US government to give citizens emergency financial aid

Donald Trump has dramatically stepped up the US government’s response to the coronavirus outbreak by announcing plans to send cheques directly to American citizens to give them emergency financial aid, while agreeing to purchase up to $1tn (£830bn) of corporate bonds.

The White House said it was preparing to send the payments to Americans within two weeks as part of a vast stimulus package to shore-up confidence in the world’s largest economy as the efforts to contain the disease threaten a global recession.

At a special briefing in Washington, the the US Treasury secretary, Steve Mnuchin, said: “This is stuff that needs to be done now. The president has instructed me, this is no fault to American workers, for medical reasons we’re shutting down.”

Speaking after the Republican senator, Mitt Romney, proposed sending $1,000 cheques, Mnuchin said the value of the payments would be “bigger than what’s in the press”.

The handouts are part of a wider $850bn stimulus package the Trump administration is negotiating with Congress. The bank bailout package agreed at the time of the financial crisis – known as Tarp – was worth $700bn.

The US Federal Reserve will also invest $10bn to a special purpose vehicle to provide guarantees that the central bank would purchase up to $1tn of US corporate bonds if required, aiming to smooth the financial markets after weeks of turmoil.

Mnuchin also said the White House planned to allow individual taxpayers to defer payments of up to $1m and for companies of up to $10m, in steps that could cost the government as much as $300bn.

Speaking alongside Mnuchin at the press conference, Trump said: “We’re going big. We want to get it done and have a big infusion as opposed to going through little meetings every couple of days.

“We want to go big – we want to go solid. The country’s strong. With this invisible enemy, we don’t want airlines going out of business or people not having jobs and being able to live, when they were doing OK four weeks ago.”

“We have ways of getting out money in many ways, very quickly and very actively.”