“A LOT OF THIS DEPENDS ON THE VIRUS”
by Sharon Rondeau
(Mar. 29, 2020) — National Economic Council Director Larry Kudlow told Maria Bartiromo on “Sunday Morning Futures” that a variety of factors are being examined by the White House in considering when to reopen the U.S. economy for business in the wake of the coronavirus pandemic but that much “depends on the virus” itself.
“All the economic assistance packages, $6.2 trillion, as you know, were given – we’re going to give direct assistance to 175 million people to the tune of $600 billion…” Kudlow said as a result of Congress’s passage of the $2.2 trillion CARES Act on Friday.
The administration foresees that a total of $6.2 trillion will be spent in reviving the American economy, which has been largely shuttered to avoid the spread of the virus which has claimed more than 2,000 lives in recent weeks.
“We’re going to be looking at all kinds of data and testing and hospital capacity and the delivery of all the medical devices and ventilators; that will all go into the calculation, but I gotta say the president has always said, continues to say, that the health and safety of the American people comes first, and I don’t think we will be able to map as truly strong [an] economy again,” Kudlow further told Bartiromo. “I mean, I think we will come back strong, but a lot of this depends on the virus…”
He described the latest legislation, the third bill aimed at coronavirus relief, as “the greatest main-street, middle-class financial assistance package in the history of this country to get folks through this period.”
More than 3.28 million Americans filed for unemployment compensation last week, Bartiromo commented, then asked how the relief bill, which will generate money to American workers in approximately three weeks, will assist those individuals.
“The direct-tax rebates will go out,” Kudlow responded. “That goes to the 175 million Americans…that will come in a couple of weeks. That is a bridge to the unemployment compensation…” At the same time, Kudlow said, the “small business assistance plan” will open on Friday to provide businesses with cash with which to “keep folks on their payroll.”
A provision of that portion of the CARES Act is that the “loans” to small businesses will be forgiven if they continue to pay employees and/or rehire furloughed employees.
He added that “sick leave” and those directly impacted by the virus will also assist Americans, a provision contained in an $8.3 billion bill Trump signed on March 6.
Regarding Bartiromo’s question as to the efficacy of a provision of the CARES Act which reportedly will provide more money to some unemployed workers each week than they were earning while working, Kudlow responded, “Well, look, some of my friends in the Senate and House have said that to me. First of all, right now, with this pandemic, we have to do whatever it takes to keep people going…just daily living expenses and so forth. Point #2: we did plus up the unemployment insurance; now, remember, there’s federal, but it’s state. So the complaint that it’s paying more — some states get more; some states get less. The package is designed for four months, Maria…But it is not something that’s going to go on for years.”
“We are dependent on the state of the virus and whether it’s flattening out and going to hook down…This is a matter of weeks and months, not years, and prayerfully, this will be a matter of weeks. That’s what our great hope is,” he added.
Bartiromo asked if the federal government will become a “shareholder” in the airlines, as Treasury Secretary Steven Mnuchin suggested on her show last week for “national security” reasons. “Are you going to be taking equity stakes in more than just the airlines, and that’s long-term, right? If the government’s going to be a shareholder, is the government going to be an activist shareholder wanting to tell these companies how to run their businesses, Larry?” she asked.
“I don’t think we’ll be activists, but we are laying down some conditions, as I think you know: no stock buybacks, no executive compensation increases; things of that sort,” Kudlow responded. “But look, I think Secretary Mnuchin is right; I think the president is right; he made the same point. Either for economic security or national security, you cannot run a country with a vibrant economy like ours without the airline channels. You’ve got to have air channel; you’ve got to have trucking channels…”
When Bartiromo pressed him on whether or not the government should be a “shareholder,” Kudlow said, “I think in return for direct cash grants, which is what the airlines have asked for, I see no reason why the American taxpayer shouldn’t get a piece of the rock. You’re talking about warrants here, and I think we tried this before 10 or 12 years ago, and actually, the taxpayers made a good deal of money off these deals…We’ll wind up, hopefully…in our strong economy, don’t forget, free-enterprise incentives — it seems like a million years ago, but low taxes and low regulations and energy independence and better trade deals — we were set for a tremendous growth rate this year. And so now the virus comes down, OK, and so everything stops, but we will continue, and I think we will come out the other side in a very strong job-gaining, profitable economy.”
“Larry, you’re doing a great job, and I know you’re working hard for the American people. Thanks so much,” Bartiromo concluded the interview.