Senate closes in on possible stimulus deal amid coronavirus outbreak

The division continues on Capitol Hill Monday as both Republican and Democratic parties look to reach a deal on a stimulus plan. Yahoo Finance’s Rick Newman joins the On The Move panel to discuss.

Video Transcript

- David Zervos of Jefferies memorably saying on the program last hour that the Fed is engaging in fiscal stimulus, not its traditional monetary stimulus, with these new-- this new package of measures. I want to bring Rick Newman into this conversation because when I put that comment from Zervos on Twitter, several of our frequent economist guests chimed in to say, well, someone has to, in terms of [INAUDIBLE] because Congress has not yet come to an agreement because they can't all get on the same page about what this package should look like.

RICK NEWMAN: Thankfully, the Fed and the Treasury can act faster than Congress can. But we are going to see something pass Congress. So we have disagreements, fairly obvious disagreements, between Republicans and Democrats right now, so the Senate has taken the lead, the Senate, of course, dominated by Democrats. And they passed a bill that included a lot of things economists want to see here, including $500 billion in sort of long-term aid for companies.

But Democrats want to see a lot more protections and some conditions associated with that. For example, they want reporting on who gets these-- who's going to get this money. How long is it going to take to do that reporting? You know, President Trump's company, the Trump Organization, could very well be one of the companies that applies for help because they are in the hospitality industry, after all, which is getting crushed. So Democrats want that. They want more protections for workers.

And honestly, Julie, I think Democrats are going to get those things because Nancy Pelosi, the House Speaker, has said-- the House is coming back in session, they're going to draft their own legislation, and they get to call the shots in the House. And I think they're in a good position to get some of those things.

So I think we are going to see this stimulus bill pass Congress. It could happen this week, which is fast by congressional standards. Those checks going out to ordinary people, those probably will go out, but not as quickly as everybody would like. Look for those maybe mid April. And there could be more than one batch of those.

- And Rick, at the same time, we're hearing some reports that the Trump administration is already trying to look past this. We talked to Mike Isikoff, Yahoo News chief investigative correspondent, last hour about this sort of delicate balance, right, between choking off all economic growth and averting a health care crisis in this country. What are you hearing on that front about this reported on pivot?

RICK NEWMAN: And President Trump himself is sort of floating these trial balloons. So he had issued this peri-- no, these 15-day guidelines. That was March 16th. So if that was sort of a start point, then those guidelines would expire March 31st. That's next Tuesday, eight days from today. And I guess the idea here is that we've got to get back to ordinary economic activity in at least some parts of the economy and at least some parts of the country.

I honestly don't see how it's possible, because you would end up in a situation, potentially, where President Trump at the federal level is telling people in states one thing and-- I mean, I can't imagine Mario Cuomo here in New York, for example, is going to say, sure, fine, everybody-- or some of you can go back to work. I mean, you know, the governors, and we're seeing more and more governors now saying this, the governors realize that this could go on for-- really for months, into the summer, and that it will take restrictions that long at least to sort of begin to contain this virus.

So you know, this is what happens in Washington. Trial balloons go up. Politicians and policymakers gauge the reaction. I don't think this is going anywhere, but I could be wrong, and we could see competing messages from governors and the president about how much we should all get back to our lives within a week or 10 days.

- Rick, we saw Governor Cuomo here in New York call on the federal government to actually nationalize the procurement of emergency medical supplies and then disperse them to the states. Have you gotten any sense from people on Capitol Hill why the DPA, the-- what is it, the Defense Production Act has not been implemented to produce ventilators?

RICK NEWMAN: I mean, it's been a source of confusion for the last four days because President Trump actually said he had enacted the Defense Production Act, and then his administration has said, no, that hasn't actually happened. I mean, it's a fair question whether, you know, invoking this act would produce more of this equipment that we need faster. So we're talking mostly about ventilators, respirators, and masks. And it's probably a fair question what's the right way to do this. And I don't take as a given that, oh, just put the federal government in charge and it'll all happen faster.

So I'm-- aside from the confusion that President Trump is creating by saying it's on, no it's off, and then leaving everybody wonder what-- wondering what's going on, I'm willing to give the government the benefit of the doubt that the best way is to-- the best thing the government can do is serve as an organizer, a point person, a facilitator, and get the private industry doing this where they can do it.

I will tell you, so General Motors is one of the companies that has received approval-- that's what President Trump said-- to get into the business of manufacturing some of this stuff. And they have come out and said they're going to use their manufacturing expertise to help another company that actually makes these products make them faster.

So I actually asked General Motors a short while ago this morning, what does that mean, what do you guys actually doing, and they don't have anything to say about that yet. They say more details are coming. So for the time being, it seems like everybody is still trying to figure out the best way to speed production of these things.

- Right. Indeed they are. I just wanted to mention, by the way, as we hear about different states and their reactions, Melody just sharing with us that the LA Unified School District has now suspended the school closures-- extended the school closures, I should say-- until May 1st. As a reminder, here in New York state, we've got schools closed till April 20th. So May 1st obviously extending it yet longer.