Negotiations for a coronavirus stimulus package in the United States worth more than $ 1 trillion have stalled. Democrats in the U.S. Senate blocked the lead package from Republicans on Sunday evening (local time) during a procedural vote. Although both sides have been negotiating the details of the package since Friday, there are still major differences. Republicans and Treasury Secretary Steven Mnuchin had actually expected the stimulus package to be adopted on Monday.
Leading Senate Democrat Chuck Schumer criticized that the Republicans’ proposal provided too much aid for certain industries and too little support for workers, hospitals and states. However, he was confident that the differences could be resolved within the next 24 hours. “We can and we should. The country demands it, ”said Schumer. Republican majority leader Mitch McConnell accused the Democrats of pursuing party policies despite the nationwide corona crisis in the United States.
It was initially unclear on Sunday evening how the negotiations would now go on. The exact scope of the stimulus package also seemed to be in flux – sums ranging from 1.4 trillion to 1.8 trillion were mentioned. A lot of it should be credit programs. In any case, it will probably be the largest stimulus package in recent US history – also more expensive than the emergency programs that were launched as a result of the global financial crisis in 2008/2009.
President Donald Trump was initially unimpressed by the delay. “Our stimulus package will go through. And it will be an enormous package, ”Trump said in the White House. After a vote in the Senate, the House of Representatives controlled by Democrats will also have to approve the package.
“We need the money now”
As part of the stimulus package, most taxpayers are to receive a check for $ 1,200, among other things, and an additional $ 500 per child. According to a proposal from the US Treasury Department, around $ 500 billion should be spent on such direct aid alone.
The stimulus package is also intended to help small and medium-sized companies with loans. In addition, around $ 100 billion should flow into the health care sector and unemployment benefits should improve significantly in the face of layoffs. Loans are also said to exist for large companies such as the aviation group Boeing.
Finance Minister Mnuchin emphasized that quick action is now needed to prevent an economic slump. “We need the money now,” Mnuchin emphasized. The exact extent of the economic upheaval of the coronavirus pandemic is not yet foreseeable. However, many analysts now fear a dramatic slump in the second quarter and a recession all year round. Initial data also suggests a rapid rise in the unemployment rate in many states, given the initial restrictions.
Trump has already signaled that he is also ready for further stimulus packages if the current one is not enough. The United States will vote in November and Trump is applying for re-election – a recession would be extremely inconvenient.
This month, Congress has already approved two smaller packages totaling over $ 100 billion to mitigate the effects of the Sars CoV-2 epidemic. There are now more than 30,000 known infections with the novel coronavirus in the United States. Around 400 people have died.