Trump pitches tax cut to ease panic

President Trump on Monday took his biggest step to address the economic fallout of the coronavirus, saying he will ask Congress to approve a payroll tax cut and relief for hourly workers.

Trump called for the tax cut during an appearance at the White House briefing room, where Vice President Pence tried to reassure the public that the risk for the average person remains low.

Fears that coronavirus represents a major threat to both public health and the economy grew dramatically Monday amid school closures, lawmakers quarantining themselves and a growing number of U.S. cases.

Administration officials, including Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow, are expected to meet with Republican lawmakers on Tuesday to discuss the potential stimulus measures, Trump said. Small-business loans are among the options also being considered as part of an economic relief package, he added.

Trump also said he would be asking the Small Business Administration to issue loans and that the administration was working with airlines, and the hotel and cruise industries, which have been hit hard by the spread of the virus.

Economists have warned that policymakers must take action to stimulate the economy, fend off job losses and protect small and midsize businesses to avoid a recession.

Trump has downplayed the threat of the coronavirus to the economy and tried to blame the media and Democrats for stoking fears. He insisted Monday evening that the U.S. economy was strong even as he announced the new steps.

“We have a very strong economy,” Trump told reporters. “But this has blindsided the world.”

Escalating panic about the coronavirus spread beyond Wall Street on Monday. Several lawmakers on Capitol Hill quarantined themselves in an effort to prevent the virus’s spread.

The outbreak represents the biggest crisis yet for Trump, who earlier on Monday had downplayed the impact of the outbreak — which looks like a real threat to his reelection prospects.

Health officials are now moving away from their previous containment strategy to one of mitigation, seeking to slow an outbreak that has already hit multiple areas in the U.S.

The new steps include warnings for people who are most vulnerable, meaning people over 60 and those with underlying health conditions, to take steps to protect themselves.

The Centers for Disease Control and Prevention (CDC) said at-risk groups should stock up on supplies and avoid “crowded places” and “non-essential travel such as long plane trips.”

And while many experts downplayed the need for drastic steps like mandatory limits on travel within the United States, similar to the steps Italy took on Monday, some officials did not totally rule out those possibilities.

“We’re past the point of containment,” former Food and Drug Administration Commissioner Scott Gottlieb said Sunday on CBS’s “Face the Nation.” “We have to implement broad mitigation strategies. The next two weeks are really going to change the complexion in this country. We’ll get through this, but it’s going to be a hard period.”

Gottlieb said some cities will have to “shut down their economy” to slow the spread of the virus, meaning “close businesses, close large gatherings, close theaters, cancel events.”

Adding to the crisis, the Dow Jones Industrial Average fell 7.8 percent — the worst trading day since the depths of the Great Recession in 2008 — as investors worry about the toll the virus will take on the U.S. and global economy.

Economists earlier this month were already predicting little to no growth in the second quarter of the year. That was before the recent declines in the market and cutbacks in travel and tourism.

A slowing or stagnant economy would prove to be a major setback for Trump as he seeks a second term. An economy in recession could prove insurmountable for his reelection prospects.

The virus is also hitting close to home for Congress. About a half-dozen lawmakers have announced they would self-quarantine after coming into contact with someone with the virus. Rep. Matt Gaetz (R-Fla.) and Sen. Ted Cruz (R-Texas) both cited contact with someone who tested positive at the Conservative Political Action Conference late last month in Maryland.

There are now more than 600 confirmed cases of the coronavirus in the United States, according to Johns Hopkins University, including outbreaks in California, New York and Washington state, which holds its primary on Tuesday.

Trump, meanwhile, lashed out at the media on Twitter and tried to downplay the threat of the virus.

“The Fake News Media and their partner, the Democrat Party, is doing everything within its semi-considerable power (it used to be greater!) to inflame the CoronaVirus situation, far beyond what the facts would warrant,” Trump tweeted on Monday. “Surgeon General, ‘The risk is low to the average American.’ ”

Dr. Nancy Messonnier, a top official at the CDC, warned that the virus is spreading.

“As the trajectory of the outbreak continues, many people in the U.S. will at some point in time this year or next be exposed to this virus, and there’s a good chance many will become sick,” Messonnier said on a call with reporters on Monday.

Experts note that about 80 percent of people who get the virus do not need hospitalization, meaning the risk is greatest for older people and those with underlying conditions.

As the number of cases grows, experts said the goal of the new “mitigation” strategy is to slow down the spread of the virus so that cases are a gradual curve instead of a spike. A large spike in cases poses a particular danger because it could overwhelm hospitals in certain areas, which could run out of beds and supplies to care for too large an influx.

Slowing the spread also allows more time for researchers to work on treatments and vaccines.

Dr. Anthony Fauci, a top official at the National Institutes of Health, was asked on Fox News Sunday about the possibility of locking down whole parts of the country to try to stop the spread of the virus.

He did not rule out the idea, saying it’s “possible.”

“I don’t think it would be as draconian as nobody in, nobody out,” Fauci said, adding that there could be smaller but significant steps like keeping people out of crowded places and asking: “Do you really need to travel?”

Dr. Georges Benjamin, executive director of the American Public Health Association, said that in the United States, voluntary restrictions would work better, especially if people are educated about why they are needed.

“This is not China,” he said, arguing that extreme measures “will not work in the United States.”

Dr. William Schaffner, an infectious disease expert at Vanderbilt University, said China has “a different governmental structure and a different culture among the population.”

He predicted that in the United States “there may be guidelines, they may be voiced very assertively, but they’ll be guidelines.”

Adding to the mitigation measures, New York City Mayor Bill de Blasio (D) on Monday asked employers to allow workers to work from home if they can.

New York on Monday announced that the number of cases in the state had risen to more than 140, one of the highest levels in the country.

Jennifer Nuzzo, a public health expert at the Johns Hopkins Center for Health Security, said many more people are likely to get the virus, and the focus should be on protecting high-risk places like nursing homes by limiting visitors and getting more infection-control resources to employees.

The Trump administration has come under widespread criticism for a slow rollout of tests to identify coronavirus cases.

But while experts said that bumpy response hindered efforts, they also said it was inevitable that the virus was going to spread across the United States, given how transmissible it is.

Schaffner said anyone who is an expert “anticipated that this respiratory virus that spread as readily as coronavirus was going to get through our defenses and cause widespread infection.”

“The trick was could we postpone that for a period of time so we can get our preparations in place?” he added. “And can we diminish its impact?”

Tags Bill de Blasio Coronavirus Donald Trump Larry Kudlow Matt Gaetz Steven Mnuchin tax cuts Ted Cruz

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