The administration of United States President Donald Trump plans to offset the economic impacts of the fast-spreading coronavirus with aid to workers and businesses that will pump hundreds of billions of dollars into the US economy, Treasury Secretary Steven Mnuchin told lawmakers on Wednesday.
The White House is examining tax-relief measures, loan guarantees, reimbursing workers for lost pay, aid to small and midsize businesses, and support for airlines, hotels and other travel businesses, Mnuchin said.
The impact of the coronavirus was initially underestimated around the world, Mnuchin told a House of Representatives appropriations subcommittee.
“There are a large number of workers that going to be required to self-quarantine or be at home to take care of family members who are self-quarantined,” he said. “We think it’s appropriate for the government to pick up those costs,” Mnuchin said.
“This is a little bit like a hurricane,” he said, adding that the Trump administration was looking at using direct bank deposits or debit cards to give workers money, or reimbursing companies who keep paying employees forced to stay home.
The number of US coronavirus cases has risen steadily, and has affected almost three-quarters of US states. More than 1,025 cases and 28 deaths have been reported, according to a count by Johns Hopkins University.
The US Department of the Treasury will recommend that Trump delay the April 15 income tax filing deadline for individuals and small to midsize businesses, Mnuchin said, noting that could keep $200bn in the economy.
“We’re not looking to do that for rich people and big corporations, but for virtually all Americans, other than the super-rich,” he said.
Travel-related industries are going to be the hardest hit, Mnuchin said, and face a similar situation to the one after the September 11, 2001 attacks, Mnuchin said.
Airlines, hotels, and cruise lines are the sectors most impacted, Mnuchin said. He said Trump felt strongly that US companies needed to be protected, but not bailed out.
The White House hopes to reach an agreement on a stimulus plan with Congress within 48 hours and could announce initial steps over the next 24 hours, Mnuchin added. This would be just the first phase of the economic stimulus, he said.
Mnuchin emphasised that economic fallout from coronavirus would be temporary. The situation will not go on “for years”, he said.
“We will get through this,” Mnuchin said. “I am confident a year from now, the US economy will be in very good shape.”
On Wall Street, Mnuchin’s testimony did little to assuage investor anxiety over how badly coronavirus could damage the US and global economies.
In afternoon trading on the New York Stock Exchange, the Dow Jones Industrial Average was down around 1,200 points.