Treasury Secretary Steven Mnuchin’s $1 trillion economic stimulus plan would provide sweeping support for the economy with the bulk of funds going to direct payments to taxpayers and small-business loans.
But the proposal obtained by CQ Roll Call also includes support for not only airlines but other “severely distressed sectors” of the economy, as well as support for money market mutual funds.
The largest portion of the package is $500 billion for two rounds of direct payments to individual taxpayers, with the first round of checks issued beginning April 6 and the second round beginning May 18. The payments would be fixed and tiered based on income level and family size, the plan says.
“Treasury is modeling specific options” for the tiering of the payments, the document says.
Each round of payments would be identical in amount.
The next largest component in the plan is the creation of a small-business interruption loan program funded by an appropriation of $300 billion. The government would provide a 100 percent guarantee on any qualifying loan.
Employers with 500 employees or less would be eligible for the program, under which loans would be provided by U.S. financial institutions.
The loan amounts would be 100 percent of six weeks of payroll, capped at $1,540 per week, per employee. Under the plan, the employer would have to sustain compensation for all employees for eight weeks from when the loan is disbursed.
In addition to $50 billion in aid to the airline industry, the proposal includes $150 billion in aid to “other critical sectors of the U.S. economy experiencing severe financial distress” due to the outbreak.
The airline provision would appropriate an additional $50 billion to the Exchange Stabilization Fund and authorize the funds to be used to lend to U.S. passenger and cargo carriers, with the Treasury Department determining the interest rate, other terms and conditions, and specifying the collateral for the loans. In order to qualify, airlines would have to continue providing service and limit increases in executive compensation until the loans are repaid.
The proposal also includes temporary use of the Exchange Stabilization Fund to guarantee money market mutual funds. It would suspend the statutory limitation on using the exchange fund for such guarantee programs, with the authority terminating upon the end of the national emergency that President Donald Trump declared on March 13.
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