As a sign of the magnitude of the coronavirus crisis in the United States, Congress is on the verge of adopting, on Wednesday, March 25, a massive and historic stimulus package to support the US economy. Senators and the White House have agreed on an unprecedented envelope of nearly $ 2,000 billion (€ 1.850 billion) to help businesses, workers and families.
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► What are the main provisions of the plan?
This text, vigorously supported by President Trump and elected officials, aims to protect private sector activity in the face of the coronavirus epidemic which is now paralyzing a large part of the United States. After California and New York, fifteen other states have asked their residents to stay at home – representing more than half of the American population.
Among the various measures of this massive plan are devices for employees (unemployment benefits), for households – direct aid for Americans up to $ 1,200 (€ 1,110) per adult, plus $ 500 (460 €) per child – as well as the equivalent of almost € 500 billion for businesses.
“We are working quickly to pass a new law that will provide major support to small businesses, affected industries and direct money to the great hard-working Americans and their families”, Donald Trump promised over the weekend at a White House press conference.
The text is expected to be voted on Wednesday March 25 before being quickly approved by the House of Representatives, then signed by the tenant of the White House.
► What stumbled over the debates?
It was only after long debates that the Senate finally approved this massive effort. The discussions were about modalities, not principles. The elected representatives of the democratic party, although minority in this room, have the means to prevent the adoption of a text: the republicans occupy 53 of the 100 seats, but the approval of a law supposes a majority of 60 votes in the Senate.
Elected Democrats believed that the original text presented “Very many problems”. They demanded in particular more counterparts from companies, scalded by the controversies that had erupted after federal support for Wall Street during the financial crisis of 2008. This plan “Would let the US treasury distribute hundreds of billions of dollars to businesses – including, potentially, those of President Trump – without requiring a commitment to preserve jobs and wages, Opined, Tuesday, March 24, the daily The New York Times. And these bailouts could remain secret for six months. “
According to initial reports, the Democrats ended up getting an inspector general appointed to supervise the use of a fund endowed with the equivalent of 500 billion euros. He will be assisted by a council of five persons designated by the Congress.
► What is the economic impact of coronavirus in the United States?
In the United States, where the pandemic affects 55,000 people and left 801 dead, according to the latest report from Johns Hopkins University, it is obvious that the economic impact of the health crisis will be considerable. In the absence of “shock absorbers” (social security, unemployment benefits, etc.), the country still reacts very strongly to economic downturns.
Even if the forecasts, in this context of great uncertainty, are very hypothetical, the last note from Morgan Stanley, published on Sunday March 22, caused a sensation: it evokes a contraction of the American economy by 30% during the second quarter of 2020 , and an unemployment rate around 13% at the end of spring – unheard of since the post-war period.
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Another important indicator is the New York Stock Exchange, which weighs heavily on the personal finances of American households, notably through pension funds. The coronavirus has put an abrupt end to the euphoria that has plagued the markets for several years. In just a few days, the fall was spectacular: before rebounding with the announcement of the recovery plan, the Dow Jones index had plunged by more than 30%, dropping to its level at the end of 2016, ie at the end of the Obama years .