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Reuters
The White House is preparing an $850bn economic relief package
US Treasury Secretary Steven Mnuchin says the government wants to send cash to Americans in an effort to avert economic crisis caused by the coronavirus.
“We’re looking at sending cheques to Americans immediately,” he said.
The cheques are part of a potential $850bn aid package, which the White House is discussing with Congress.
It follows widespread school and shop closures as the number of coronavirus cases in the US passes 5,200 people.
The US has been debating how to provide relief as activity grinds to a halt in response to curfews and other measures intended to slow the spread of the virus.
Speaking at a press conference in Washington, Mr Mnuchin said the plans for the economic relief, which must be approved by Congress, would also include a bailout for airlines and hotels.
He said the government would also allow companies and individuals to delay their tax payments, among other measures.
“We look forward to having bipartisan support to pass this legislation very quickly,” he said.
US President Donald Trump initially proposed a payroll tax cut, which would reduce the money the government automatically withholds from worker pay to pay for social programmes.
However, that suggestion was widely criticised, with many economists arguing that it work too slowly and leave out those who lose their jobs. They had urged more direct assistance, including $1,000 payments.
Mr Trump said he had come round to the view that faster, more direct relief is necessary.
“With this invisible enemy, we don’t want people losing their jobs and not having money to live,” Mr Trump said, adding that he wanted to target the relief to those who need it.
Mr Mnuchin said he hoped to send the cheques within two weeks.
“Americans need cash now and the president wants to give cash now and I mean now, in the next two weeks.”
Jason Furman, an economist at Harvard University who was a top adviser to former President Barack Obama, is among those who have championed such a step.
“It would enable people to not work, if that’s what they need to do. It will prevent some people from not making their rent payments or other payments,” he said.
“There are a lot of ways to spend money that don’t involve going out.”
The White House push for major relief follows actions by the Federal Reserve to ease financial strains.
The bank on Tuesday said it will use emergency powers to purchase up to $1tr in short-term corporate debt directly from companies, reinstating a funding facility that was created during the 2008 financial crisis.
It is also offering another $500bn in overnight loans to banks. It has previously enacted two emergency rate cuts, and other stimulus measures.
Markets rallied following Mr Mnuchin’s announcement. They have been in turmoil for weeks, as investors respond to the likelihood that the coronavirus will cause a sharp contraction in the US economy in coming months.
Job cuts are already being felt in many industries and many analysts are warning of business failures.
“Companies’ ability to withstand the effects of the virus will depend on its duration,” said Richard Morawetz, a vice president at Moody’s.