Trump Declares Coronavirus National Emergency

Plus: A deal with Pelosi for a massive relief package By Yuval Rosenberg and Michael Rainey Trump Declares Coronavirus a National Emergency, Backs Congressional Relief Bill President Trump declared the coronavirus a national emergency on Friday and House Speaker Nancy Pelosi announced that, after days of frenzied negotiations, she had reached an agreement with the administration on a large economic relief package meant to help Americans cope with the outbreak. “We are proud to have reached an agreement with the Administration to resolve outstanding challenges, and now will soon pass the Families First Coronavirus Response Act,” Pelosi said in a [statement]( Friday evening. Hours earlier, Trump had indicated he did not yet support the deal. “We don’t think the Democrats are giving enough,” he said from the White House Rose Garden. Yet even as he was speaking, Pelosi and Treasury Secretary Steven Mnuchin were holding their 10th and 11th calls of the day. The negotiated package is focused on providing for free testing for everyone who needs it, including the uninsured, and also includes provisions for paid sick leave, enhanced unemployment insurance, strengthened nutritional security programs like food stamps and increased federal funding for Medicaid, according to Pelosi. “The three most important parts of this bill are testing, testing, testing,” the speaker said Friday. Democrats had said throughout the day that they would push ahead with a vote on the revised package, with or without support from the administration and House Republicans. "I know how frustrating the past 48 hours have been. The Speaker has literally been working around the clock to achieve a bipartisan agreement on our further response to the crisis caused by the Coronavirus pandemic," House Majority Leader Steny Hoyer wrote in a letter to colleagues. "If we reach agreement, we'll vote on it. If not, we will vote today on our bill, which incorporates nearly all of what the Administration and Republicans have requested." What Trump’s emergency declaration means: The president said his emergency declaration would allow for up to $50 billion in aid to flow to state and local governments. It will enable the administration to tap the $42.6 billion in FEMA’s Disaster Relief Fund to help address the damage from the spread of the virus and enables states to request that the federal government cover 75% of emergency expenses, including workers, tests and supplies. Trump also: - Discussed a [newly announced partnership]( with the private sector to expand and speed testing for the virus, with widespread drive-through testing and 1.4 million additional tests to be made available next week and 5 million within the next month. The administration had faced heated criticism from lawmakers in both parties about the problems with tests being available. - Said he was waiving interest on all student loans held by federal agencies. - Said the government would purchase crude oil to fill the nation’s strategic petroleum reserve. Trump reportedly had [resisted]( making the national emergency declaration earlier this week, despite pressure from local leaders and congressional Democrats. On Thursday, he told reporters that me may do it “at some point” before adding that the Unites States is “in great shape,” especially compared to other countries. “Part of Trump’s hesitation to declare a national emergency has seemed to be about saving face,” The Washington Post’s James Hohmann [suggested]( since the declaration would contradict the president’s previous messages downplaying the threat from the virus, comparing it to the seasonal flu and insisting that his administration had the outbreak under control. Administration officials had also disagreed whether an emergency declaration was necessary, with some — possibly including Trump himself— reportedly worried that such a move would trigger panic in the financial markets. Instead, major stock indexes surged Friday as Trump made the announcement, ending the day with their biggest one-day gains since October 2008. What’s next: If the House passes the relief package as expected Friday night, the Senate would take it up next week. But this was just the second in what’s likely to be a series of bills responding to the coronavirus pandemic. “As the Senate works to pass this bill, the House will begin work on a third emergency response package to protect the health, economic security and well-being of the American people,” Pelosi said. This may have been the easy part, too, as consensus on next steps may be even harder to achieve. Trump Still Pushing a Payroll Tax Cut Lawmakers may be cool to the idea of a payroll tax cut as part of the immediate response to the coronavirus outbreak, but President Trump continues to push the idea. On Friday morning he [tweeted]( “If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31. Then you are doing something that is really meaningful. Only that will make a big difference!” Quote of the Day "The onus for saving the economy from recession is now squarely on the Trump administration and Congress to provide a large, timely and well thought out fiscal stimulus." – Mark Zandi, chief economist at Moody's Analytics, in an email to [Axios](. Asked how confident he is it would get done, Zandi said: "Not confident at all. Recession is more than likely." Chart of the Day The White House on Friday unveiled plans for a new effort to ramp up testing for Covid-19, which experts say is an essential part of limiting the spread of the virus. This chart from [Vox]( gives a sense of just how far the U.S. has to go to catch up to other countries that are dealing with the pandemic, including South Korea, the leading virus screener with 3,692 tests per million people. The U.S., by comparison, has done about 23 tests per million people as of March 12. Even Conservative Deficit Hawks Say Now Is the Time to Spend, Spend, Spend Bloomberg Businessweek’s Peter Coy emailed several preeminent conservative economists — the type who typically worry about large budget deficits and the rapidly rising national debt — to ask what the federal government should do to combat the economic effects of the virus. “Restraining the deficit was nowhere near the top of their list,” he writes. In fact, deficits are “good and necessary” at the moment. Here some of what the economists had to say: • “There are times to worry about increasing government debt. But a crisis like the current pandemic is not one of them,” said Harvard’s Gregory Mankiw, who chaired the Council of Economic Advisers under President George W. Bush. • Glenn Hubbard, a Columbia professor who also chaired the Council of Economic Advisers under Bush 43 said policymakers should focus on funding for health infrastructure and support for state Medicaid programs. And he recommended loan guarantees to affected industries. “While policy can’t offset the supply shock, it can make sure demand does not crater,” he told Businessweek. “Sending checks to low- and moderate-income individuals would be helpful and should be possible. ... A major infrastructure program commitment would reassure businesses about future demand — projects needn’t be ‘shovel ready’ for that to work. … While profligacy is not the goal, policy makers should prioritize reassurance over the near-term deficit.” • Harvard’s Kenneth Rogoff told Bloomberg TV that the U.S. needs $500 billion to $1 trillion in fiscal stimulus “for starters,” with much of that money directed at lower-income earners who would spend it quickly. “The perfect storm that creates these really disastrous financial crises,” he said, “often involves having a government at war with itself, caught on its back, very often before an election.” That last part sounds frighteningly familiar, doesn’t it? [Read the full piece at Bloomberg Businessweek.]( News - [Under Heavy Fire, Trump Administration Partners With Private Sector to Expand Coronavirus Testing]( – Washington Post - [The World Needs Trump to Save It From a Coronavirus-Induced Recession]( – Axios - [The U.S. May Already Be in a Recession, and It Could Linger Even After the COVID-19 Crisis Is Over]( – Washington Post - [Why the U.S. Is So Far Behind on Coronavirus Testing]( – Axios - [‘Not Good Enough’: How Rep. Katie Porter’s Relentless Questioning Led the CDC Chief to Commit to Free Coronavirus Testing]( – Washington Post - [White House Discussing Allowing Airlines to Keep Ticket Tax]( – Bloomberg - [Mnuchin Calls Coronavirus Pandemic 'a Great Investment Opportunity']( – Politico - [How COVID-19 Affects the U.S. Workforce, by Income and Industry]( – Bloomberg - [Singapore Was Ready for Covid-19—Other Countries, Take Note]( – Wired Views and Analysis - [Officials Have Spent the Last Few Years Dismantling Anti-Recession Measures]( – Catherine Rampell, Washington Post - [Congress, Go Big Before You Go Home]( – Washington Post Editorial Board - [It’s Time to Declare a National Emergency]( – New York Times Editorial Board - [Senate Republicans Sit Out the Coronavirus Crisis]( – Jonathan Bernstein, Bloomberg - [Congress Is Wrong About Trump’s Payroll Tax Cut]( – Karl W. Smith, Bloomberg - [On the 2008 Bailout, Biden Is Right and Sanders Is Wrong]( – Washington Post Editorial Board - [Six Reasons Why Trump’s Plan to Delay Tax Filing Won’t Help the Coronavirus Economy]( – Howard Gleckman, Tax Policy Center - [Medicaid Funding Boost for States Can’t Wait]( – Jennifer Sullivan, Center on Budget and Policy Priorities - [Germany's Black Zero Rule Really Does Look Dead]( – Marcus Ashworth, Bloomberg - [Using the EITC to Help Fight an Economic Slowdown]( – Elaine Maag, Tax Policy Center [Like Us on Facebook]( [Like Us on Facebook]( [Read Us On the Web]( [Read Us On the Web]( Copyright © 2020 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. Our mailing address is: The Fiscal Times 399 Park AvenueNew York, NY 10022 [Add us to your address book]( Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](.