[US] President Trump Wants ‘At Least $2 Trillion’ For Next Stimulus Bill


 
18 JUN 2020

According to a top White House adviser, President Donald Trump wants “at least $2 trillion” for the next stimulus bill. Forbes reports on the president's demand and what it means.

White House trade advisor Peter Navarro has said President Trump wants the next stimulus bill to be “at least $2 trillion.” This figure is two-thirds the size of the $3 trillion Heroes Act that House Democrats passed and nearly doubles the $1 trillion Senate Majority Leader Mitch McConnell said he intended to target. (Links via original reporting)

Mr Navarro shared his knowledge about the fourth stimulus package during a Fox Business interview with Maria Bartiromo. (Link via original reporting)

He said manufacturing jobs could be the focus of the next stimulus bill. If correct, this counters prior chatter about a potential return-to-work bonus and a payroll tax cut. Though both could still be included). Mr Navarro also reportedly made the following comments:

  • COVID-19 has hit major metropolitan areas, specifically impacting “high rise density” and “mass transit.” If those are not working, “then you can’t have a city.”
  • A “key thrust” of any Phase 4 stimulus must be more manufacturing jobs.
  • The focus should be “Buy American,” “Hire American” and “Make it in the USA.”
  • When you support more manufacturing jobs, you can create a ripple effect to create more service-sector jobs that have been dislocated [from the COVID-19 pandemic].

He added, “The president is very interested in something on the order of least $2 trillion, with the bulk of that focused on bringing home our manufacturing base.” 

Mr Navarro said pharmaceuticals and medical supplies and equipment were two sectors that House Minority Leader Kevin McCarthy believes should be given incentives in the next stimulus bill to bring manufacturing jobs from abroad to the US.

What incentives might be available?

Mr Navarro said that the US should return more manufacturing jobs home in order to produce high-quality American-made products. When Ms Bartiromo asked what types of incentives Congress can give companies to bring those manufacturing jobs back Mr Navarro said that:

  • [The next stimulus bill] needs to create demand, supply and investment signals to bring manufacturing to the U.S.
  • A payroll tax cut is “critical” to “create the appropriate incentives for employers to keep workers working” and is “an implicit pay raise for the workers”
  • Medicine, medical supplies and equipment should be bought from America

“First-time tax cuts, deregulation, cheap energy and above all fair trade deals,” he said. “We’re going to do all of that, but we’ve got to do more. We’ve got to focus on this buy American, hire American, make it here so that all around this great country we’re going to have Americans making stuff with high technology.”

Do not expect a second stimulus cheque

While a second stimulus cheque is possible, the trade advisor did not talk about the notion of a second stimulus cheque as a focal point of the next stimulus bill. On Capitol Hill earlier this week, Treasury Secretary Steven Mnuchin said that the Trump administration is “seriously considering” more stimulus. 

That stimulus could come in several forms of “direct money,” but would primarily be focused on helping return people to work. His reference to direct money could be about a second stimulus cheque or it could refer to funding for businesses in specific sectors of the economy that have been worst hit by the coronavirus pandemic. 

Do not expect a second stimulus cheque though. The House approved the Heroes Act, a $3 trillion stimulus bill including a second stimulus cheque of up to $1,200 for each individual and $1,200 for each dependent (up to three dependents). However, the Senate will not approve the Heroes Act in its current form and Mitch McConnell is not in favour of a second stimulus cheque.

The next step

Senate Republicans and White House advisers will collaborate to draft the next bill. But there may be disagreements over its size ($1 trillion vs. $2 trillion) and priorities; ranging from return-to-work bonus, a payroll tax cut and financial incentives to bring manufacturing jobs from abroad. The Senate will not vote on the fourth stimulus package before July, at the earliest.

Source: Forbes

 

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