It’s not clear how such relief deferring taxes to the travel and hospitality sectors would be administered or whether President Trump’s own hotels could be beneficiaries. And administration officials disagree on the extent to which some of these measures could be done without Congress.
On Friday, White House economic adviser Larry Kudlow confirmed the administration is considering “timely and targeted” federal interventions to help workers, firms and industries hurt by the coronavirus, as fears mount over the growing economic impact of the spreading outbreak in the U.S.
Kudlow’s comments were the most definitive public admission from the White House that companies that have been adversely impacted by the coronavirus.
Speaking on CNBC and Fox Business, Kudlow rejected suggestions of a larger stimulus package in part because he claimed that the virus is largely “contained” and the U.S. economy remains strong.
“Perhaps on a large scale, some of the sectors might need some temporary assistance,” Kudlow said on Fox Business. But he stressed that “we don’t want to act prematurely.”
But Kudlow said the U.S. government may provide help to certain sectors, such as the hospitality and airline industries. The federal government may also step in and help people in certain parts of the country forced to stay at home because of coronavirus, as well as small business who may need “cash flow” help amid the outbreak, according to Kudlow.
The Dow Jones industrial average initially fell more than 700 points on Friday amid a turbulent week, but markets rebounded as Kudlow spoke on television.
“What we are looking at…is a timely and targeted micro approach,” Kudlow told Fox Business Network’s Stuart Varney. He added Treasury Secretary Steven Mnuchin and the National Economic Council are in touch with President Trump about potential responses. “We want targeted, in a timely fashion, for those areas that have been hit the worst.”
Kudlow didn’t specify what types of assistance the government could offer. The funding bill for coronavirus response signed Friday by Trump includes $7 billion in loans for the Small Business Administration. Congress may need to approve an additional emergency bill with further measures to boost the economy, according to one senior congressional aide speaking on the condition of anonymity to discuss internal planning.
The U.S. economy posted strong jobs numbers of Friday, with the unemployment rate falling again despite fears of the coronavirus’ spread. But the report reflected the economy’s performance in February, largely before fears of the coronavirus hit the U.S. The U.S. stock market fluctuated again on Friday despite the strong jobs report as the number of coronavirus cases rose above 100,000 worldwide.
“People who may be stranded at home and will lose pay, we want to help them,” Kudlow said on Fox Business. On small businesses, “we may wish to help them with some cash flow.” Kudlow also said larger companies might need some short-term relief: “Perhaps on a large scale, some of the sectors might need some temporary assistance … We don’t want to act prematurely.”
White House officials, including Kudlow, have been accused of trying to minimize the danger of coronavirus to stabilize the markets and the economy.
Some experts, such as Obama administration economist Jason Furman, have called for wider rebate payments to boost the economy. Kudlow rejected that approach.
“I don’t think we should be … throwing cash in these short-term rebate kind of models that have never worked in the past,” Kudlow said.
He added on CNBC: “I would still argue to you that this thing is contained.”