The second round of coronavirus stimulus coming and small business loans, payroll taxes should be at the center of concerns

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The White House and Congress have yet to shell out the $ 2.2 trillion pandemic stimulus package for businesses and average Americans, but are already planning to spend billions of dollars more on a second plan to mitigate the economic blow suffered by the coronavirus, learned FOX Business.

Wall Street leaders informed of government efforts say that although the exact details of the next round of stimulus remain unclear, the various political factions involved in the process have reached informal consensus on several key elements, including relief additional for small businesses and an extension of payroll tax credits.

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The move comes amid complaints from small businesses and banks that the federal government is not ready to start administering the $ 350 billion in small business loans found in the first round of stimulus before Friday’s deadline .

Meanwhile, administration officials have told Wall Street executives that they fear the small business component will not be enough to meet the demand for loans. Small businesses are considered businesses with 500 or fewer employees, but they are the backbone of the US economy, employing almost half of the US workforce. They have been hardest hit by the social distancing orders that President Trump has now extended until at least April 30 amid the spread of the coronavirus.

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Discussions on the new round of stimulus packages are an indication of the growing consensus on Wall Street and Washington that there will be no easy or quick economic solution for an economy that has been virtually closed and teetering on the brink of d ” possible depression in the midst of the virus epidemic.

On Thursday, 6.6 million people filed initial unemployment claims – the largest number of claimants in a week. Last week, 3.3 million people filed claims, a record number so far this week.

A study published by the Federal Reserve of Saint-Louis estimates that unemployment could reach 47 million people, or 32% of workers. For the context, the highest unemployment rate during the Great Depression was 24.9%.

A report by Goldman Sachs this week indicates that economic activity defined by gross domestic product fell 34% in the second quarter of this year.

A White House spokesperson declined to comment. Spokespersons for the majority in the Senate, Mitch McConnell, and Speaker of the House, Nancy Pelosi, declined to comment.

Under the current virus stimulation law known as the CARES law, the federal government will begin providing small businesses with the lesser of up to $ 10 million as of Friday or a percentage of the mass salary. But given what they foresee as exorbitant demand, government officials have told Wall Street leaders that they would likely need tens of billions more to meet the financing needs of the small business community. . These companies have been forced to lay off millions of Americans and the loans are forgivable if they keep their employees.

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In addition to the additional loans provided, those familiar with the conversations between the White House and congressional leaders say the payroll tax credit could be extended from June 30 to the end of the year.

The federal government and the Federal Reserve have injected billions of dollars into the economy by printing money, using a variety of means, including loans and redemptions. But it is not known whether these measures work; share prices remained volatile, although the Dow Jones industry average ended Thursday up more than 450 points. All averages of the main stocks have fallen by more than 20% since the start of the year.

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