President Donald Trump on Monday shared encouraging news on the second stimulus package. Trump said the next package could come in a couple of weeks. On Tuesday, Treasury Secretary Steven Mnuchin backed it up saying the Trump administration is discussing coronavirus stimulus round 2 and it could be passed in July.
Next coronavirus stimulus round: is it coming?
On Tuesday, speaking at the Bloomberg Invest Global virtual event, Mnuchin said it is “something that we’re very seriously considering.”
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Though both Trump and Mnuchin expect the next stimulus package to come in July, the approval process could extend to late July or the first week of August as the Senate is expected to take a two-week break from July 3 to July 17.
Another relief to Americans that Mnuchin talked about is extending the tax filing deadline. The deadline has already been extended once from April 15 to July 15. Mnuchin noted that the Trump administration could extend the tax filing date to help those hit hard by the coronavirus pandemic.
Mnuchin said they are still evaluating the situation to decide whether or not it would be beneficial to extend the tax filing deadline. “As of now, we’re not intending on doing that, but it’s something we may consider . . . We’ll look carefully as we approach this July date,” he said.
Recently, there were talks that Trump is considering a $1 trillion infrastructure bill to boost the economy. Talking about this, Mnuchin said it might not be a part of the stimulus package as it would not give the economy a sufficiently quick injection.
“Normally these are not shovel-ready (projects) . . . even if we pass something, this isn’t going to impact getting people back to work in September and October,” the Treasury Secretary said.
Mnuchin added that the next bill would be very focused, and would aim to help those out of jobs due to coronavirus to “get back to work quickly.”
Will there be stimulus checks?
Mnuchin, on Tuesday, also talked with the Republican senators, who are considering whether the next stimulus package should include direct payments to Americans.
“We want to take our time and make sure we are thoughtful,” Mnuchin said. “Whatever we do will be much more targeted and much more focused on jobs and bringing back jobs.”
Whether or not the coronavirus stimulus round 2 should include stimulus checks is the main discussion point for the next stimulus package. Several Republicans are concerned over the rising deficit, and thus, want to trim down the stimulus package.
Those in favor of the direct checks say it is important for the low- and middle-income individuals that have been hit hard by the coronavirus. Those against stimulus checks cite the rising fiscal deficit and improving unemployment numbers as a reason to exclude it from the relief package.
Trump, however, has supported the idea of stimulus checks, but support is mixed among congressional Republicans.
Larry Kudlow, the White House economic adviser, also sounded optimistic on the stimulus checks. Speaking to Fox Business television on Tuesday, Kudlow said the measures under consideration include either tax rebates or cheques.
“Probably we would want to target [money] to those folks who lost their jobs and are most in need,” Kudlow said.
Bill Hoagland, senior vice president at the Bipartisan Policy Center, also came up with positive news on the stimulus checks. Hoagland noted that Trump’s support could help push the second round of stimulus check.
The official said that direct payments do not always reach those needing such payments and it adds “significantly” to the federal deficit, but “in a recession and an election year, the probability of them be enacted with the president’s support is high.”
How is U.S. economy doing?
On the rising fiscal deficit due to the relief packages, Mnuchin said it (package) was necessary considering the unprecedented economic shock.
“Fighting this virus is like fighting a war. The president and I were determined to spend what we needed to spend to protect the American workers,” he said. “The good news is, long-term interest rates are very low. So, the cost of this debt is very low . . . Over time, we’re going to need to deal with the debt.”
When asked if he was concerned about the health of the U.S. banks, Mnuchin said the banking sector is much stronger now than it was about a decade back at the time of the financial crisis.
“The banks had very good capital and very good liquidity coming into this,” Mnuchin said.
Talking about the U.S. economy, Mnuchin said he expects the economy to exit the recession by the end of the year. The Treasury Secretary noted that he and the president are not in favor of another lockdown, in case there is a resurgence in coronavirus cases.
Mnuchin said that in March when businesses were asked to shutdown, some hospitals were crammed full with patients and there was a shortage of ventilators. The situation now is very different, he said.