President Trump signed a $105 billion bill Wednesday night to provide paid sick leave from the COVID-19 pandemic while the administration forged ahead with a $1.3 trillion plan to help out-of-work Americans and to rescue the cratering economy, as stocks sustained another massive sell-off that halted trading briefly for the fourth time in two weeks.
The president signed the emergency legislation hours after the Senate approved the measure on a 90-8 vote.
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It provides free coronavirus testing, two weeks of paid sick and family leave, increased funding for Medicaid and food stamps, and increased unemployment insurance.
The deal also frees up the Senate to address what is likely to become one of the costliest emergency spending packages in history, to bail out industries shuttered by the pandemic and put cash into Americans’ pockets quickly.
The flurry of activity in Washington showed no signs of reassuring Wall Street. The Dow Jones Industrial Average fell 1,338 points, or 6.3%, to close at 19,898, although the index was down more than 2,000 points earlier in the day.
The S&P 500 fell 5.1% and at one point dropped more than 7% to trigger an automatic trading halt for the fourth time in two weeks. The tech-heavy Nasdaq plummeted 4.7%. Oil prices dropped 24% to an 18-year low on fears of the pandemic.
The New York Stock Exchange also announced Wednesday that it was closing its famed “pit,” temporarily suspending in-person trading and requiring all transactions to be electronic, starting Monday.
“The decision to temporarily close the trading floors represents a precautionary step to protect the health and well-being of employees and the floor community in response to COVID-19,” Intercontinental Exchange Inc., which runs the exchange, said in a statement.
Hoping to stem the rout in stocks, Treasury Secretary Steven T. Mnuchin scheduled an appearance on Fox Business Network with host Maria Bartiromo for Thursday morning before the markets were to open. He was expected to provide an update on negotiations for speeding up congressional action on the bailout plan.
As for the rest of the economy, President Trump said his administration’s proposed $1.3 trillion fiscal rescue package will “help everybody” in the country. It calls for two rounds of direct payments to most Americans, in April and May, based on their income.
“We have to help everybody,” Mr. Trump said at the White House. “It was nobody’s fault — certainly none of these companies that all of a sudden had no passengers, planes that had no passengers and cruise ships. They can’t be blamed for this. We want to keep those companies vibrant.”
The downturn was accelerating. Ford and General Motors announced they would close at least through the end of the month. Fiat Chrysler was expected to follow suit.
With the unemployment rate at 3.5% in February, Mr. Trump addressed a reported comment by Mr. Mnuchin in a private meeting with Senate Republicans that failure to enact the mammoth government rescue plan could risk a rise in unemployment to 20%.
“I don’t agree with that,” Mr. Trump said. “That’s an absolute, total, worst-case scenario. We’re nowhere near it.”
Under the administration’s proposal, checks of $1,000 or more would be sent to people around April 6 and again around May 18. The cost to the Treasury would be about $500 billion.
“We’ve talked about those numbers, and we’re also moving those numbers in both directions,” the president said, cautioning that no decisions had been made.
The Treasury Department said the cash payouts would be means-tested, meaning the amounts would be based on income level and family size.
Treasury’s written rescue plan calls for an airline industry bailout of $50 billion in secured loans to passenger and cargo carriers. Limits would be placed on executive pay increases until the loans are repaid.
Another $150 billion would go to other affected industries in secured loans or loan guarantees. This group would likely include hotels and cruise lines.
Bus companies also made a plea for help. The American Bus Association said its operators will likely lose $8 billion over the next five months as charter and tour bus business evaporates at their busiest time of the year.
The bailout plan also includes $300 billion for small-business interruption loans for companies with fewer than 500 employees. Recipients would have to keep paying all their employees for eight weeks from the date of the loan.
The government would guarantee 100% of payroll for six weeks, capped at $1,540 per week per employee.
The proposal has yet to gain the approval of Senate Republicans, much less House Democrats.
White House economic adviser Larry Kudlow, who acknowledged the rapidly shifting sands of the economic downturn, said the bailout package could still grow in cost.
“If it takes more than that, we will do more than that,” he said on Fox News. “During crises or wars, you have to sort of not worry about borrowing.”
David McIntosh, president of the Club for Growth, called it “a responsible plan to provide assistance to struggling industry by offering loans instead of blindly handing over billions in taxpayer dollars in government grants.”
Some were calling on the White House to take even more drastic action.
Bill Ackman, CEO of Pershing Square Capital Management, urged the president to shut down the country for 30 days to contain the coronavirus. He said it’s the only option to rescue the economy.
“What’s scaring the American people and corporate America now is the gradual rollout,” Mr. Ackman said on CNBC. “We need to shut it down now. … This is the only answer. America will end as we know it. I’m sorry to say so, unless we take this option.”
Mr. Trump held several conference calls and meetings with affected workers and businesses, including nurses. Vice President Mike Pence praised the health care providers for their service and said their safety is “in the forefront of the president’s mind.”
The president also held a call with the Business Roundtable, which represents major companies nationwide with 15 million workers. The group told Mr. Trump in a letter that the rescue plan will have “enormous costs,” but “failure to act boldly now will impose far greater costs to our country and our future.”
The Department of Housing and Urban Development on Wednesday authorized the Federal Housing Administration to freeze all foreclosures and evictions for single-family homeowners with FHA-insured mortgages for the next 60 days.
“Today’s actions will allow households who have an FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns,” said HUD Secretary Ben Carson.
Voting against the paid leave bill were eight Republicans: Sens. Marsha Blackburn of Tennessee, James M. Inhofe and James Lankford of Oklahoma, Ron Johnson of Wisconsin, Mike Lee of Utah, Rand Paul of Kentucky, Ben Sasse of Nebraska and Tim Scott of South Carolina.
Majority Leader Mitch McConnell, Kentucky Republican, acknowledged his colleagues’ concerns with the package but urged them to address those issues in the third, larger economic bill that lawmakers are still crafting.
“In this case, I do not believe we should let perfection be the enemy of something that will help even a subset of workers,” he said before the vote.