The Treasury Department on Wednesday pitched the details of President Donald Trump's $1 trillion economic stimulus proposal to Congress, representing his top priorities for phase three of the federal government’s response to the new coronavirus pandemic.
The proposal, obtained Wednesday by ABC News, would authorize two $250 billion rounds of direct payments to individual taxpayers, with the first payment issued beginning on April 6. Another wave of payments would be distributed to taxpayers beginning on May 18.
“We are also playing with a lot of numbers, a lot of very big numbers and a lot of very small numbers, frankly,” Trump told reporters at the White House. “We have to help everybody. It was nobody's fault. This happened. I mean, some people could say it was somebody's fault, actually. But it was nobody's fault, and certainly none of these companies that all of a sudden had no passengers in planes and had no passengers on cruise ships, and all of the things that have happened, but I will say that they can't be blamed for this. And we want to keep those companies vibrant.”
The Senate is expected to pass a previous measure -- the Families First Coronavirus Response Act -- Wednesday afternoon, which represents the second phase of Congressional efforts to ease the impact of the pandemic, including free coronavirus testing for everyone who needs a test, paid emergency leave, expanded unemployment insurance, food security and increased funds for Medicaid.
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Once that bill is passed, Congress is expected to quickly craft a third wave of appropriations – which could include much of what the Treasury Department outlined Wednesday and previewed by Secretary Steve Mnuchin to Senate Republicans on Tuesday.
The proposal also calls for aid specifically for the airline industry, securing $50 billion of funds for secured lending to U.S. passenger and cargo air carriers. That money would be secured through collateral specified by the Treasury Department, which would also determine an interest rate, as well as other terms and conditions for the loans, including limitations on potential increases in executive compensation until the loans have been repaid.
It also calls for $150 billion for other “severely distressed sectors” of the U.S. economy, authorizing the use of those funds for secured lending or loan guarantees to assist other critical sectors, such as the cruise and hotel industries, “severe financial distress” due to the COVID-19 pandemic.
The proposal also calls on Congress to authorize a $300 billion small business interruption loan program, to provide continuity of employment through business interruptions during the crisis.
The U.S. government would provide a 100 percent guarantee on any qualifying small business interruption loan through U.S. financial institutions, according to the proposal, for employers with 500 employees or less.
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Borrowers would be required to demonstrate employer compensation that is sustained for all employees for eight weeks from the date the loan is disbursed. Lender must verify the previous 6-week payroll amount and that the borrower has paid eight weeks of payroll from the date the loan is disbursed.
Treasury also asks Congress to grant it authority to issue regulations establishing interest rate, loan maturity, and other relevant terms and conditions, and to temporarily suspend a statutory limitation on the use of the Exchange Stabilization Fund for guarantee programs for the U.S. money market mutual fund industry. the pitch calls on Congress to terminate authority to establish any new MMMF guarantee program upon the conclusion of the COVID-19 national emergency declared by the president on March 13.
President Trump signed the Coronavirus Preparedness and Response Supplemental Appropriations Act - a $8.3 billion emergency bill on March 6, and is expected to sign the $104 billion Families First Coronavirus Response Act as soon as the Senate approves the measure.