleprompters, he still sometimes sets off on long tangents and makes verbal blunders.

He continues to struggle to excite some young people and progressives. He can lose his temper in heated and colorful ways, a trait that delights some voters who take it as a sign of vigor but strikes others as unseemly for a man pursuing the statesman’s mantle. (Mr. Biden swore at a man in Michigan who had suggested Mr. Biden wanted to confiscate guns. “Don’t be such a horse’s ass,” he said at another point in the exchange.)

After Iowa, Mr. Biden’s team underwent a shake-up, and people inside and outside the campaign have since reported more signs of a righted ship. Just last week, three former rivals — Pete Buttigieg, Amy Klobuchar and Beto O’Rourke — announced their endorsements in the span of a few hours, in an extraordinary show of force that sent Mr. Biden into Super Tuesday with a burst of momentum and free media.

It was the kind of dramatic turn that felt essential to boosting a campaign eager for any jolt it could find as it sought to catch up to Mr. Sanders, the early delegate leader.

A week later, Mr. Biden’s success registered as something even more stunning, in its way: a little boring.

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Trump to Meet Bank Executives Amid Market Turmoil

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As the markets rage and more businesses reel from the impact of the spreading coronavirus, President Trump plans to meet with officials from the nation’s banks at the White House on Wednesday afternoon.

The meeting, which is scheduled for 3, is expected to be attended by top executives of the biggest banks, including David Solomon, the chief executive of Goldman Sachs; Brian Moynihan, chief executive of Bank of America; Charles Scharf, the chief of Wells Fargo; Gordon Smith, the co-president and chief operating officer of JPMorgan Chase; and Michael Corbat, chief executive of Citigroup, according to bank officials who have been briefed on the plans.

Other attendees scheduled to be there include Rob Nichols, chief executive of the American Bankers Association, according to a person briefed on the matter; Andrew Cecere, chairman and chief executive officer of USBancorp; and Kelly King, chairman and chief of Truist, the new company formed by the union of BB&T and SunTrust banks.

The full agenda of the meeting, which Treasury Secretary Steven Mnuchin mentioned on Monday but had not yet been formally announced, is not clear. But Mr. Trump is expected to attend, and the bank executives are preparing to address questions on their views of the recent market volatility, the funding of small businesses and their own economic outlooks, according to some of the bank officials who have been briefed on the plans.

“We’ll be talking to them about what they can do to help small businesses and companies that are impacted,” Mr. Mnuchin said at a White House briefing on Monday.

Hundreds of businesses, small and big, have been hit by the coronavirus outbreak, which has so far infected more than 116,000 people in some 103 countries. Airlines have cut service, signaling that ticket sales are falling as the epidemic spreads. Restaurants, retailers and other small businesses are seeing fewer customers. Supply chains of manufacturing companies have been disrupted since the outbreak started in China — home to many factories that make products for American businesses.

Stocks went through more turbulence on Tuesday, after Monday’s enormous plunge. The S&P 500 rose nearly 5 percent, recouping more than half of Monday’s losses. Crude oil futures on the West Texas Intermediate market, the United States benchmark, were up more than 11 percent after a precipitous decline Monday on news that Saudi Arabia would boost production and slash prices.

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Amid the market carnage, stock prices for banks, which have exposure to a wide array of companies and consumers that they lend to and undertake transactions for, have plunged, too.

Bank stocks have been clobbered because investors worry that their lending businesses will become less profitable as lower interest rates kick in, and because of fears that struggling companies could default on their loans. On March 3, the Federal Reserve slashed its policy rate by half a percentage point in an emergency move, and is expected to cut further in the coming months.

“You could see these bank stocks come under more pressure,” said Nathan Stovall, principal analyst at S&P Global Market Intelligence, in an interview Tuesday, though already “there is a pretty negative scenario priced in here.”

Many banks also have heavy exposure to the oil industry. After Saudi Arabia cut the price of oil this week, stocks of companies in the oil patch plummeted. Many investors expect that these companies, which typically borrow heavily to fund their operations, will struggle to sell their oil and pay off their loans. Banks including Bank of America and Wells Fargo have billions of dollars of loans in the energy industry. While these giant banks’ oil exposure is only a part of their vast lending portfolios, smaller banks have a greater share of their business tied up in energy loans.

But all the volatility has an upside for banks as well: At firms like Goldman, Citigroup, Bank of America and JPMorgan, the high volume of trading in recent weeks has created revenue opportunities as traders and salespeople work with clients to continually rebalance their portfolios of global stocks, bonds and currencies.

“Volumes across the board in kind of every asset that I deal with have been quite large over the past two weeks,” said Jen Roth, who runs Goldman’s currencies and emerging-markets business in the United States, in an interview last week.

On Tuesday, many of the bank executives planning to attend the White House meeting were still preparing what to say, said the bank officials briefed on the plans.

But one thing is clear: Even as banks take precautions to limit the spread of coronavirus among their employees and face potential losses, these financial institutions are, arguably, in much better health and better prepared for the turbulence than they were during the 2008 financial crisis, which led to multiple bank failures and distressed asset sales. New financial regulations put in place in the aftermath of that recession pared risk-taking and increased transparency into bank planning and operations, making them stronger entities.

“Capital is substantially higher and substantially better quality than it was 12 or 13 years ago,” said Daniel Tarullo, who was the Fed’s key architect of post-crisis bank oversight. But, Mr. Tarullo, who is now at Harvard University, said: “That’s not to say that there’s certainly enough capital for this particular kind of risk.”

While banking executives and veterans said they saw little need for government assistance to the industry, some said banks could instead play a crucial role in helping consumers. For instance, the former Goldman executive Gary Cohn said banks could allow strapped consumers, who are either ill or out of work because of canceled travel or events, to defer payments on their monthly credit-card or mortgage bills until they are able to return to work.

“I don’t think people are concerned about companies, per se,” said Mr. Cohn, Mr. Trump’s former National Economic Council director. “What they should be concerned about is individual workers.”

On Monday, the Fed and other regulators put out a statement — like the one it issues after hurricanes and other natural disasters — assuring banks that they could be flexible with customers affected by the coronavirus without worrying about supervisory backlash.

The agencies “encouraged financial institutions to meet the financial needs of customers and members affected by the coronavirus” and said that “prudent efforts that are consistent with safe and sound lending practices should not be subject to examiner criticism.”

The National Federation of Independent Business, a major small-business association, said its members were not yet expressing concern over credit availability.

“The big risk right now is the unknown of how this will affect the economy,” said Holly Wade, the group’s director of research and policy analysis.

As they prepared to meet with Mr. Trump, some of the bank executives were also deciding how best to travel to Washington from New York and other cities given the growing public-health crisis.

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It’s Not 9/11 or a Housing Crash. So What’s the Coronavirus Fiscal Playbook?

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The government can’t prevent the coronavirus from damaging the U.S. economy.

The usual tools that economic policymakers rely on, like tax cuts and stimulus spending, won’t restore canceled conferences, unclog supply chains or persuade wary consumers to go out to bars and restaurants. Even if such policies would help, they conflict with the advice of health officials who are urging “social distancing” to slow the spread of the virus.

But that doesn’t mean policymakers are powerless. Economists say well-designed programs could limit the damage and help ensure a quick rebound.

President Trump said Monday that he would meet with congressional leaders to discuss a “very substantial” payroll tax cut and other measures. Many economists are skeptical of that approach, arguing that a payroll tax cut would be too small and too poorly targeted to be of much help.

Instead, they recommended a variety of other steps, some narrowly aimed at addressing the outbreak and some intended to bolster the broader economy. One lesson from the last recession is that the government has to move quickly.

“You’ve got to go big, and you’ve got to go fast,” said Claudia Sahm, a former Federal Reserve staff member who is now director of macroeconomic policy at the Washington Center for Equitable Growth, a left-leaning research organization. “If you don’t go fast, you’re not going to short-circuit it.”

Here are some forms that such intervention could take.

The surest way to limit the economic damage, of course, is to limit the spread of the disease itself. That is mostly the responsibility of health officials. But policymakers can take steps to make the job easier, said Jay Shambaugh, director of the Hamilton Project, an economic policy arm of the Brookings Institution.

The federal government, for example, could offer to cover some of the Medicaid costs that states usually bear. That would make it easier for states — which, unlike the federal government, generally must balance their budgets each year — to respond forcefully to the virus. It would also make it less likely that states would have to raise taxes or cut programs to pay for coronavirus spending, which could further damage the economy.

“The front lines in all of this is going to be at the state level, and so anything we can do to free up their budgets a little bit will help,” Mr. Shambaugh said. “You want to make sure the states aren’t making choices that are fiscally constrained.”

More generally, Mr. Shambaugh and others said, the federal government should spend whatever it takes to address the outbreak. Yields on government bonds have fallen to record lows in recent days, meaning the government can borrow money at little cost.

The early stages of the coronavirus outbreak have had an acute impact on a relatively narrow set of industries and places. Airlines are warning of huge losses. Cruise operators are reeling. Restaurants are losing business in cities with substantial outbreaks, or where large events have been called off.

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There are clear humanitarian reasons for helping the people who will lose jobs or income because of the outbreak. But there are also economic reasons. The clearest way for the virus to cause a recession is for the impact to spread beyond directly affected sectors, as people who lose jobs are forced to cut spending, leading to further job losses. Government programs could help prevent that.

“What a fiscal stimulus can do is try to erect firewalls as much as possible and try to make sure it doesn’t ripple out and affect the rest of the economy,” said Josh Bivens, director of research for the Economic Policy Institute, a progressive think tank.

Those programs could take various forms. Mr. Trump on Monday floated the idea of offering loans through the Small Business Administration to affected businesses, something that economists said could help minimize layoffs and keep companies from going out of business. The Federal Reserve on Monday also indicated it would allow banks to be flexible with customers if they fell behind on loan payments because of virus-related disruptions.

Adam S. Posen, president of the Peterson Institute for International Economics, likened the situation to the financial freeze-up after the collapse of Lehman Brothers in 2008. Back then, the Fed provided liquidity so that financial institutions could ride out the crisis. The federal government could play a similar role now.

“You got a bunch of people, small businesses — particularly in retail, transportation, hospitality, tourism — that are going to be temporarily disrupted and might go out of business and shed jobs, but that’s only because of this one-time shock,” Mr. Posen said. “So fiscal policy should be the bridge to get them over that shock.”

Other programs could focus on individuals. The unemployment insurance system, for example, generally requires people to be actively searching for work to receive benefits, something that could be difficult if they are quarantined or are avoiding in-person interactions. Food stamps and other anti-poverty programs have work requirements, meaning people can lose benefits if they don’t work enough hours. Waiving or changing those rules could help people affected by the virus, and support efforts to contain the outbreak by making it easier for people exposed to the virus to stay home from work.

The trouble with carefully tailored stimulus efforts is that they could take time to design and carry out, and might not reach all the affected people and industries. Airlines and cruise operators are easy to identify, but it is harder to identify the Uber driver in Austin, Texas, who lost out on business when the South by Southwest conference was canceled, or the coffee cart owner in Midtown Manhattan who is suffering because people are working from home.

“Lots of people will be affected in lots of ways, and you can’t find them quite as perfectly as you’d like,” said Jason Furman, who led the Council of Economic Advisers under President Barack Obama.

Mr. Furman, in a Wall Street Journal opinion piece last week, proposed an immediate, one-time payment of $1,000 to every adult, plus $500 for every child. For families hurt by the virus, such payments would provide a cash infusion to help cover rent, food and other costs, without having to determine exactly who those people are.

That kind of broad-based program would also serve as a stimulus, helping to kick-start the economy once the outbreak passed. Targeted programs aren’t big enough to affect the overall economy, but a program like the one Mr. Furman is proposing — he estimated the cost of it and some other stimulus proposals at $350 billion — would be.

Stimulus efforts like Mr. Furman’s are an established part of economic firefighting. President George W. Bush tried a similar, albeit somewhat smaller, cash rebate program in 2008.

But not all economists are convinced that such a program makes sense when the damage is still unclear. Despite the turmoil in financial markets, there has been almost no hard data suggesting an economic collapse.

Michael R. Strain, an economist at the American Enterprise Institute, a conservative think tank, said Congress could pass a stimulus now that would take effect only if economic indicators showed signs of trouble.

“We don’t know what the impact of this is,” Mr. Strain said. “We don’t know what the impact is going to be. And we aren’t in a situation where our only choice is to act today or not to act at all. That’s just not the choice.”

Glenn Hubbard, a Columbia University economist who led the Council of Economic Advisers under Mr. Bush, said the biggest economic damage so far had been to confidence. The best remedy for that, he said, would be for the government to make clear that it was ready to act to support the economy if necessary. He suggested a long-term infrastructure program, something that both parties have supported in the past and that would be comparatively inexpensive given low interest rates.

“You want to persuade businesspeople that demand isn’t going to go off a cliff,” Mr. Hubbard said. “You need to make a commitment that demand will be there and will continue to be there.”

In his comments to reporters on Monday, Mr. Trump highlighted a different way to put cash in consumers’ pockets: a payroll tax cut. That approach has been tried in the past, including under Mr. Obama.

Studies conducted since the financial crisis, however, have found that small, gradual tax cuts were less effective at stimulating the economy than larger lump-sum payments. Consumers are more likely to spend a one-time windfall, these studies have found. And crucially for forestalling a recession, they are more likely to spent it right away, when the economy needs the boost.

“Whatever they’re going to spend out of the $1,000, you want them to spend it now,” said Ms. Sahm of the Washington Center for Equitable Growth.

The most imminent threat to the economy, she said, is that people start to worry they will lose their jobs and pull back on spending as a result. A few extra dollars in each paycheck won’t change that calculus. A larger lump sum might.

“That would be the bigger problem right now, is people just stop buying cars and washing machines,” she said. “You give them money, and they will spend it.”

There are other potential downsides to a payroll tax cut as well. Because the payroll tax is calculated as a percentage of earnings, the biggest tax cuts would go to people who need the money the least. And people who lose their jobs or whose hours are cut to zero wouldn’t get any benefit.

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Trump Pitches Coronavirus-Related Stimulus Package on Capitol Hill

Westlake Legal Group 10DC-VIRUSECON-01-facebookJumbo Trump Pitches Coronavirus-Related Stimulus Package on Capitol Hill United States Economy Trump, Donald J Navarro, Peter Mnuchin, Steven T Kudlow, Lawrence A federal emergency management agency Coronavirus (2019-nCoV)

WASHINGTON — President Trump took his pitch for a coronavirus-related economic stimulus package to Capitol Hill on Tuesday, joining Senate Republicans over lunch to discuss cutting payroll taxes, offering targeted relief to tourism and hospitality industries, and other possible steps to lift economic growth.

After the meeting, a Senate aide said Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi of California would take the lead on negotiating a bipartisan package.

Mr. Trump emerged from his lunch with no new details to share on the package, which remained in flux throughout the day on Tuesday, amid internal struggles at the White House and a cool reception among congressional Republicans to the temporary payroll tax cuts that the president has floated. Mr. Trump said the payroll tax cut and other ideas were discussed, adding that “there’s great unity within the Republican Party.”

He acknowledged there was not yet a consensus on how to proceed but expressed confidence that the economy would endure.

“Be calm,” he said from Capitol Hill, after speaking with lawmakers. “The consumer has never been in a better position than they are now.”

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Mr. Trump and his advisers are also considering using the Federal Emergency Management Agency as a vehicle to deliver funds to stimulate the economy, a move that could allow the administration to begin bolstering growth without waiting for Congress. The president could approve major disaster declarations in a growing number of states that have seen coronavirus outbreaks, according to officials in the administration and in Congress.

Such approvals would allow FEMA to begin distributing aid to affected individuals, such as emergency food stamps, and to states and local governments for efforts including “emergency protective measures.”

The idea is one of many options being proposed to help alleviate economic strain from a virus that is quarantining workers and consumers, scuttling vacations, closing factories and causing other disruptions.

Lobbyists in Washington suggested that several possible plans were under consideration on Tuesday, including tax credits for companies that retain employees who are unable to work because of quarantines and the possibility of allowing firms to delay paying a portion of their estimated quarterly corporate tax bills until the spread of the virus — and its economic effects — subside.

Other possibilities included temporarily suspending some excise taxes, such as the 7.5 percent tax airlines pay to the Federal Aviation Administration; increasing community development block grants; and fixing an error in the 2017 Republican tax overhaul that makes it more expensive for restaurant owners to do renovations.

Mr. Trump previewed several ideas at a news conference on Monday evening, but discussions remain in flux and many of the proposals would require congressional approval at a time of deep partisan ire and with the 2020 election looming.

The idea of a payroll tax cut in particular has divided Mr. Trump’s advisers, with Mr. Mnuchin and Larry Kudlow, the director of the National Economic Council, expressing concerns about the cost, whether it would address the problems caused by the virus and what Democrats would demand if they reopen the tax code.

However, Peter Navarro, Mr. Trump’s trade adviser, has been a proponent of the idea, and Mr. Trump has been pushing for it to be included in a package of options.

Mr. Navarro has often been at odds with Mr. Trump’s other economic advisers over trade policy. His appearance with the coronavirus task force at Mr. Trump’s White House briefing on Monday raised eyebrows among some officials who wondered if he had inserted himself into the fiscal stimulus discussion.

Mr. Navarro said in an interview that he was there at the president’s request.

“The president specifically asked during the Oval meeting that I, by name, and other members of his economic and trade team stand with him on the podium, and I left when the president left,” Mr. Navarro said.

Leaders in the Democratic-controlled House have also reacted with skepticism to the payroll tax plan. They have pushed for the administration instead to ramp up spending on the public health response to the virus.

One area of agreement among Republicans and Democrats is the need for any package to include government-provided sick pay to workers who are unable to perform their jobs as a result of quarantines or caring for children whose schools are canceled over virus fears. It is unclear how such a program would work and how it would ramp up fast enough to prevent affected workers from missing payments on rent, credit cards or other bills.

Markets rallied on Tuesday morning on news of the stimulus request, after suffering steep losses Monday. But several congressional aides cautioned it will most likely take weeks, at minimum, to complete and approve any stimulus bill.

The White House is also considering other plans that would not require congressional action, such as allowing tax payments to be deferred. Mr. Trump said on Monday that the White House would hold another news conference at some point on Tuesday laying out stimulus measures in more detail.

While his advisers worked on the package, Mr. Trump on Tuesday called the Federal Reserve “pathetic” for keeping interest rates too high, renewing a regular gripe as coronavirus spreads both globally and domestically, roiling markets and threatening the economic outlook.

“Our pathetic, slow moving Federal Reserve, headed by Jay Powell, who raised rates too fast and lowered too late, should get our Fed Rate down to the levels of our competitor nations,” he tweeted. “The Federal Reserve must be a leader, not a very late follower, which it has been!”

Jeanna Smialek contributed reporting.

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It’s a ‘Swimming Naked’ Moment: The Financial System Has a Real Test

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The investor Warren Buffett once gave a famous warning: “It’s only when the tide goes out that you learn who’s been swimming naked.”

The tide has just gone out again, and clues to who’s been swimming naked have begun to emerge.

Mr. Buffett first made that comment in 1992, after Hurricane Andrew exposed the inadequacies of the insurance industry, to describe the rosy appearances that can mask financial recklessness until the good times end.

With a contagious virus seemingly out of control; supply chains disrupted and travel and tourism collapsing; an oil price war that has sent crude prices plunging to their biggest one-day drop since 1991; and stocks that may have just careened into a bear market for the first time in 11 years, the financial system is about to undergo its first real-life stress test since the financial crisis and recession more than a decade ago.

“I’m worried,” the Harvard economics professor Jeremy Stein told me on Monday, as the Dow Jones average was dropping a record-setting 2,000 points. “I don’t usually think of the stock market as having that large a quantitative impact on the real economy. But with credit markets also beginning to show real signs of strain, the potential for damage is elevated.”

On some level, we all knew that the unprecedented bull market that began exactly 11 years ago wouldn’t last forever. But as the years went by with only short-lived corrections, the horizon for the next bear market seemed to be receding ever further into the future. How bad could it get, with U.S. unemployment at an all-time low and short-term interest rates barely above zero?

And if things got bad, the Federal Reserve was there to take care of us — especially with a president browbeating the Fed chairman to keep stock prices rising. “Investors’ misplaced confidence in the Fed’s ability to control the stock market, and even the economy, is being heavily tested by this steep correction,” said Jim Stack, a market historian and founder of InvesTech research. “I’m concerned that a lot of risk-averse capital has gone into the stock market over the past few years without appreciation for the inherent risk in a mature economy and late-stage bull market.”

That kind of complacency is exactly what breeds overconfidence, unsustainable valuations, and, finally, bear markets. They tend to begin when investors least expect them, with causes that at the time are unforeseeable — like the emergence of the coronavirus.

While the full extent of the damage remains to be seen, there’s no doubt that the spreading virus will take a serious toll on global economic activity. Tourism alone accounts for 13 percent of Italy’s gross domestic product. Even if that is cut in half, it would have a devastating impact on Europe’s fourth-largest economy and its still-fragile banking system.

And that’s just one country. Travel and tourism are slumping worldwide. Meetings and conferences are being canceled. Schools and universities are suspending in-person classes. The prospect of sharply diminished economic prospects is a major reason that oil, banking and airline stocks are dropping even more than the market as a whole. That’s not an irrational investor panic.

But a falling stock market, in and of itself, isn’t likely to trigger a recession. It didn’t cause the financial crisis, but it did help expose the excesses of the mortgage-backed securities market and inflated real estate prices, which in turn led to the collapse of Lehman Brothers and a worldwide recession.

There’s no reason to believe that anything of that magnitude is lurking within the financial system today. But no one can be sure until the financial plumbing comes under pressure.

Already, some stresses are emerging, especially in credit markets. With risk-free U.S. Treasury yields at historic lows after the financial crisis, investors poured into riskier, high-yielding debt, especially junk bonds. Since the emergence of the virus, that flow has reversed abruptly. Last week investors pulled out $12.2 billion from mutual funds and exchange-traded funds that buy corporate bonds and loans, the largest amount since the financial crisis. Investors withdrew $5.1 billion from junk bond funds, after pulling $4.2 billion the week before.

Junk bond worries were already acute in the oil sector even before the Russia-Saudi Arabia price war. Energy companies account for 13 percent of triple-C-rated bonds, the bottom tier of the high-yield market. Those bond yields surged to nearly 13 percent last week as prices dropped. (Yields move inversely to prices.)

The risk is that a wave of defaults and bankruptcies in the oil sector could start a chain reaction. Some issuers were already rushing to reassure investors that they had adequate liquidity to meet debt payments. But shares in Chesapeake Energy, a big junk bond issuer, dropped to 15 cents on Monday, a 30 percent one-day decline.

Leveraged loans, which are private loans to already heavily indebted borrowers, could now emerge as the mortgage-backed securities and collateralized debt obligations of the financial crisis. Just as mortgage and debt securities were packaged, carved up and sold to often unwitting investors before the financial crisis, risky high-interest loans have been similarly packaged over the past decade, mostly by nonbank issuers. Given their high yields, collateralized loan obligations, or C.L.O.s, as they’re known, surged in popularity, and the market for them had grown to an estimated $1.2 trillion by the end of last year.

Professor Stein is concerned that no one knows how the leveraged loans will perform in a downturn. “I’m worried about all the nonbank corporate lending,” he said. “So much of the credit formation has been in the leveraged lending market and the ultimate suppliers are nonbanks. They’ve done well. But when they hit their first round of defaults, this will be new. There may turn out to be something of a bubble.”

European banks are another potential weak link. The London-based HSBC Holdings and Standard Chartered have already issued profit warnings because of the coronavirus, but if the crisis deepens, others could be at risk. “Italy has always been just one shock away from crisis,” Professor Stein said. “The European Central Bank will have to act very aggressively if the Italian banks run into solvency problems.”

All of this is unfolding after years of low interest rates, which have left the Federal Reserve with only so much room to maneuver. Professor Stein was a Fed governor from 2012 to 2014, and “I’d have to vote for a rate cut if I were still there,” he said. “But how much effect can that have? The interest rate on 10-year is already below 0.5 percent.”

One answer may by aggressive fiscal stimulus rather than monetary policy. “The first line of defense has to be: Stop the virus,” Professor Stein said. “The second should be fiscal policy. I’d give everyone a fast tax cut so that people who miss a couple of paychecks aren’t immediately left in distress.”

Fiscal policy, of course, depends on the White House and Congress enacting legislation. As the market was plunging Monday, President Trump blamed the “fake news media” for inflaming the sense of crisis and added, incorrectly, that “nothing is shut down, life and the economy go on.”

A few hours later, in a White House press briefing, he said he would push for a payroll tax cut and financial help for hourly workers who are hurt by the disruption. Stay tuned.

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Coronavirus Live Updates: China’s Xi Jinping Visits Outbreak’s Center in Sign of Confidence

Here’s what you need to know:

ImageWestlake Legal Group merlin_170226627_36615882-5b56-4c5c-a175-fe2c07b1613c-articleLarge Coronavirus Live Updates: China’s Xi Jinping Visits Outbreak’s Center in Sign of Confidence Xi Jinping Wuhan (China) Trump, Donald J Coronavirus (2019-nCoV) China

Xi Jinping, the Chinese leader, visiting a lab in Beijing last week. He had led efforts to control the outbreak from the capital, only visiting Wuhan on Tuesday.  Credit…Ju Peng/Xinhua, via Associated Press

The Chinese leader Xi Jinping arrived on Tuesday in Wuhan, visiting the center of the global coronavirus epidemic for the first time since the outbreak began and sending a powerful signal that the government believes the worst of the national emergency is over.

Mr. Xi’s visit was reported in a brief bulletin from Xinhua, the main official news agency, which said he met with front-line medical workers, military personnel, community workers, police officers and officials.

His trip is sure to be seen as a sign that China’s leaders believe that a series of draconian restrictions, including the lockdown of hundreds of millions of people starting in late January, have brought the outbreak under control.

According to official data, coronavirus infections have recently receded in China, falling to a few dozen new cases every day, nearly all of them in Wuhan, the provincial capital.

On Tuesday, China said it recorded 19 new infections from the coronavirus, and 17 deaths, in the past 24 hours. All but two of the newly confirmed infections were in Wuhan, the central Chinese city where the virus originated. The remaining two infections were people who contracted the virus after traveling abroad.

Wuhan remains the source of most new infections, even as the overall number of cases has fallen. More than three quarters of the 3,136 deaths recorded in China were in the city of 11 million people.

In Wuhan, most residents remain under heavy restrictions. But growing numbers of neighborhoods across the city have been declared free of new infections, and officials have said that the last two makeshift isolation centers for patients with mild cases of coronavirus infection would close.

The Italian government on Monday night extended restrictions on personal movement and public events to the entire country in a desperate effort to stem the coronavirus outbreak — an extraordinary set of measures in a modern democracy that values individual freedoms.

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Prime Minister Giuseppe Conte announced in a prime-time news conference that public gatherings were banned and that people would be allowed to travel only for work or for emergencies.

Those restrictions had been placed on the “red zone” created in northern Italy, covering about 16 million people, but Mr. Conte extended them to an entire nation of 60 million.

“We all have to renounce something for the good of Italy,” said Mr. Conte, saying that the government would enact more stringent rules over the entire Italian peninsula.

Italy has recorded more than 9,000 coronavirus infections and 463 deaths — well over half the toll for Europe — and the numbers continue to climb fast.

While the coronavirus prompts shutdowns and economic alarm across the world, the Chinese province where the epidemic began announced that it would — ever so carefully — restart business and manufacturing.

Leaders in Hubei Province, the source of the global outbreak, laid out plans on Monday after the province recorded a significant fall in the daily number of new infections and deaths from Covid-19, the disease caused by the virus.

Ying Yong, the province’s highest-ranking official, said the government would lift travel restrictions in areas of low risk to allow workers to get to their jobs. The risk level for each area of the province would be rated and those in low-risk areas would soon be allowed to travel.

Since January, much of Hubei has been under a lockdown that has deterred tens of millions of residents from moving around, or even leaving their homes.

“Currently, epidemic containment in Hubei Province has been shown promising developments and a sustained positive momentum, but the tasks of prevention and control remain arduous,” Mr. Ying told officials, according to the official Hubei Daily on Tuesday.

At the same time, Mr. Ying added, the province would “advance the planning so that people can move around in a safe and orderly way and enterprises can revive production.”

Mr. Ying did not spell out what would happen in Wuhan, the provincial capital, but his wording suggested that the city would remain cordoned off for now, even if the rest of Hubei loosened up.

President Trump has been promising the imminent arrival of a vaccine to halt the spread of the coronavirus.

Federal health officials have repeatedly pointed out that his timetable is off — it will take at least a year — but Mr. Trump’s single-minded focus on warp-speed production of a new vaccine represents a striking philosophical shift.

For years, he was an extreme vaccine skeptic who not only blamed childhood immunizations for autism — a position that scientists have forcefully repudiated — but once boasted he had never had a flu shot.

At least a decade before Mr. Trump was elected president, with responsibilities that would include nominating experts to lead the nation’s health centers, the hotelier and commercial developer was holding forth with great confidence about medical topics. When an interviewer would note that physicians disagreed with the dim view he took of vaccines, Mr. Trump remained ever ebullient, impervious and dismissive of scientific authority.

Now, as his federal health agencies tackle the rapidly morphing coronavirus epidemic and he and his administration come under fire for serious missteps in managing it, Mr. Trump has had to adjust his messaging. He is now all in on a vaccine and the sooner the better, says the man who in 2015 said that he didn’t “like the idea of injecting bad stuff in your body.”

Europe had already been teetering toward trouble.

Even before the coronavirus outbreak quarantined the industrial heart of Italy and emptied the teeming streets of Venice, before France banned public gatherings and major trade shows were canceled in Germany and Spain, economists were openly warning about the prospect of an economic downturn across the continent.

Now, Europe is almost certainly gripped by a recession, amplifying fears that the global economy could be headed that way, too.

“It seems pretty difficult to avoid a recession in the first half of the year,” said Ángel Talavera, head of European economics at Oxford Economics in London. “The spread of the disease in Europe is a game changer. The question is how deep it will be, and how long it will last.”

As the world absorbs the consequences of Europe sinking into a slump just as China suffers a profound downturn, the sense of alarm is heightened by another question with no obvious answer: Can European leaders transcend their often-bitter differences to forge an effective response — especially when this crisis may be beyond traditional economic policy prescriptions?

The sudden upheaval in the oil markets may claim victims around the world, from energy companies and their workers to governments whose budgets are pegged to the price of crude.

The fallout may take months to assess. But the impact on the American economy is bound to be considerable, especially in Texas and other states where oil drives much of the job market.

With the coronavirus outbreak slowing trade, transportation and other energy-intensive economic activities, demand is likely to remain weak. Even if Russia and Saudi Arabia resolve their differences — which led the Saudis to slash prices after Russia refused to join in production cuts — a global oil glut could keep prices low for years.

Many smaller American oil companies could face bankruptcy if the price pressure goes on for more than a few weeks, while larger ones will be challenged to protect their dividend payments. Thousands of oil workers are about to receive pink slips.

The battle will impose intense hardship on many other oil-producing countries as well, especially Venezuela, Iran and several African nations, with political implications that are difficult to predict.

The only winners may be drivers paying less for gasoline — particularly those with older, less fuel-efficient cars, who tend to have lower incomes.

“This is a clash of oil, geopolitics and the virus that together have sent the markets spiraling down,” said Daniel Yergin, the energy historian. ”The decline in demand for oil will march across the globe as the virus advances.”

Reporting was contributed by Jan Hoffman, Peter S. Goodman and Clifford Krauss.

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