Negotiations falter over $2tn US stimulus deal

US senators have not passed a motion to advance nearly $ 2 billion in fiscal stimulus to help America weather the coronavirus pandemic after Democrats in Congress said that ‘she had given the big companies an overly generous bailout.

Only 47 out of 100 senators voted in favor of the procedural motion when 60 were needed to move the bill forward.

The vote in the upper house of Congress on Sunday evening marked a setback for the chances of rapid passage. But negotiations between White House officials and congressional leaders on both sides continued, raising hopes that an agreement could still be reached in the next few hours.

“The legislation has had many, many problems,” said Chuck Schumer, the largest Democrat in the Senate, on Sunday afternoon.

“At the top of the list, it included a large corporate rescue provision, with no protection for workers and virtually no surveillance. It has also dramatically reduced the money our hospitals, cities, states, medical workers and so many others needed during this crisis, “said Schumer.

In an urgent attempt to limit the fallout from the coronavirus pandemic, which has shut down much of the global economy, Congress and the White House worked on an agreement to quickly provide direct government payments to American households and aid large and small businesses. But finding a deal has proven complicated, despite pressure from all parties to provide rapid assistance to the rapidly deteriorating US economy.

At a press conference on Sunday evening, Donald Trump, the President, said he was still optimistic about the potential for a deal. “I don’t think anyone really has a choice,” said Trump.

“Our goal is to relieve the Americans as quickly as possible,” he added.

The main features of the stimulus would be loans to small businesses so that they can keep their workers, which would be forgiven if it were used to keep their employees, and direct payments to American households, worth $ 3,000 for one family of four.

The most controversial element of the package – which the Democrats have opposed – provides up to $ 500 billion that could be used to save large companies affected by the coronavirus epidemic, in addition to $ 50 billion put in side to help the airline industry.

Democrats were seeking assurances that government-aided companies would not be able to buy back shares and restrict executive pay. They also objected to a provision proposed by the Republicans that would delay the disclosure of companies receiving state aid, claiming that it was a “secret rescue authority”.

“The general opinion is that they want to create a slush fund for giant companies. No help for employees and no help for hospitals, and that can’t be where we are, “said Elizabeth Warren, Massachusetts senator and former Democratic presidential candidate.

Finally, Democrats were unhappy that some non-profit organizations, such as mental health providers, rape survivors and family planning centers, were not eligible for loans to small businesses. .

But Mitch McConnell, the majority leader in the Senate and Republican of Kentucky, said it was time to overcome the last hurdles. “This national crisis will not wait if Congress retreats to conventional or market politics constantly on the most delicate points,” he said.

Earlier in the day, Steven Mnuchin, the US secretary of the Treasury, had noted that another element of the agreement would guarantee “broad-based” loans to the American economy via the Federal Reserve, which revived the tools used during the 2008 financial crisis to boost credit. Legislation is expected to provide funds through the US Department of Foreign Exchange Stabilization Fund to help support the Fed’s facilities.

“We will have up to $ 4 billion in cash that we can use to support the economy,” said the Secretary of the Treasury.

Economists predicted a dramatic slowdown in economic activity in the coming weeks, with Goldman Sachs predicting a 24% drop in US gross domestic product in the second quarter. This prompted the White House and Congress to consider an increasingly large stimulus package.

US lawmakers and administration officials were considering legislation worth about $ 800 billion less than a week ago, but the price has risen to almost $ 2 billion. Mnuchin said he expects the measures to work in the next 10 to 12 weeks, but additional budget support may be needed if the coronavirus crisis persists.

“If, for whatever reason, you know, in 10 weeks, this virus has not been won, we will return to Congress,” said the Secretary of the Treasury.

Even though they pushed for a more aggressive stimulus, Donald Trump and his senior officials continued to insist that the U.S. economy would rebound quickly once the threat of coronaviruses was overcome later in the year.

“When we get through this virus like I said, I think you’re going to see the US economy recover,” Mnuchin told Fox. “We have excellent businesses. We have excellent workers. What we need to do is have a bridge to get through this, and it is not the financial crisis that will last for years, ”he added.

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