$1 trillion rescue plan; tax filing deadline moved to July 15

Senate Democrats and Republicans negotiate to draft an economic rescue package to support the U.S. economy amid the pandemic – one of the most urgent legislative undertakings since the 2008 financial crisis. White House announces new July 15 tax filing deadline.

First Look

Members of President Donald Trump's economic team convene Friday on Capitol Hill to launch negotiations with Senate Republicans and Democrats racing to draft a $1 trillion-plus economic rescue package amid the coronavirus outbreak.

It's the biggest effort yet to shore up households and the United States economy as the pandemic and its nationwide shutdown hurtles the country toward a likely recession.

Senate Majority Leader Mitch McConnell unveiled the Republican opening offer to pump $1,200 direct checks to taxpayers, $300 billion for small businesses to keep idled workers on payroll, and $208 billion in loans to airlines and other industries.

The GOP leader's effort builds on Mr. Trump's request for Congress to "go big."

"We need to take bold and swift action as soon as possible," Mr. McConnell said Thursday, announcing his plan on the Senate floor.

The 247-page McConnell CARES Act puts the leader's imprint on opening talks with Democrats in Congress as lawmakers prepare to work through the weekend to fast-track perhaps the most urgent legislative undertaking since the 2008 financial crisis.

The negotiations are certain to encounter difficulties ahead, despite the pressure on Washington to act. Mr. Trump's Treasury Secretary Steven Mnuchin and economic adviser Larry Kudlow will meet behind closed doors with Senate leaders. Democrats say the Republican plan does not go far enough and some Senate Republicans object to certain provisions.

"We are beginning to review Senator McConnell's proposal and on first reading, it is not at all pro-worker and instead puts corporations way ahead of workers," said a joint statement from House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer.

The GOP leader's plan aims to shore up households, businesses, and the health care industry, which is bracing for an expected onslaught of patients falling ill from the virus that causes COVID-19.

The one-time $1,200 stipends would be sent to individuals – $2,400 for couples – phased out at income thresholds of $75,000 for individuals and $150,000 per couple. Additionally, there would be $500 payments for each child.

Additionally, the McConnell bill would provide $300 billion to small businesses, with loans that would eventually be forgiven for employers who use them to meet payroll expenses.

To shore up industry, Mr. McConnell's plan would provide $208 billion in loans and loan guarantees to distressed sectors, including $50 billion for commercial airlines, $8 billion for air cargo carriers, and $150 billion for other eligible businesses, but those loans would have to be paid back.

Businesses would also be allowed to defer payment of the 6.2% employer payroll tax.

The proposal also includes a specific provision to allow the Treasury secretary to "participate in the gains," through stock options or other financial instruments, of companies that receive federal aid.

At the same time, caring for the expected surge of sick Americans is a priority for Congress.

The McConnell proposal contains a raft of health care provisions – including permanent liability protection for the manufacturers of respirators and other desperately needed medical gear to handle the pandemic.

At the consumer level, Mr. McConnell's bill would put into federal law the commitment from insurers that coronavirus tests will be cost-free to policy holders. Additionally, the bill requires coverage of coronavirus vaccines, at no cost to patients.

For the health care industry, the bill would establish a new Medicare payment for treating COVID-19 patients. It would suspend through the end of this year a 2% Medicare payment cut to providers under previously set budget restraints.

Ms. Pelosi and Mr. Schumer said in statement they looked forward to working with Republicans "in a bipartisan way to deliver for the American people as soon as humanly possible."

The Democratic leaders said, however, their priority is to "make sure all workers are protected from the loss of a paycheck or that no family falls into financial ruin because of this pandemic."

The Democratic leaders called on Mr. Trump to ramp up production of medical supplies and rapidly erect temporary field hospitals under new authorities he has invoked in the Defense Production Act.

Keeping paychecks flowing for idled workers as jobless claims skyrocket is a top priority for both Republican and Democratic plans emerging from Congress.

But how best to send direct payments to Americans – as one-time stipends, ongoing payroll support, or unemployment checks – is a crucial debate.

Democrats have other ideas for ushering aid to Americans by pushing more money into the existing unemployment insurance system. Mr. Schumer called it "employment insurance" – which he characterized as "unemployment insurance on steroids."

Some GOP senators panned the idea of direct one-time checks, preferring instead to use the federal dollars to keep workers who are asked to stay home on business payrolls.

"What I want is income, not one check," said Sen. Lindsey Graham, R-S.C.

Meanwhile, industries of all kinds are lining up for help. The total price tag is sure to grow beyond $1 trillion, lawmakers said.

Mr. Trump has already signed into law a $100 billion-plus bill to boost testing for the coronavirus and guarantee paid sick leave for millions of workers hit by it. Earlier, Mr. Trump signed an initial $8.3 billion package from Congress.

Income tax filing date moved to July 15

The income tax filing date has been pushed back from April 15, to July 15, Treasury Secretary Steven Mnuchin said. 

Mr. Mnuchin announced the decision in a tweet Friday saying that at Mr. Trump's direction "we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties."

At a White House briefing, Mr. Trump said the delay on filing and paying taxes until July 15 was done to give taxpayers more time and "hopefully by that time, people will be getting back to their lives."

Mr. Trump said that if people are expecting refunds, they should go ahead and file now so that they can get their refunds from the IRS more quickly.

The administration had announced earlier in the week that it would delay the payments, a move that Mr. Mnuchin said would leave $300 billion in the economy at a critical time.

The administration used authority under Mr. Trump's national emergency declaration. The delay is available to people who owe $1 million or less and corporations that owe $10 million or less.

It is expected that many states will follow the lead of the federal government and delay their tax filing deadlines as well but that will be a state by state decision. 

Mr. Mnuchin had said the payment delay could provide $300 billion in temporary support to the economy by giving households and businesses the ability to use money they would have paid to the IRS as financial support to meet other needs during the economic emergency created by the efforts to contain the coronavirus.

This story was reported by The Associated Press. AP writers Darlene Superville, Matthew Daly, Mary Clare Jalonick, Ricardo Alonso-Zaldivar, and Padmananda Rama in Washington contributed to this report.

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