An emergency coronavirus relief package that the US government is preparing for businesses devastated by the pandemic calls for $4 trillion in aid, Treasury Secretary Steven Mnuchin said Sunday.
Under one component of the plan a “significant package working with the Federal Reserve will have up to $4 trillion of liquidity that we can use to support the economy,” Mnuchin told “Fox News Sunday.”
America is enduring its own big slice of the world upheaval that has seen businesses shut down en masse, workers laid off overnight, schools close and millions of people adjusting to life confined to their homes.
Under special circumstances the US central bank can go beyond its normal role of only lending to banks and provide funding for other companies, under so-called Article 13.3.
The secretary said that under “broad-based lending programs under Section 13.3, we can leverage our equity working with the Federal Reserve.”
Four trillion dollars is an extraordinary amount of money — about a quarter of US yearly GDP.
Entire sectors of the US economy have been stung by the effects of the Covid-19 pandemic, such as airlines and the cruise ship industry. But so have others like hotels and much of the entertainment sector, paralyzed as millions of Americans simply stay home out of fear — or under orders — over infection with coronavirus.
Mnuchin expressed optimism about prospects for a separate aid plan being negotiated by Republican and Democratic lawmakers and the administration of President Donald Trump.
“We look forward to wrapping it up today,” he said of the negotiating process.
He said he hoped the plan will be approved Monday because Americans who have been laid off or are otherwise suffering from this acute crisis need money right away.
This plan would provide companies with money to keep paying employees even if they have shut down for lack of business. He said half of all workers are somehow addressed by the package being negotiated on Capitol Hill.
“That will allow small businesses to keep people and make sure when we open the economy, they’re up and running,” Mnuchin said.
He said US households will get direct payments to keep them going — $1,000 per adult and $500 per child.
“The average direct deposit or check for a family of four will be approximately $3,000. You can think of this as a bridge for them to get through this quickly,” he said.
Added to this, he said, would be more than $100 billion for hospitals that are threatened with being overwhelmed by patients sick with the virus.