Tuesday’s pivot toward a broad fiscal stimulus plan in the $1+ trillion range is a market-positive development, which was not a given at the beginning of this week. The package under discussion would provide Americans with a check of an amount to be determined as an initial boost for households and consumers.
Negotiations on this provision will focus on targeting the funds to certain income levels. We will be watching to see what income thresholds become the baseline in the coming days, or if other provisions such as refundable tax credits and expanded unemployment assistance are added to the direct payment section of the bill. President Trump, Secretary Mnuchin and Speaker Pelosi signaled agreement on the need for targeting in this respect on Tuesday. The broad agreement is a positive – the details will be the difficult part.
There appears to be broad agreement on boosting support for small businesses through loans via the Small Business Administration (SBA) and other relief in the amount of $250 billion. Support for the airline industry is currently projected to be in the $50 billion range and support for other businesses is also being discussed in the $50 billion range (with tax credit and net operating loss [NOL] carryforward provisions being discussed).
See below for a breakdown of Congressional relief measures that are currently active or in the negotiations stage.
Title: Coronavirus Preparedness and Response Supplemental Appropriations Act
Cost: $8.3 billion
Status: Law as of March 6
Title: Families First Coronavirus Response Act
Cost: $100 billion (estimated)
Status: Passed by the House on March 14; awaits Senate action
Cost: $800 billion to $1+ trillion (estimated)
Status: Negotiations ongoing, led by the Senate
Cost: $8+ billion (estimated)
Status: Still in the discussion phase; phase three response is the current priority
Source: Raymond James research
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