According to a report in the New York Times, Donald Trump's administration is expecting months of more economic fallout due to the coronavirus pandemic but officials are divided on how to handle it with an election in November looming.
The report states following the latest jobs report showing massive unemployment never seen before, "Congress and the Trump administration face a pivotal choice: Continue spending trillions trying to shore up businesses and workers, or bet that state reopenings will jump-start the United States economy."
"Economists and policy experts, including some in the administration, have likened those efforts to building a bridge through the pandemic recession — one that will carry as many people and companies to the other side of the crisis as possible," the Times' Jim Tankersly wrote. "But as the virus threatens to haunt the nation and its economy longer than some officials had anticipated, Mr. Trump and many Republicans in Congress have grown weary of federal spending to support workers and businesses and have begun urging states to get back to what was considered normal."
He added, "Even some allies of the president, though, acknowledge that may be an unrealistic gamble and more wishful thinking than an actual plan. With confirmed infections and deaths projected to continue rising, and limited capacity to test for the virus, many states are expected to keep businesses closed into the summer or longer. And even once things reopen, simply allowing people to walk into a barber shop or a movie theater does not mean they will do so during a pandemic until a vaccine or effective treatments are available."
With that in mind, White House officials are conflicted about to do with the president's re-election on the line.
According to Trump's director of the National Economic Council, Larry Kudlow, “We put all this money in, which is fine. It’s well worth it. Let’s see what happens. As we move into the reopening phase this month, maybe spillover to June, let’s have a look at it before we decide who, what, where, when.”
However, as Takersly wrote, "Behind the scenes, White House officials are privately bracing for additional economic damage in the coming months and for the economy to take several quarters to return to its pre-crisis levels, even if growth resumes this summer. Yet they are divided over how quickly and aggressively to shift the government from more spending and for now are watching how the economy reacts as states lift restrictions."
He added, "Inside the White House, some officials are hopeful that the Fed, rather than Congress, can take up the work of helping companies through the crisis. But many economists warn that is asking too much of the central bank, and the Fed chair, Jerome H. Powell, has warned that its tools are limited to lending, not spending, and that more fiscal support is likely to be needed."
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