COVID-19

Treasury expects to borrow $3 trillion over next 3 months

David Brancaccio, Nancy Marshall-Genzer, and Alex Schroeder May 5, 2020
Heard on: Marketplace Morning Report
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The Treasury needs the money to pay for all of the new stimulus spending to keep the economy afloat during the COVID-19 crisis. Mandel Ngan/AFP via Getty Images
COVID-19

Treasury expects to borrow $3 trillion over next 3 months

David Brancaccio, Nancy Marshall-Genzer, and Alex Schroeder May 5, 2020
The Treasury needs the money to pay for all of the new stimulus spending to keep the economy afloat during the COVID-19 crisis. Mandel Ngan/AFP via Getty Images
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The Treasury Department says it’s going to borrow about $3 trillion over the next three months. That’s almost triple what the Treasury borrowed for all of the 2019 accounting year.

So, why do we need to borrow so much right now?

The Treasury needs the money to pay for all of the new stimulus spending to keep the economy afloat during the COVID-19 crisis. So far, Congress has authorized more than $3 trillion in relief spending. Some of that money is being used for direct payments to Americans below certain income thresholds, and the expansion of unemployment.

The money is also being spent on small business loans and aid to hospitals. Plus, the Treasury is backstopping the Federal Reserve’s efforts to shore up the economy.

The only way to pay for this is more borrowing because the deficit was already expanding before the coronavirus crisis hit — to pay for things like the 2017 tax cut.

Plus, the federal government postponed the tax deadline to July, so it’s not getting its usual April tax payments. Congress is also considering another financial aid package.

On Monday, the Treasury said it expects to borrow another $677 billion this summer.

COVID-19 Economy FAQs

It’s still the question on everyone’s minds: What’s going on with extra COVID-19 unemployment benefits?

The $600-a-week payments have ended, officially, as of July 31. For now, there is no additional federal pandemic unemployment assistance. House Democrats want to renew the $600 payments. Senate Republicans have proposed giving the unemployed 70% of their most recent salary by this October, when state unemployment offices have had time to reconfigure their computer systems to do those calculations. Until then, jobless workers would just get another $200. But, nothing has been agreed upon yet.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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