Welcome to the Weekly Scan. Here’s what we’re following for the week of March 23, 2020.
Make sure to check back during the week as we update these stories.
Bailout gridlock ends: Congressional leaders negotiated a deal on a $2 trillion economic stimulus package, which is expected to pass on Wednesday, March 25. The bailout package would be the largest in U.S. history. Of the $2 trillion stimulus, approximately $250 billion would go to individuals and families, $350 billion would go towards loans to small businesses, $250 billion would go towards unemployment benefits, $130 billion would go to hospitals, and $500 billion would go to struggling businesses. An oversight board would manage how the money is allocated, according to the new bill. Any businesses owned by President Trump or his family would not be allowed to benefit from the stimulus. Congress is looking for a way to vote on the package as some members are in quarantine because of the coronavirus. CNN.
Earlier in the week, congressional leaders had reached an impasse on a $1.8 trillion bailout bill for the economy. At issue for some lawmakers was the lack of oversight for how businesses would spend the money destined for them, and questions about whether workers would be protected from layoffs, as an unprecedented amount of money is slated to flow to businesses and in tries to keep them afloat. The economic relief package included billions of dollars for direct payments to consumers, $500 billion in bailouts to businesses, city and states, and an additional $350 billion in loans to small businesses, among other things. New York Times.
The Fed gets busy: The nation’s central bank said Monday it would commit an unlimited amount of money to keep the financial system solvent. That includes purchasing nearly $1 trillion in Treasurys and mortgage-backed securities.
In mid-March, the Fed cut its benchmark federal funds rate, which is a short-term rate that it charges banks to borrow and lend money to one another. The federal funds rate forms the basis of other interest rates, such as for credit cards and variable rate mortgages, and the interest on savings accounts. The rate is now between 0% and 0.25%, down from a range between 1% and 1.25% in early March. The Fed is also planning to purchase $700 billion worth of U.S.
Insider trading on Capitol Hill?: Two U.S. senators may have tried to profit from the Covid-19 pandemic by selling shares based on non-public information about the growing pandemic.
Senator Richard Burr (R-N.C.) and Kelly Loeffler (R-Ga) face criticism for selling millions of dollars worth of shares in businesses most affected by the virus. Burr sold 33 stocks in February, reportedly following Senate Intelligence Committee and Senate Health Committee briefings about the coronavirus and its threat to the United States. The sales, which were worth between $628,000 and $1.7 million, included shares in the hotel industry, which has struggled with cancelations in the wake of the pandemic.
Similarly, Loeffler sold 27 stocks in companies including Exxon Mobil, Ross Stores, and AutoZone. Loeffler’s sales were reportedly worth millions of dollars. Loeffler also purchased between $100,000 and $250,000 in stock of Citrix, a tech company that provides software for working remotely, and whose stock has risen since the crisis.
Other senators with potential insider information who traded smaller amounts around the same time include Dianne Feinstein (D-Calif.) and James M. Inhofe (D-Hawaii). New York Times and The Daily Beast.
PG&E pleads guilty: Pacific Gas and Electric Corporation (PG&E), Northern California’s power company, will reportedly plead guilty to involuntary manslaughter in the November 2018 Camp Fire blaze, the deadliest and most destructive fire in California history. PG&E has been charged with involuntary manslaughter of 84 people and unlawfully causing a fire after a piece of its electrical equipment allegedly broke free and started the fire.
Last year, PG&E filed for bankruptcy due to financial liabilities from the Camp Fire and other fires in 2017 and 2018. PG&E provides electricity and gas to 16 million people in California. It employs 20,000 people. Wall Street Journal.
Find out what we covered in last week’s Weekly Scan.