WASHINGTON—Treasury Secretary Steven Mnuchin said the administration looked forward to an emergency funding package from Congress to deal with the spreading coronavirus and signaled it is prepared to ask for more as authorities in the U.S. and around the world race to mitigate the economic impact of the epidemic.
“We stand ready to work closely with Congress on an emergency funding package and any other related issues,” Mr. Mnuchin told lawmakers on Tuesday. He also suggested the administration would consider an infrastructure package as part of a broader stimulus measure, if one is needed to shore up growth.
Mr. Mnuchin said officials also had begun to consider measures to support businesses facing disruptions related to the virus, as well as workers who may not have paid sick leave.
“We’re looking at all different types of options on the table to address all these issues,” he said. “As we come back later with recommendations we will work with Congress.”
Lawmakers are working through final issues this week on an emergency funding package for fighting the coronavirus that is expected to cost $7 billion to $8 billion. Partisan disagreements over how to price an eventual vaccine have delayed the release of an agreement, as Democrats push for the package to include funding for the government to purchase vaccines and therapeutics at an affordable price to then make available to the public. An agreement could come as soon as late Tuesday.
The Trump administration’s proposal last week to spend $2.5 billion—with $1.25 billion in new funds and $1.25 billion in repurposed funds—was seen by lawmakers as too low. President Trump has said he would accept any amount Congress approves.
Mr. Mnuchin also said U.S. officials are working to distribute close to a million coronavirus test kits in the country, which he said should be available very quickly.
“I have the utmost confidence that we have the best medical system in the world and we will do everything we can acting together to combat this,” he said to the House Ways and Means Committee.
Mr. Mnuchin spoke after finance ministers and central bank governors from the Group of Seven countries said they stand ready to cooperate on actions, including fiscal stimulus measures, to guard against economic risks from Covid-19
“Given the potential impacts of Covid-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks,” the group said Tuesday following a morning conference call.
The statement stopped short of stating specific actions countries might take in response to the virus.
Mr. Mnuchin and Fed Chairman Jerome Powell led the early-morning conference call, which also included the finance ministers and central bank governors from Canada, the United Kingdom, France, Germany, Italy and Japan.
“Alongside strengthening efforts to expand health services, G-7 finance ministers are ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy during this phase,” they said.
The statement also said G-7 central banks will continue to fulfill their mandates, including promoting price stability and economic growth “while maintaining the resilience of the financial system.”
The G-7 nations welcomed statements from the International Monetary Fund, World Bank and other financial institutions pledging to use their tools to address economic and public health challenges stemming from the virus.
Stocks rebounded Monday following one of the worst weeks since the financial crisis, on hopes that central banks would step in to bolster global economic growth as the coronavirus epidemic continues to spread. The yield on the 10-year benchmark Treasury note fell to a new low Monday, settling at 1.085%.
Australia’s central bank on Tuesday reduced interest rates by a quarter percentage point to a record-low 0.50% after the coronavirus began to choke key exports, including foreign education and tourism.
More than 89,000 cases have been confirmed in some 60 countries around the world, with outbreaks widening in Iran, Italy and South Korea, as the number of cases outside mainland China crossed 10,000. More than 3,000 people have died around the globe.
Health officials in Washington state announced four additional deaths as a result of the virus on Monday, bringing the total U.S. death toll to six, and new cases were reported in California, Oregon, New Hampshire, Illinois and Georgia.
Mr. Powell said Friday that Fed officials “will use our tools and act as appropriate to support the economy.” The
also pledged to take action in response to the virus, and a senior European Central Bank official said Monday the ECB could take rates further into negative territory.
Economists are warning that governments can’t rely solely on lower interest rates to ease disruptions related to the virus, especially when rates are already historically low.
Some countries have already announced fiscal stimulus measures designed to prevent temporary slowdowns from turning into deeper downturns.
South Korea injected more than $13 billion in emergency funds last week to stoke economic activity. Italian officials said Sunday the government would consider offering tax credits for companies that report a 25% drop in revenues. In Hong Kong, which entered recession last year, the government has said it would give about $1,284 to each adult resident, and slash an income tax for nearly 2 million workers.
In a joint statement Monday, the leaders of the World Bank and IMF pledged to use their tools “to the fullest extent possible,” including emergency financing facilities, to help countries address public health and economic challenges from the virus.
President Trump said on Twitter last night that Democrats in Congress should consider a one-year payroll tax cut, and urged the Fed to lower interest rates.
A senior administration official said Monday the White House doesn’t see any immediate need to put together a broader fiscal policy response because the economy has been performing well and it is too soon to tell whether there will be persistent disruptions from the virus. Still, the official said the White House wants a rate cut because of declining commodity prices and long-term interest rates that signal global deflationary impulses.
—Nick Timiraos contributed to this article.
Write to Kate Davidson at [email protected]
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