WASHINGTON: President Donald Trump on Friday said his decision on when to reopen the US economy, shuttered due to the coronavirus pandemic, will be the toughest he has ever taken. “I’m going to have to make a decision and I only hope to God that it’s the right decision. But I would say without question, it’s the biggest decision I’ve ever had to make,” Trump told a press conference.
Trump, who faces a tight reelection in November, is keen to get the US economy back open after weeks of tough measures that shut down businesses and dramatically cut down on transport across the country to slow the virus’s spread. The previously strong economy was the biggest selling point in his campaign platform.
However, he also faces warnings that a premature opening would put lives at risk by allowing the virus to take a new hold. “I have to make the biggest decision of my life,” he said. With current federal guidelines on social distancing set to expire at the end of the month, expectations are growing that Trump will tell Americans they can start resuming normal activity from May-at least in parts of the country. The decision will be partly based on medical data, but also heavily swayed by political considerations and advice from the business community which has been devastated by the shutdown, with an abrupt drop in revenues and mass unemployment claims.
In what will mark an important step in the process, Trump says he will be announcing members of a new task force on Tuesday. “I call it the opening our country task force or opening our country council,” he said. The group will include “very great doctors and business people,” as well as probably governors of states. In a sign that Trump will seek broad support for what could be a politically dangerous decision, he said he wanted bipartisan representation from politicians on the council.
“I want to put on both parties,” he said.
Reassuring critics who say he risks rushing, Trump insisted medical opinion will be key. “We’re looking at a date, we hope we’ll be able to fulfill a certain date, but we’re not doing anything until we know this country is going to be healthy,” he said. “We don’t want to go back and start doing it over again.”
The United States racked up a $744 billion budget deficit in the first half of fiscal 2020, up 8 percent from a year earlier, the Treasury said on Friday, ahead of an expected April spending explosion and withering of revenues amid the coronavirus pandemic. The Treasury said the budget deficit for March totaled $119 billion, down 19 percent on slightly higher revenues and lower outlays altered by calendar shifts, but the data did not show significant effects from virus-prompted business shutdowns. The U.S. fiscal year started in October 2019.
Outlays from a $2.2 trillion rescue package passed on March 27 are only just beginning. Tax payments due on April 15 have been delayed until July 15. “We will certainly see a significant impact to receipts in the April results,” a US Treasury official told reporters. “On outlays there will be a significant impact as well, as some of the stimulus programs will have begun to be paid.” Oxford Economics said in a research note that the second-half deficit will likely double to $1.5 trillion, bringing the full year gap to a record $2.2 trillion.
“If additional stimulus measures are passed, the deficit will be larger,” they wrote. About $283 billion in non-withheld individual income taxes were paid in April 2019, according to Treasury data. The filing and payment delay will likely reduce such receipts in April 2020, the Treasury official said. Receipts for taxes withheld from worker paychecks, which totaled $114 billion in April 2019, are expected to be reduced by rising unemployment.
The $744 billion six-month deficit fell well short of the record billion first-half budget gap in 2009, a period reflecting the worst months of the 2008-2009 financial crisis and the start of a deep recession. The full-year 2009 deficit also was a record that still stands, at $1.41 trillion, with $1-trillion plus deficits following for the next three years. International Monetary Fund Managing Director Kristalina Georgieva said on Thursday that the coronavirus pandemic had already caused a recession that will be deeper than 2009 – the worst since the 1930s Great Depression – with a partial rebound expected in 2021.
The Congressional Budget Office forecast in January, well before the extent of the coronavirus outbreak became apparent, that fiscal 2020 full year deficit would hit $1.02 trillion after reaching $984 billion in fiscal 2019. Receipts for the first six months of 2020 totaled $1.6 trillion, a first-half record that was up 6 percent from a year earlier, while outlays totaled $2.35 trillion, also a record that was 7 percent higher than a year ago.
In March, receipts totaled $237 billion, up 3 percent from a year earlier, while outlays fell 5 percent to $356 billion. But significant March benefit payments were pushed into February, reducing outlays by $51 billion. Accounting for calendar effects, March had an adjusted deficit of $170 billion, compared with an adjusted deficit of $136 billion in March 2019. For the fiscal year, the adjusted deficit was $744 billion compared with $690 billion in the same period the prior year. – Reuters