Larry Kudlow breaks down White House response to economy amid coronavirus
We're back with our special virtual, town hall America. Works together answering, questions from you the viewer who's, just trying to survive through all of this your questions have been fantastic, folks and we want more of them right now I want to get back to our panel in a moment but first let's bring, in National. Economic Council director and White House economic advisor Larry Kudlow welcome. To this show Larry we've, got a ton of questions from you from very worried business owners parents, and just folks who are trying to survive to better times but, before I get to them this morning the Federal Reserve announced. 2.3. Trillion, dollars, are going to pour that into the economy he's, low prolonged loan program, in, addition, to the trillions that have already been pledged and so, how does this help the economy more specifically, Larry how does it help small businesses. Well. Okay this. Is the. Medium. Business I, think it's I think it's called the Main Street lending. Facility, I think that's what the Fed has termed it and it's. Going to be big. Dollars, I, don't. Know all the parameters yet they haven't laid out all the parameters are still working with the Treasury but, just one thought here, at the top. Administration. President, Trump wants every. Small, and. Medium. Business, particularly, the small business but now we have the Fed back up, everybody. Who, wants, alone to. Stay in business to, keep, their, payroll. Intact. To. Cover expenses. Everybody. Who wants one is going to be able to get one that is our, goal we want all the small business, and the, medium business to, get, loans. Those, are as you know from the banks but they're going to be government guarantee loans and if you hang on to your payroll Charles, that will loans will be forgiven, after. A period of time but that's the essential, message we. Want to keep you in business we. Know just, how difficult this is we know the hardships, are enormous. We, are in a contraction, because of the virus the good, news here at least at the margin is that, the mitigation. Efforts. Seem. To be bearing. Fruit the, numbers are enormous, ly improved let, us hope we can Rio in this economy in the next four to eight weeks as I've said before but, right, now on regards. Your first question, we just want everybody, who, needs these loans to get them there's other people involved we could talk about other aspects, of the Assistance Program we just we want folks to stay liquid with as much cash as possible and we want to cover everybody well, it's as an admirable, goal and the speed in which you're trying to achieve this has never been done before but, there are a lot of questions, on how to actually get it done so I want to share some of them with you now beginning.
With Christina Elsie emailed and asked why, are banks, requiring 15, months of payroll summaries, along with 941, quarterly, forms the, process, was presented, as quick and efficient to get approved and no, no banks can't give an answer as to what will happen why. Is this Larry a lot, of people saying that banks are making this process too complicated and part, perhaps because, while, they take money from small businesses, they're reluctant to deal really and give loans to small businesses, well. Charles, look I am, not I'm. Not the technical guy I may not be able to answer these questions for, specific, banks but I do. Want to say this I mean I've. Talked to some people that they're always startup. Glitches, but, you know hats off to secretary. Steve minutiae and the, SBA, they've done a great job in a very short period of time I, believe, the. Banks aren't cooperating, I mean I'll give you some numbers I just talked to my great friend Monica Crowley over, at Treasury so. Far as of 2:00 p.m. today. 500,000. Loans have been approved Charles that's what in a week less than. 500,000. Loans a hundred. And twenty eight billion dollars. Worth of loans and almost. Four thousand, bank lenders, almost, four thousand, bank letters so this. Thing is wide sweeping, its gigantic. Program, and you, know they're always going to be glitches, but, the, fact is I don't want to blame anybody I don't want to blame your caller I don't want to blame the banks either because, everybody, is working as hard as they can president, Trump met with. Leading, community, bankers, and leading, big city bankers. Just a few days ago I was in the meeting and we. Were grateful for their support so everybody's, trying to pull, their oar right here there's no doubt about it I think these questions are being asked got a desperation. Because the clock is ticking for so many people of when, these loans are approved typically. Do you have a time on how, quickly they get out the door, well. That's good question and I think, the intent of the program was. More, or less 72. Hours Charles now, I don't want to misspeak and, I don't want to put anybody sba. Or Treasury in a bad spot but, I think a few days is, supposed. To be the norm when, all, the wheels are turning as, we hope they will turn should, be longer than a week I mean look at we're, getting to the. Economic. Impact, assistance, the Treasury the direct tracks check-check. Scuse. Me we're, getting those out probably. A week before, we expect it so that's popping, up and I learned today also. Secretary. Scalia, over at the Labor Department, the plus up in the unemployment the. Extra $600. In the unemployment, benefits. That's, come online, way. Faster, than we originally thought, I think that's coming online this, week we. Were worried it might take several more weeks so these, systems are working pretty good in a short period of time and to people who are, worried and have complaints, I would just say this just. You know go online to, the SBA go online, to. The Treasury Department or if it's unemployment side go online to. The Labor Department, you will get answers, and I, think, another word most. Of these loans are one-page, forms, that's what I've been told by, people who have gotten them maybe that's not true in every case but that's what I'm hearing no the forms, are simple I think the questions have been with the various, different, banks in their own rules. Which of course there's, one thing to consider Larry, I want, to bring my panel starting, with Brian Bryn Berg who has a question for you about regulations. Brian. Allari. More about macro, question, for you here you know when we look back to the economic, boom that came, just before all of this it was driven by a regulatory. Cuts, and tax cuts what, we've seen lately is just. Raft of government, spending unlike, anything we've ever seen and some rumblings, that some of that could come with you, know more regulatory, hurdles.
And And more red tape, for businesses. My, question is how do we get back to those pro-growth. Policies. That we had before all this started how do we avoid letting. The regulation. And the government spending continue to balloon once we get past the crisis. Well. Okay, I might. Push back a little bit tickly on the regulatory front I mean I I, sit. As a member. Of the coronavirus. Task force and I know, that. We have deregulated. A number. Of areas, to. Expedite. NowI. The development, of vaccines, and, therapies, and so forth but, also to get all the medical equipment, in place, the testing. The. Masks. And. All the others, developing. You know the testing thing is coming along very nicely we're, working hard on that I know, the FDA is deregulated. Because. Some, of the potential. Therapies. Are. Available. Or will shortly be available on an experimental. Basis, we've been working with that there's a couple of key therapies, so, I think certainly. On the medical healthcare side we've, continued. To deregulate. Now look, as. A as a long time. Supply, side er who. Believes in the incentive, model of growth I will. Tell you this. We. Have no choice. But. To try, to cover as many. Folks as we can. Regarding. Things like cash and liquidity, and, again. Small business. Presentations. And payrolls, look, we. Are sending assistants out right now to. Roughly. 175. Million. Americans. Okay let me repeat roughly. 175. Million that, is an enormous, enormous. Number, for what will be a temporary. Program, because, the virus itself is, an incredible. Crisis, exponential, crisis but it will be a temporary crisis and it will eventually abate, so, that's what we've done hundreds. Million and covering, a very, wide swath I mean look the, for example the, small. Business, payroll tax holiday that's. An incentive driven, program, and, very proud of that. We've, pushed, back income. Tax dates, instead, of April it's going to be June or July. Student, loans have been pushed back because people need the liquidity folks. Who might, not demand, it to go home because of the virus or a family member has the virus that the kids are home so, we've turned unpaid, leave into, paid leave we've, got to cover the unemployment, I mean remember this. Was not the fault of the of the individual, this, was not the fault of the business this was the fault of, virus. That virtually. Nobody expected, and certainly, not you know the skyrocketing. Exponential, nature of it so, I'm just saying all, the tax cuts that President Trump, put in place are still in place all, the, deregulation. Measures that the president put in place are still in place the freeing up of the energy, sector the better trade deals president. Rebuilt, and Riaan sent avise this economy, and as, you noted I think it. Was roaring, in January. And February going. Into the new year before the virus hit that is still there and that's why I believe. Maybe, I'm just an eternal, optimist, but, I believe, once, we get through this and we will get through this lord knows this. Economy, will snap back very, rapidly, people, will be going back to work. Small. Businesses, will be reopening, and you, know new. Businesses, will appear. New, folks will come to the fore that's what makes America so great we. Are the most inventive, entrepreneurial. Country all we're doing now we're not changing. The president's, pro-growth, policies, all we're doing now is trying, to help ordinary. Main. Street middle-income, blue-collar. Folks we're trying to help them get by this I'm, just trying to help him get some cash and liquidity you, know to meet basic necessities. For heaven's sake and Larry tooth to that point even today. Chairman. Powell noted, that this economy was a juggernaut, he, talked about the firm footing and that's one of the reasons he thinks our economy, will be very strong, to your point once, we come out of it the question though for a lot of these folks is building. That bridge from here to there and I want to bring in a question from Valerie H about. Paying her employees let's. Take a listen. In. Order, to meet the requirements, for loan forgiveness through, the SBA must. I pay my employees for, consecutive, weeks, the, funding is obviously, going to take longer than expected and. We are having difficulty. Continuing, to pay our employees without, it can. We stop and then start up again once we receive, the funding, we've, already paid, them for two weeks since we had to close Larry, will there be forgiveness for rehiring, employees.
Yeah That's a good question you know I think. The, answer is yes, okay. But charles, i again. I'm not the expert on every. Detail i know, we've given them a time frame, where, to begin which, i think was at some point around mid february if i'm not mistaken, good thing okay, well I got one right that's good. And I. Can't. Quite answer the consecutive argument, I know, that generically, speaking. Seventy-five. Percent of the loan has to go to payroll. Now, does it have to go to consecutive pair I have to find that out for you I will get back at me would you get back to the caller, I think the answer is yes but I'm not entirely sure okay and quickly on that seventy-five percent that is a major beef with a lot of folks if you have a business in New York New Jersey your, writ might be fifty five fifty percent, of your business and. These folks are saying hey you know what I'm trying to keep the business open part of that means paying the rent I would, like to make this whole thing forgivable. If I could retain my employees, but, still only, 55, maybe, sixty, percent of the, money was gone it has gone through payroll costs could be adjustments, made for that you. Know Charles I think. There's scaling. In this so. Those. Formulas, 75 percent 25 percent if. I'm not mistaken are, adjustable. So the, the loan or the degree of loan, forgiveness, can. Be adjusted, if there, are certain exigent, circumstances. Whereby. They don't want to put 75, percent. Certain there's scaling, or prorating, up and down again. I'm not the inventor, of all these details but I'm pretty sure and I, just want to come back to this point. About. President. Trump's growth, policies, which were such a great success. What. We're facing now is, just. About I've been around a long time my friend and I've never seen anything like this but, those. Growth policies, on taxes, and regulations, and trade and oil and so forth they. Don't go away they're. Still the, foundation, of an economy, that's been rebuilt and Riaan Santa buys and we're showing tremendous growth, what we're looking at here I hope. Will be a two-month, gap. Interference. If you will March and April all, right in. The next month or two, we, should be able to restart, at least on a rolling, basis.
And Our. Whole, intent, here, was is, to try to relieve people, of the. Enormous, ly difficult, hardships, they are suffering through no fault of, their own and, that's. The thrust of our policy, and I don't Charles I don't know if that supply-side or, cane what, I think it is is good common. Horse, sense ok, that's anybody, I hope would, have done this and I want to add one more piece to it please. Marking. The president's. Views. He. Is involving. The private, sector, every. Step. Of the way I mean, so the point made earlier about over-regulation. This. Is a government, driven. Operation. But-but-but-but-but, we. Have used experts. You know retailing. Pharma. Biotech. Banking. We've. Got manufacturers. Who used to produce cars, and now they're producing respirators. And ventilators, you follow me we are using the, private this, is a public-private, partnership, this. Is a public-private. Rescue. Mission to, help folks who need help for from, circumstances, external, circumstances, were no fault of their own and nobody's, ever done this before this is not just, another government operation. This is a partnership and that consistent, with President Trump's own philosophy. Of the importance, of a free enterprise economy I gotta, tell you Larry that's been one of the more, amazing hallmarks. Of this how quickly, the. The administration, was able to galvanize, the the, private sector, for their expertise. While, doing things that that they couldn't do with the government and the government's checkbook, and again, the idea I think is it's it's all a burble it's been amazing without. Question but for. Some of these folks that the idea is just how do we take advantage of this how do we live through those next eight weeks I've got a question from Dave Pia about his business let's, take a listen we. Have, a hair salon and, my. Problem, is how do i incentivize, my team to come back in to. Service guests, when the stimulus package is benefitting them so well that they're, not in a hurry to return, and. In order to get the grants forgiven. We, have to hire the, employees. Back. Which. Is going to be a challenge, so my question is how do we how do we get them back Larry. May, be unintended, consequences. But unemployment benefits. Now averaging, over $900. That's, a whole lot more weekly. Than a lot of people were making and so, a lot of people were just saying hey let. Me go for the unemployment, benefits and that puts these small businesses in a heck of a gym, I, understand. That issue, but. And. I I don't, have a magic solution here's, what I would say we. Plussed up the unemployment, benefits, that. Was part of a bipartisan. Deal and it was important, to go bipartisan. That. Plus up is four, months and you. Know hopefully and prayerfully. This. Virus. Will. Be basically gone and we will be closer, to normal but, the president calls no morality so I think. The small plus up in unemployment benefits will, not interfere with incentives, to work I. Don't, believe that we. Had the most extraordinary increase. In jobs. And decline, in unemployment across. The board as you know I called it the blue collar boom. Middle. And lower middle income people were, the biggest winners in the, Trump economy, up. Until a few weeks ago. I think. When you look at things like the employment to. Population ratio, which, have been rising you, know you look at the tremendous, increase, in. Female. Workers. And minority, workers and so forth you you know we've talked about this before. Those. Values. And efforts, are not going to stop just. Because we're, trying to take care of folks for a couple of months I really, think you, if. It were on going on for years and years that would be a big problem and past, administrations. Have made that mistake the, president, understands, the incentive, model and he understands it's got to pay to work but, just hear, me on one, additional, point I think I, may be wrong Charles and I can't prove this statistically. But I think in recent. Years the, extraordinary. Increase, in jobs and. Deployment. Has. Really. Made, folks. Come. Back, to work, millions, it like look, it it's. Like for, a whole bunch of years you, could see it in the labor numbers people didn't want to work and I. Think if, I may it's cool to, work your. Neighbor your. Your, your brother-in-law, you, know the guy down the street working. Has become, cool again if, you looked one of my favorites, was the Millennials, the Unser's their, participation. Rates and their job increases, were phenomenal before.
This Virus, came. In and you, know me I also think, work as a virtue and I think work is a godly, virtue as well but I believe. It it's, been cool to work and people gonna want to come back I worry I agree, and it's a small business owner myself whose average employee has been with me 25, years there's. Got to be a relationship, a special relationship with these folks understand, what we're going that's a great point that's a terrific point right yes absolutely, that's the way our society works, okay, we take care of each other you're exactly right Charles, I want to bring in a question from one of our panelists, Jean marks so, Jane, have. You had the floor thanks. Hey Larry thanks. For coming on and and look with all the trillions of dollars that's being spent right now rightly spent by, the administration. You. Know how, will, this get paid, for will, small, biz owners be, expecting. To see in the future much. Larger deficits, higher, interest, rates higher inflation should, we be planning for that what are the plans to fund this, I'm. Not sure I heard the first part of a question I would say right now. The. Threat of inflation, is nil, and. Rising. Interest rates I mean I, suppose. I'll deal with that. When. And if it happens, I mean. Right now those are just not issues right now the issues, are a. Sinking. Economy, because of this virus a terrible, contraction. And. Deflation. Not inflation, so. I just, you know rates. I suppose will go up at some future point but I just I'm not even thinking about that right now here's what I would say I believe, you mentioned deficits, it wasn't coming through as clear in my, ear but look, I think the. Prudent, business. Decision. Right now, is. To take advantage, of record, rock-bottom interest, rates and. Borrow. Some cash in the open market in. Order to invest in, America. To. Invest in small, businesses to. Invest in unemployed, temporarily. Unemployed, people, in other, words to invest, in those folks who have been badly, hurt by, something that was not of their own making I think that is the prudent business, decision, in other words the, low, low cost of, borrowing is going, to generate a high high, rate, of return in. Terms of future growth and jobs, and opportunities. In the United States, that's the way I look at it Larry. A final. Question and again I appreciate the time that you've taken with us but, we cannot talk about the coronavirus, and not talk about China I've got a question from John Emma. What. Can we do to dramatically, reduce if not eliminate our. Dependence, on China with. Something like a Marshall, Plan in concert. With our close allies, help. Us achieve such a goal very. Well. Okay. I don't. Want it I don't want to pick, on China right now it's, not high on my list we, are aware the. United States is aware. Of, certain. Issues with China, we, have engaged with them we have a good, trade deal the president negotiated with, them but there are issues we'd. Like more American, companies to come back home. We'll. Deal with that over a period, of time but. We are engaged with China and the president, continues to enjoy a very, good relationship, with President Xi as far. As policies, to get the companies, home a lot, of things we could do one of them by the way we don't have time to pursue it Charles maybe the next time I would, say 100. Percent immediate. Expensing. Across-the-board. Plant. Equipment. Intellectual. Property, structures. Renovations. In other words if we, had a hundred percent of media expensing, we, would literally literally, pay, the, moving, costs, of American. Companies, from China back to the US we would basically provide. Them with, moving, costs payments, that's one way that's not the only item on the list but I think a hundred percent expensing, would be a very good thing and by the way it would be very good thing for American. Companies here. At home so that's, just one pro-growth. Policy, point. Larry. I just, cannot thank you enough we, really appreciate, what the administration, is doing we understand, this is a monumental, challenge never, faced. By any president or an administration, in the history of America.
You Guys are doing an amazing job we, appreciate, your time and we hope to hear from you again real soon thank you thanks, Charles appreciate.