President Trump said Sunday night that he is considering a second round of direct payments to Americans to offset the economic impact of the coronavirus pandemic.
“I like the concept of it,” Trump said at his daily White House press briefing on the coronavirus. “I like money going directly to people. It’s not their fault that this happened.”
Most Americans are set to receive direct payments as part of a $2.2 trillion stimulus package signed into law by President Trump. House Speaker Nancy Pelosi is also reportedly moving to put together another bill to provide Americans more cash.
Trump said the White House is looking at “a different way of doing it” from what Pelosi is proposing, adding that his administration is on target to deliver the first federal payments to families in “a couple of weeks.”
Under the bill passed by Congress, individuals are eligible for payments up to $1,200, but that amount declines for those with an adjusted gross income higher than $75,000 a year. The $1,200 payment drops by 5% of every dollar above $75,000, or $50 for every $1,000.
The benefit doesn’t apply for individuals with incomes over $99,000.
Married couples with combined incomes up to $150,000 would receive $2,400, subject to the same phaseout that applies to individuals. The payments would be phased out entirely for couples making $198,000 or more. Families also get $500 per dependent child under the age of 16.
About 120 million U.S. taxpayers will qualify for direct payments from the federal government under the bill, according to an analysis by one think tank.
Unemployment is expected to soar to 15% during the second quarter of the year, while the U.S. gross domestic product (GDP) is set to plunge by 34% as the coronavirus slams the nation’s economy, according to a forecast by Goldman Sachs released on Tuesday.
The new forecast, titled “The Sudden Stop: A Deeper Trough, A Bigger Rebound,” was published on Monday and says it is “making further significant adjustments to our GDP and employment estimates. We now forecast real GDP growth of -9 percent in Q1 and -34 percent in Q2 … (vs. -6 percent and -24 percent previously) and see the unemployment rate rising to 15 percent by midyear (vs. 9 percent previously).”
The investment bank’s previous report, headlined “A Sudden Stop for the U.S. Economy,” had predicted only a 24% drop in the GDP for the second quarter (which includes April, May and June). That report predicted the unemployment rate jumping to 9%.
“This not only means deeper negatives in the very near term but also raises the specter of more adverse second-round effects on income and spending a bit further down the road,” the Goldman Sachs analysis noted.
The unemployment rate skyrocketed, with a record-setting 3.3 million initial jobless claims for the week ending March 21, nearly five times the highest on record. For the week ending March 28, 6.6 million workers filed for their first week of unemployment benefits, according to the Department of Labor, setting another record.
But the latest forecast offered a glimmer of hope, predicting a “V-shape” recovery in which the plunge will be followed by a spike. “Our estimates imply that a bit more than half of the near-term output decline is made up by year end and that real GDP falls 6.2% in 2020 on an annual-average basis (vs. 3.7% in our previous forecast),” the forecast said.
Goldman Sachs also said the $2.2 trillion economic relief package passed by Congress last week should help alleviate longer-term problems. “Both monetary and fiscal policy are easing dramatically further, which will tend to contain these second-round effects and add to growth down the road,” the said.