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Donald Trump floats tax cuts as response to coronavirus impact

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Via Financial Times

President Donald Trump says his administration will propose a relief package on Tuesday, including a payroll tax cut and measures to help hourly-wage workers, in an effort to reduce the negative economic impact of the coronavirus outbreak. 

Mr Trump said he would hold a news conference on Tuesday following a meeting with lawmakers to release the details of a “very dramatic” package of measures aimed at helping the hardest hit parts of the economy. 

“I will be having a press conference to talk about various things that we’re doing economically, they’ll be very major,” Mr Trump said. 

Steven Mnuchin, Treasury secretary, said the measures would target workers who were hardest hit, in addition to small businesses. He said they intended to provide liquidity to tide people and companies over while the US deals with the spread of coronavirus.

“The economy will be in very good shape a year from now,” Mr Mnuchin said. “This is not like the financial crisis.”

As the number of Americans with the virus has grown, the US president has come under harsh criticism for how he is tackling the coronavirus crisis — particularly his rhetoric, including advice that contradicts US health authorities. 

Earlier on Monday, Mr Trump blamed Russia and Saudi Arabia for a plunge in US stocks. “Saudi Arabia and Russia are arguing over the price and flow of oil. That, and the Fake News, is the reason for the market drop!” he tweeted on Monday. The collapse in oil prices would be “good for the consumer” by lowering petrol prices, he said.

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In another tweet lashing out at critics, the president said 37,000 Americans had died from the flu last year, while only 22 people had so far been killed by coronavirus. 

“Nothing is shut down, life & the economy go on,” he tweeted. 

Congress is also looking at measures to help contain the expected economic damage. A spokesperson for Chuck Grassley, the Republican chairman of the Senate finance committee, said the senator was “exploring the possibility of targeted tax relief measures that could provide a timely and effective response to the coronavirus”.

Chuck Schumer, leader of the Democratic minority in the Senate, said: “What was glaringly missing from President Trump’s press conference was how he is actually going to combat the spread of the coronavirus and keep the American people safe. It seems President Trump is more focused on the stock market than addressing this pandemic.”

Authorities have now identified over 600 cases of coronavirus in the US, most of which were in King County in Washington state, according to Johns Hopkins University. Florida on Monday became the latest state to declare a state of emergency to help it deal with the crisis.

Ted Cruz, a Republican senator, said he would stay home in Texas after learning that he had interacted with a man who tested positive after attending the Conservative Political Action Conference, a big four-day event held two weeks ago less than 20km from the White House. Mr Trump and Mike Pence, his vice-president who leads the White House coronavirus task force, were also both in attendance.

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Speaking at a White House briefing on Monday, Mr Pence said he had not been tested for the virus and that he did not know whether Mr Trump had been tested.

The White House response to the crisis drew more criticism at the weekend after the US surgeon-general and Anthony Fauci, the respected head of the US National Institute of Allergy and Infectious Diseases and member of the coronavirus task force, gave conflicting numbers for the number of test kits that had been distributed.

The Centers for Disease Control and Prevention has been under pressure to boost testing for coronavirus across the US, after criticism that the Trump administration rolled out testing too slowly. Nancy Messonnier, a vaccine expert at the agency, said there were enough lab kits available to health authorities to test up to 75,000 people. Private labs were also increasing testing. 

Follow Demetri Sevastopulo on Twitter: @dimi

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