Law360 obtained the undated U.S. Department of the Treasury memo that outlines the administration's priorities for a package taking shape in the U.S. Senate meant to help businesses and workers survive the extended drop-off in economic activity along with two rounds of checks sent directly to individuals to stimulate spending. It would also allow the Treasury to use its Exchange Stabilization fund to insure money market mutual funds as it did during the 2008 financial crisis.
"We are closing down parts of the economy to make sure we destroy the disease," Treasury Secretary Steven Mnuchin said on CNBC. "At no fault of their own, we're telling people not to go to [many] businesses. And we're going to deliver assistance. … We're going to make sure that companies have money so they continue to pay those employees."
The document fleshes out what Mnuchin has said publicly about his priorities for the package, which would be the third bill before Congress in response to COVID-19.
The first came early this month when lawmakers approved $8.3 billion in public health funding. The second expanded sick leave for some workers, food assistance and free coronavirus testing after negotiations between Mnuchin and House Democrats. The Senate approved the bill Wednesday afternoon, sending it for President Donald Trump's signature.
Senate Majority Leader Mitch McConnell, R-Ky., has said he plans to keep the chamber in town until it approves the third bill. Sen. Susan Collins, R-Maine, told reporters Wednesday that she hoped it would pass over the weekend, setting up a final House vote early next week.
The Treasury memo seeks $200 billion for secured loans or loan guarantees to industries hit hard by the pandemic, with a quarter of that reserved for passenger and cargo air carriers, who would have to put up collateral and agree to continue a level of service while accepting limits on raises for executives until the companies repay the loans.
The loans will go to "businesses that will have great cash flow coming out of this but need loans now," Mnuchin said. "This U.S. economy is going to come roaring back once we conquer this disease. This isn't like the financial crisis. There will be an end in sight."
Another $300 billion would cover full federal guarantees for private loans to small businesses with up to 500 employees. The "business interruption loan program" would cover up to six weeks of total payroll expenses, with a maximum of $1,540 per employee per week. Companies that take the loans would have to keep paying all employees for at least eight weeks after receiving the loans.
Half of the $1 trillion total would go to checks sent directly to individuals, with some means-testing and adjustment for income and family size. The memo envisions the Internal Revenue Service sending out two equal checks during the weeks of April 6 and May 18.
The Treasury also sought the authority to insure money market mutual funds for as long as the president's coronavirus emergency declaration remains in effect.
McConnell said Tuesday that he has Senate Republicans working on three task forces to collaborate with the administration and develop a draft bill before negotiating with Democrats.
On Wednesday, McConnell identified the three chairmen overseeing those efforts: Finance Committee Chairman Chuck Grassley, R-Iowa; Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn.; and Commerce Committee Chairman Roger Wicker, R-Miss.
Senate Minority Leader Chuck Schumer, D-N.Y., decried that process in a speech Wednesday on the Senate floor. He had distributed an early set of Democratic proposals a day earlier and described their priorities as "public health capacity, unemployment insurance, and paid sick leave and priority treatment for labor in any bailout to industry."
House Speaker Nancy Pelosi, D-Calif., said in a statement Wednesday that her chamber is also at work, "in consultation with the public health, labor, nonprofit and business communities."
--Editing by Orlando Lorenzo.
Update: This article has been updated with comments from the treasury secretary and details on Senate actions.
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