White House economist: Coronavirus relief bill is 'insurance policy' for V-shaped boom
Democrats are fighting against President Trump's push for a brief extension of the coronavirus relief package but the economy continues to grow despite congressional gridlock, White House economist Joe Lavorgna told "America's Newsroom" Wednesday.
Lavorgna, chief economist of the National Economic Council, spoke to host Sandra Smith after days of closed-door negotiations between Democratic leaders and White House officials who are under pressure to pass another round of emergency aid by the end of the week.
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"The president right now is hyper-focused on getting a deal done because while we have this V-shaped boom, why not take out an insurance policy and solidify what looks like we're going to see, a record second-half economy," Lavorgna suggested. "The Democrats have fought against it."
He pointed to a "renaissance" in manufacturing, citing motor vehicle production up 77% from the low as "very good high-paying jobs are returning," and a 13-year high in new home sales.
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Trump told "Fox & Friends" earlier Wednesday that he might take executive action to extend payroll tax cuts to help businesses rehire their workers, which Lavorgna said would be a "huge supply-side benefit" for small businesses, many of which are mom and pop shops with fewer than 20 people.
"The president is just trying to work in the best interests of the American people and trying to get the economy moving. We have reopened and been very successful," he said.
"I want to mention if you look at the data, the U.S. has far outperformed other countries in terms of GDP. The U.S. GDP rate was down 9%, much worse in Europe and elsewhere. These are programs that have gotten the economy moving back and we'll see," Lavorgna added. "Hopefully, Democrats will come on board."
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While a Federal Reserve representative warned that the U.S. might have to shut down again to stop the spread of COVID-19, Lavorgna said they have "no intention of locking down."
"A lockdown would be catastrophic for the economy. It is not going to happen," he said. "It doesn't mean we don't want to provide more relief for Americans. They need it. The economy looks good and the lockdown is not going to happen. It would be horribly bad policy."
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