The biggest of all the bigger financial issues around the economic shut-down will ultimately come down to a battle this spring/summer over a massive bailout for state governments to replace their missing revenue.  States like California, New Jersey, Illinois, Connecticut & New York have been struggling with financial issues for years.

“You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”  ~ Rahm Emanuel

Long before the Wuhan Virus those states were near financial collapse.  The only thing keeping them afloat was as expanding economy, and new revenue as a result of President Trump’s economic policies (making bigger pies).

The economic shut-down in those specific states makes their preexisting financial trouble exponentially worse.

Not only will CA, NJ, IL, CT and New York demand a bailout, a very massive bailout to cover their revenue shortfall, but they will almost certainly use the wuhan virus as an excuse to cover and bail-out preexisting budget deficits.  Governor Andrew Cuomo hinted toward his intention weeks ago.  He sees this as an opportunity to get federal money.

So when Senate Majority Leader Mitch McConnell throws a bucket of ice water in the face of blue state governors who were anticipating to “make money” by forcing the country to subsidize their overindulgent spending habits, obviously Cuomo is apoplectic.  WATCH:

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Earlier today National Economic Council Director Larry Kudlow appeared on Fox Business with Lou Dobbs to discuss congress renewing funding for the small business and payroll protection program.   Kudlow estimates current unemployment at more than sixteen percent (16.3%).

When questioned about potential changes to our economic system, financial system and potential increases in taxes, Kudlow gets energized and jumps on the table to talk about the Main Street MAGA program. Focus on blue-collar, focus on the middle-class, let’s get manufacturing moved back into the United States and re-energize the economy….

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Treasury Secretary Steven Mnuchin calls in to Stuart Varney to provide updates on congressional funding for the Paycheck Protection Program (PPP) and the Small Business Administration relief package.  Sec. Mnuchin covers a range of topics from Harvard to oil.

After discovering that several large companies have applied to the PPP program, Mnuchin warns them about the statements on the qualifying ‘certification’.  The SBA/PPP program is designed for small businesses without access to the capital needed to continue payroll operations.  Any big business that has access to capital could face severe penalties and/or investigation if they disregard the certification and make an SBA claim under the program.

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Republicans and Democrats finally agreed on a supplemental spending bill that will bolster the paycheck protection program with an additional $321 billion in relief funds.

[WASHINGTON] – […] The deal also includes $60 billion in loans and grants for economic disaster assistance, $75 billion for hospitals and $25 billion for coronavirus testing. Of that testing money, $11 billion will go to states and some will also go to the federal government.

Democrats admitted defeat on their demands for $150 billion for states and local governments after McConnell and Mnuchin took a hard line against including that money. (read more)

Likely President Trump and Secretary Mnuchin will discuss during today’s briefing. The bill should pass later this week.

Comrades, senators within the United States government have proposed a terrific scheme to force taxpayers to fund their own confinement.   According to the plan $500 billion will be provided to state and local officials in an effort to offset lost revenue as a result of keeping citizens under house arrest.  Under the remarkable plan, taxpayers will now be paying for their own confinement.

Under the proposal, citizens who are not permitted to work; and who cannot leave the confinement of their homes or residence to earn a living; are now going to be compelled by the authority of the government, to pay the continued salaries of government workers.

Meanwhile, in a brilliant twist to benefit the State, as a result of their dictatorial power there is no currently functioning system of representation for any citizen to petition their unwarranted house-arrest.  You just can’t make this stuff up folks… unfortunately.

WASHINGTON (Reuters) – A U.S. Senate Republican and a Democrat proposed a $500 billion rescue package for state and municipal governments on Monday, as it became increasingly clear that the next coronavirus relief bill will not include money for reeling local authorities.

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Treasury Secretary Steven Mnuchin appears via phone on Fox Business News to discuss the small business payroll/paychecks program. Ms. Bartiromo claims her network of friends in the business community want to use the free government money for themselves; but the Treasury is forcing small businesses to use the money to retain payroll.

Obviously Ms. Bartiromo runs with a very self-centered network of friends incapable of accepting a government program structured to help the workforce they employ (75%). Instead, Ms. Bartiromo’s tribe wants to exploit the angles, fund ways to game the system, use grants to line their own pockets, and operate their own corrupt schemes.

Treasury Secretary Mnuchin informs Bartiromo the loan program (with complete repayment forgiveness) is entirely purposed to pay the employees. It was never designed to replace revenue; only cover all payroll expense and offset 25% of other operating costs. If her friends in businesses don’t like that, too bad.

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Ms. Bartiromo needs to find a better tribe.

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The ADP payroll report shows a drop of 27,000 jobs, better than the forecast drop of 125,000; but many fear the worst is yet to come as millions of people file unemployment claims as a result of the coronavirus shut-down.

A big unknown question surrounds the number of employees that businesses will attempt to keep on the payroll through use of the coronavirus relief funds passed by congress.

The ADP period in the latest report ran through March 12th.  Within that data Goods-producers lost 9K jobs while Services were down twice that much. Small businesses (fewer than 50 employees) were the hardest hit, shedding 90K positions last month; while Large businesses (greater than 500 employees) actually gained 56K jobs; and Medium-sized businesses grew 7K through the March 12th period.

The big question surrounds how quickly small businesses can access the federal relief funds; and whether those businesses will use the incentives to retain their workers.

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Treasury Secretary Steven Mnuchin explains some of details about how the CAREs Act provides financial relief for small businesses (0 to 500 employees). Mnuchin explains how the primary part of the relief bill will support approximately 50% of those impacted.

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The Treasury Department has stood up a system inside the Small Business Administration that cuts through much of the bureaucracy. By using FDIC lenders (local banks) as the point of contact for small businesses and S-corps Treasury can backstop the process.

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Treasury Secretary Steven Mnuchin appears on Fox News to discuss the latest developments in the battle against COVID-19 and how the coronavirus economic relief package will roll out. Unfortunately the always insufferable Wallace wants to waste time discussing the politics of the administration effort and not communicate important details to American businesses/individuals about what financial relief efforts are available.

Smartly Secretary Mnuchin outlines the process. The Treasury Department has stood up a system inside the Small Business Administration that cuts through much of the bureaucracy. By using FDIC lenders (local banks) as the point of contact for small businesses and S-corps Treasury can backstop the process. [SEE BELOW]

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The local business (or S-corp) takes their payroll and yearly expense documents to their local bank where they already have a relationship. As long as the bank is in the FDIC network; and because the emergency funds are distributed based on a good faith relationship; the bank gives the business or individual immediate access to funds; the bank deposits in the business account. The FDIC guarantees the lender against any risk.

If the business does not continue payroll for the employees, the funds are considered a loan that must be repaid. However, if the business retains their employees (continues to keep current payroll); or -if needed- rehires any recent lay-offs using the funds provided; then the emergency loan becomes a grant the business will not have to repay. The system should be in place by this Friday.

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Earlier today President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in the oval office.  [Video and Transcript Below]

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[Transcript] – THE PRESIDENT: Well, thank you all very much. This is a very important day. I’ll sign the single-biggest economic relief package in American history and, I must say, or any other package, by the way. It’s twice as large as any relief ever signed. It’s $2.2 billion, but it actually goes up to 6.2 — potentially — billion dollars — trillion dollars. So you’re talking about 6.2 trillion-dollar bill. Nothing like that. And this will deliver urgently needed relief to our nation’s families, workers, and businesses. And that’s what this is all about.

And it got a 96 to nothing. And, I don’t know, what was the number in Congress?

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