Senate closing in on higher price tag on coronavirus stimulus package

Larry Kudlow, the director of the National Economic Council, said on Saturday that negotiators were looking at a price tag of “around” $1.3 to $1.4 trillion and didn’t rule out that it could creep up further. 

“More or less,” he added, when asked about the $1.3 trillion figure. “We’re not quite through negotiating yet.” 

Kudlow and White House Director of Legislative Affairs Eric Ueland, who are on Capitol Hill as part of the negotiations happening with senators, said when the price tag for the bill is combined with money the Federal Reserve will spend to support the loans and other programs included in the legislation, it will have the total “impact” of more than $2 trillion. 

The $2 trillion figure reflects the “net impact of everything,” Ueland said. “There is a direct appropriations, which right now we’re talking over a trillion dollars … that in partnership with the Federal Reserve can bring much more significant fiscal heft.” 

Kudlow added that the Federal Reserve would likely put up approximately $700 billion as part of grants and loans authorized under the bill. 

The higher price tag comes as negotiators are trying to reach a deal “in principle” today on a massive stimulus package. 

Part of the higher price tag, according to Kudlow, includes an offer Republicans have made to include expanded unemployment insurance in the forthcoming legislation. 

Democrats want to beef up funding for the program amid concerns that jobless claims will soon spike as the spread of the coronavirus has forced businesses to restrict their activities or close altogether.  

The GOP proposal is expected to be an “integrated package,” according to Ueland, that would combine expanded unemployment insurance with the rebate checks favored by the administration. 

Lawmakers are under significant pressure to quickly pass massive legislation to try to reassure the markets and offer assistance to workers, small businesses and industries that have been impacted by the spread of the coronavirus.  

They also want stabilization funds that states could dip into as the economy worsens and want to fold in the administration’s $46 billion supplemental request.