Senators and the White House reached an agreement early this morning on a roughly $2 trillion economic measure designed to protect the coronavirus-battered U.S. economy.
The legislation, which is still in the process of being finalized and expected to be enacted within days, would not only send direct payments and grant unemployment benefits to millions of Americans, it would also provide financial aid to states and businesses that have suffered amid the pandemic. If passed, it would become the largest fiscal stimulus package in modern U.S. history.
According to multiple reports, the deal would include $250 billion in checks to individuals and families, $250 billion in jobless insurance benefits, $350 billion in small business loans and $500 billion in loans for distressed companies. The details were negotiated after days of contentious talks between Treasury Secretary Steven Mnuchin and Senate Minority Leader Chuck Schumer, who led the discussions for Republicans and Democrats. Democratic negotiators had twice rejected the bill over concerns that it did not adequately protect workers and was imprecise on corporate bailout rules, among other issues.
Over the weekend, dozens of executives from the some of the largest American fashion brands and chains sent a letter to the Trump administration requesting a stimulus package that would help both big and small retail businesses. Widespread store closures across the country have left many retailers concerned over the severity of the coronavirus’s impact and what it could mean for the future of their companies.
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“Once the bill is passed and signed into law, we’ll have better line of sight as to what that entails,” Footwear Distributors and Retailers of America president and CEO Matt Priest told FN. “If that’s a safety net or a life preserver big enough to save you from the challenges you’re facing on the cash-flow side, then you may not have to make tough decisions on personnel or other things. If it’s not, then companies will be forced to make those decisions sooner rather than later.”
According to research from the National Retail Federation, which was among the organizations that penned the letter addressed to the Trump administration, the sector could see revenue declines of 20% or greater over a three-month period due to the outbreak, totaling an estimated loss of $429.9 billion in direct and indirect sales. If this decline in retail sales occurs, more than 1.7 million American jobs will be at risk.
“Of course, with the virus continuing to spread and economic damage being compounded, lost retail sales could climb much higher — between 50% and 80% in some sectors — with even more American jobs jeopardized,” the letter read. “Unless immediate steps are taken, these dire economic outcomes could persist for many years.”
The Federal Reserve has also taken additional measures to boost the economy: On Monday, it announced a major expansion of lending programs, including purchasing commercial mortgage-backed securities issued by government-supported entities as well as not limiting the purchase of Treasury and mortgage securities that it approved one week ago.
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