Wednesday morning, Senators Mitch McConnell and Chuck Schumer announce a massive $2 trillion stimulus deal. It sets to be the biggest economic stimulus package in modern American history. As the nation faces the novel coronavirus outbreak.
“This is a wartime level of investment into our nation,” McConnell tells.
The deal is set to cover a range of far-reaching provisions. It includes everything from $1,200 government checks for individuals to hundreds of billions of dollars to fight the crisis.
The businesses which were showing some impact will get this provision. It is the contentious part of the negotiation.
The initial proposal from Senate Majority Leader Mitch McConnell was repeatedly banging down as a “$500 billion slush fund” by Democrats. Treasury Secretary Steven Mnuchin and fellow Republicans finally agree with a range of oversight measures for how companies will be able to spend the funds.
“Like all compromises, this bill is far from perfect, but we believe the legislation has improved significantly,” Senate Minority Leader Schumer states. As of early Wednesday, parts of the final bill were still in progress.
For Airlines a ‘Special Provision’
“We’re going to back the airlines 100%,” President Trump tells. The industry is hard-hit due to the coronavirus.
The deal covers $50 billion specifically for passenger airlines, $8 billion for cargo airlines. And $17 billion “for firms that are important to national security.”
On Tuesday, Reuters reports that the final negotiations on a package included a mix of grants and loans to these companies. Trump was signaling on Tuesday evening that the money would come in the form of loans.
“We’ll be helping Boeing, we’ll be helping the airlines,” Trump says. “We’ll be doing a lot of things and the money will all come back to us, and it will come back to us in a very strong form.”
Provisions to ban stock buybacks
A lot of that money will find its way into a range of publicly-traded companies. The deal covers provisions to stop these companies from using that capital for stock buybacks or executive bonuses.
“Every loan document will be public and made available to Congress very quickly so we can see where the money is going,” Schumer says. A condition for obtaining a government loan will be that a company cannot make stock buybacks for a year.
Overall, Washington is expecting that the deal will set the platform for a robust economic recovery. “If we get this package, we’ll be setting the stage for a good rebound in the second half of the year,” Larry Kudlow tells. He is the White House’s top economic adviser.