MNI POLICY: US Senate Chair Not Ready To Back House Stimulus

By Evan Ryser

     WASHINGTON (MNI) - U.S. Senate Finance Committee Chair Chuck Grassley told

reporters Wednesday that even if the White House and Democrats in the House of

Representatives agree on fiscal stimulus he doesn't know if he would support it

without seeing further details. 

     "I don't know. We'll have to see what's in it," he said. Any stimulus

package passed by the House without White House support is unlikely to receive

support in the Senate, he said. Grassley spoke just before President Donald

Trump said he will address the nation about the COVID-19 outbreak at 9pm

Washington time. 

     Speaker Nancy Pelosi is set to unveil legislation Wednesday to provide

protections for Americans and support the economy that could come to a vote

Thursday, leaving little time for the Senate to pass it before a scheduled

recess. Grassley said he will look at any package based on the "economic good it

does," but would not comment on individual proposals that Democratic leaders

have suggested.

     Some of those ideas may run counter to Republican fiscal hawks in an

election year. They include expanded unemployment insurance, paid sick days,

loan payment relief, disaster relief programs, new Small Business Administration

grants, rental assistance, expanded food aid. 

     "If you are going to negotiate in good faith, you are going to listen to

everybody and pick out things that you think are going to help the economy over

a hump," Grassley said, while also suggesting he too sees the need for fast

stimulus as Treasury Secretary Steven Mnuchin called for earlier Wednesday.  

     "The best way for any of these questions about what we might do - if we

have a bad economy and we don't have a bad economy yet from the virus, and we

could have - we just want to be ahead of the curve," the Republican said. 

     Investors have driven Treasury bond yields to record lows in recent days on

signs the coronavirus will trigger a global recession. Organizations like the

IMF and OECD have said strong government action including fiscal support for

health plans and workers could have a powerful effect in supporting economies,

and more effective than further interest-rate cuts. 

     Mnuchin said a package could come in the next 24 to 48 hours but he will be

coming back in the coming weeks. Mnuchin also said he was asking President Trump

to delay April 15 tax filing to offer stimulus of USD$200 billion.

     Asked about supporting specific industries, Grassley said: The coronavirus

is "affecting the whole economy. Everything is on the table."

     Grassley said decisions about targeting other tax cuts has not been made

yet and that "would be down the road two or three weeks or two or three months

depending on what the economy does."

     He said a payroll tax cut is on the table, and "it is something that at

least has bipartisan support because it was used during the Obama

administration."

     While a number of Democrats on the House Ways and Means Committee have

urged the Trump administration to reduce tariff levels to help ease business

conditions, Grassley dismissed the idea. "In order for it to do any good

wouldn't it have to be reciprocal? If we reduce tariffs wouldn't China have to

reduce tariffs too?"

     Grassley said he hasn't had any personal discussions with anyone in the

Trump administration about acting to lower tariffs, but noted that Trump could

do it unilaterally.

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

[TOPICS: M$U$$$,MC$$$$,MI$$$$,MT$$$$,MFU$$$,MGU$$$]