Trump Officials Discuss Tax Cuts As Emergency Measure To Combat Coronavirus
The Trump administration reportedly is considering an economic response to the coronavirus outbreak that could include a new tax cut package, aimed at alleviating growing fears that the epidemic will cause further economic harm.
The Washington Post reported on Friday that officials began having preliminary discussions on the matter as the stock market fell sharply again this week. Also on the table is increased pressure on the Federal Reserve to lower interest rates.
Officials who spoke with The Post stressed that talks are only in the early stages and no decisions have been reached. Two people said that Vice President Mike Pence’s office is also involved in the discussions.
White House economic adviser Larry Kudlow, who is part of President Donald Trump’s coronavirus task force, told reporters on Friday that discussions were taking place but no “precipitous” actions are on the horizon.
“There is nothing definite I can report. There’s a lot of conversations in and out of the Oval Office,” Kudlow said. “I was with [Trump] the other day talking about one thing or another. We are dealing with this almost a day at a time, and we have no precipitous actions right now.”
Kudlow added: “I just don’t think anybody ought to panic right now. We’re going to stay the course on our policies.”
The Fed indicated also on Friday that it will act if the need arises.
“The Federal Reserve is closely monitoring developments and their implications for the economic outlook,” Fed Chair Jerome H. Powell said in a statement. “We will use our tools and act as appropriate to support the economy.”
Trump lashed out at the Fed during his Wednesday coronavirus press conference, complaining that the central bank has not done enough to roll back interest rates.
The president has been highly concerned about the outbreak’s impact on the stock market, according to reports — and with good reason.
“On Friday, the Dow Jones industrial average opened by falling an additional 1,000 points — or nearly 4 percent — after already being repeatedly clobbered throughout the week,” The Post reported.
Chris Rupkey, chief financial economist at MUFG, told the newspaper that there really is not much the Trump administration can do.
“They’re really stuck here in terms of trying to find a fix for the plunging stock market,” Rupkey said. “It’s very difficult to stem a panic like this has become. Everyone is just waiting for the next shoe to drop.”