See bottom of email for analyst certification and important disclosures.
White House Coronavirus Package
There were several meetings on Capitol Hill today about the idea to have a coronavirus stimulus bill but at this point there is more uncertainty than agreement. Apparently when the President met with Senate Repubicans there were some reservations with the idea of payroll tax relief as the relief goes to people who haven’t lost their jobs. The Democrats and some Republicans are beginning to look at putting money into the state unemployment compensation funds to make claiming relief easier and quicker. The Democrats have proposed making the coronavirus test free for all, a plan I would expect to be adopted. More money for the Small Business Administration SBA is also something I am hearing talk about. Perhaps the biggest development of the day was word that the President has asked Secretary Mnuchin to work with Speaker Pelosi. Mnuchin and Pelosi negotiated the budget agreement which avoided a government shutdown last year. They apparently had a brief meeting this afternoon.
Timing: I believe this will move quickly and a possible target date is April 3 which is the day Congress is scheduled to leave for their spring break. I can’t imagine them going home without passing some coronavirus package.
As the press has been reporting there is an acknowledgement that the travel industry is going to need some help, but at this point there is no clear “ask” from the industry. Analysts agree that the airline industry is in strong financial shape, but that the cruise industry could face a real challenge. Like other industries strengthening unemployment payments could be an immediate help to travel industry workers who get laid-off. There has also been some criticism of the cruise line industry for not giving penalty free refunds, but only a penalty free rebooking option. Addressing this issue could be part of any industry relief.
As I wrote yesterday in my weekly note there seems to be a consensus that the package will be in the $300 billion and could go higher as Senate Republicans and House Democrats both insist on plans that they support. While there are a few budget hawks among Senate Republicans, President Trump has no real passion for limiting federal spending and just as he let Congress increase the initial coronavirus package from $2.5 billion to $8.5 billion I don’t think he will have a problem with a bidding up of the stimulus package. He needs the votes of workers in key swing states