White House seeking $850 bn stimulus package

US President Donald Trump will ask Congress to approve a massive $850 billion emergency spending package to contain the growing economic damage from the coronavirus pandemic, according to media reports Tuesday.

The measures are expected to include a payroll tax cut and $50 billion in aid to troubled US airlines hit hard by the near-total shutdown in the travel industry, The Washington Post reported, citing four officials familiar with the matter.

The package, which is in addition to the $100 billion in spending directed at paid sick leave and expanded unemployment benefits already moving through Congress, surpasses the $700 billion emergency program known as TARP to save the banking system during the 2008 global financial crisis.

Treasury Secretary Steven Mnuchin is expected to present the proposal to Senate Republicans, the Post reported.

Republican leaders last week dismissed the Democratic package in the house as an inflated wish list of items. And since then the damage has accelerated with businesses forced to close and whole states under lockdown.

Trump has been pushing for a cut or suspension of taxes deducted from all American paychecks at least through the November presidential election.

But Democrats and many economists say focus on payroll taxes misses workers who are laid off, unemployed or are paid hourly.

Most economists agree the crisis calls for a massive response to flood the economy with cash to keep households and businesses afloat.

The Federal Reserve has slashed the benchmark lending rate to zero, where it was during the 2009 global financial crisis.

It has taken extraordinary steps to ensure the financial system has plenty of cash to keep it from locking up, but Fed Chair Jerome Powell said a fiscal response will be “critical.”