Retailers say the new stimulus plan can’t wait until after the election
What is he thinking?
President Trump announced via Twitter yesterday that he was pulling the plug on negotiations with Democrats in Congress over a new stimulus bill to help struggling American citizens and businesses hit hard by the coronavirus pandemic until after the election.
Markets did not react well to the president’s announcement, which came hours after Jerome Powell, chairman of the Federal Reserve, praised action taken earlier this year including the passage of the CARES Act and other legislation intended to boost the economy while calling on Congress to avoid delay and think big on a new plan.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses. Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth,” said Mr. Powell. “By contrast, the risks of overdoing it seems, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods.”
The National Retail Federation, which has generally been supportive of the president’s business-leaning actions since taking office, reacted negatively to the president’s tweet.
“The pandemic isn’t over and neither is the economic crisis it has created,” said Matthew Shay, president and CEO of NRF, in a statement. “There are many families still struggling to make ends meet and businesses facing obstacles to putting workers back on the payroll. We need a vaccine to ensure our personal health. And we need further stimulus to ensure we can fix an ailing economy, bring people back to work and spur growth in communities large and small.”
NRF has advocated for a variety of protection for its members, including an expansion of the Paycheck Protection Program, tax credits for business purchases of personal protective equipment and protection for businesses from COVID-19 illness/death lawsuits filed by workers and/or their estates.
The trade group was among 200 associations that sent a letter to Congressional leaders last week urging them to come together “to reach a bipartisan deal on legislation to prevent catastrophic economic harm.”
- Donald J. Trump – Twitter
- Trump’s ‘illogical’ move to end stimulus talks baffles Wall Street and Washington – CNBC
- Stocks fall after Trump tweets he’ll delay stimulus talks; move follows Fed’s Powell urging Congress to approve a robust plan – USA Today
- Recent Economic Developments and the Challenges Ahead – Board of Governors of the Federal Reserve System
- Retailers say White House and Congress cannot wait on new pandemic recovery legislation – National Retail Federation
- COVID Relief Now Coalition – National Retail Federation
- New COVID bill in Congress could be retailers’ ‘key to recovery – National Retail Federation
DISCUSSION QUESTIONS: Do you agree that quick action is needed on a new stimulus plan or do you think it can wait until after the election like President Trump? What elements of a new plan would you want to see to support American consumers and the businesses that rely on them?