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White House urges small business rescue plan | Money

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The change comes after President Donald Trump’s Republican Party and Democrats both rejected, for different reasons, a beefed-up US$1.8 trillion (RM7.45 trillion) economic rescue plan proposed Friday. — Reuters pic

NEW YORK, Oct 12 — The White House yesterday changed tactics yet again on boosting the pandemic-hit US economy, this time urging lawmakers to back a plan to help small businesses weeks ahead of the presidential election.

The change comes after President Donald Trump’s Republican Party and Democrats both rejected, for different reasons, a beefed-up US$1.8 trillion (RM7.45 trillion) economic rescue plan proposed Friday.

In a letter yesterday to Congress, White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin urged backing for a bill allowing some US$130 billion in unused funds from a previous support plan to be redirected.

The money would be earmarked for businesses, particularly small and medium-sized companies, that are facing declining revenues while negotiations for more support drag on.

“Now is the time for us to come together and immediately vote on a bill to allow us to spend the unused Paycheck Protection Programme funds while we continue to work toward a comprehensive package,” the letter said.

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Not enough

It is unlikely that Democrats will accept the request with about three weeks left until the November 3 election and as Trump trails challenger Joe Biden badly in opinion polls.

House Speaker Nancy Pelosi, who is negotiating with the administration, has already rejected any idea of targeted measures, saying she wants broad economic support that she believes will boost activity.

The White House’s new strategy comes after a week in which Trump and his team had already switched tactics, jumping between cutting off talks, returning to the negotiating table and targeted measures — but without much success.

Markets tanked on Tuesday following Trump’s abrupt move to end stimulus talks, but he made an about-face in subsequent days that saw him calling for a deal.

The White House on Friday beefed up its offer, proposing a US$1.8 trillion package as Trump himself said that he favoured an even larger package.

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But the proposal was rejected on both sides.

Pelosi said the plan amounted to “one step forward, two steps back,” adding that the proposed sum was not enough.

Many Republican senators deemed Trump’s offer too generous. Republican Senate Majority Leader Mitch McConnell poured cold water on the chances for a deal Friday, saying Congress is unlikely to agree on a new stimulus package before the election due to differences over how much to spend.

But Trump’s economic advisor said yesterday that a new Covid-19 economic stimulus package proposed by the White House could still be passed, despite opposition from Democrats and some Republicans.

Asked if the proposed deal was dead, Larry Kudlow told CNN’s “State of the Union,” “No, I don’t think it’s dead at all.”

“We’re asking for some targeted areas of assistance that would help this recovery. It is a V-shaped recovery, but there are key areas that could help,” Kudlow said.

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The coronavirus has hit the US economy hard: nearly 11 million people are unemployed, and a total of 25 million people have seen their incomes drop and are relying on public aid.

Many small businesses are facing cash-flow problems that threaten their survival, while larger companies have started mass layoffs, a wave that experts agree will be difficult to control without a boost from the federal government. — AFP

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