White House economic adviser Kevin Hassett said Monday that a future stimulus package may not be needed to address the economic damage caused by the novel coronavirus pandemic.
“I think it’s possible that we will see a strong-enough economy that we don’t need a phase four,” Hassett told reporters at the White House.
Hassett, echoing other White House officials, said the administration is currently in a “wait and see” mode to assess the full impact of previous stimulus legislation on the U.S. economy before resuming formal talks on the next package.
His remarks come as a number of states gradually reopen businesses amid the pandemic, which has resulted in a massive spike in unemployment as a result of closures aimed at preventing the spread of the coronavirus.
Hassett pointed to encouraging data showing an increase in retail visits and business openings as states begin to reopen.
“There are a lot of indicators that appear to be really turning around quickly, like retail visits, percentages of business open,” Hassett said.
“If the economy continues the momentum that we’re beginning to see over the last couple of weeks of data, then I think that one might conclude that the stimulus we’ve already passed is enough,” he continued. “But if that doesn’t happen, we’re really learning everyday a little bit more about how the economy responds to this.”
Hassett acknowledged that the federal government may need to replenish the Paycheck Protection Program, a popular small business lending program established by the $2 trillion stimulus bill than ran out of money weeks after President Trump signed the measure in late March. Congress and the administration successfully negotiated a deal last month that included $310 billion in additional funding for the program.
Hassett also indicated it was possible the government would need to provide targeted relief to certain sectors, such as restaurants or the travel industry.
“We need to watch things develop, see what happens, and then have a plan for whatever happens,” Hassett told reporters.
The White House has signaled it will not approach formal negotiations on the next round of stimulus until the month of June.
Meanwhile, House Democrats on Friday narrowly passed a massive $3 trillion economic stimulus package, a measure that has already been rejected by Trump and Senate Republicans.
Trump has signaled he’s in no rush to secure a deal on a fourth round of stimulus and last week declared the House measure “dead on arrival” before it was approved by the lower chamber. The president has pushed the idea of a payroll tax cut to be included in the next round of stimulus.
The unemployment rate spiked to 14.7 percent in the month of April and Hassett has predicted it could exceed 20 percent.
Federal Reserve Chairman Jerome Powell said in an interview Sunday the economy was unlikely to return to its full strength before the end of 2020.
Asked about those comments Monday, Hassett said he expected to see an improvement in the third and fourth quarters, but said it was an open question when the country’s economy would rebound to the strength it demonstrated in January.
“Most economists agree that the near term outlook is very similar to what the [Congressional Budget Office] is saying which is that you’re going to have a second quarter which is one of the worst quarters we’ve ever seen and then a fourth quarter and a third quarter that are a lot better — a very strong second half of the year,” Hassett said.
“The question is how long does it get back to peak … and I think that is an open question,” he continued.