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While Republican and Democratic leaders say they’re close to a deal on a coronavirus bill, analysts are stressing the latest legislative effort isn’t designed to deliver a big boost to the economy or markets.
The bill — which the Democratic-led House was expected to pass on Friday — is aimed at providing paid sick leave for people affected by the novel coronavirus causing the disease COVID-19 and free testing for the disease, among other measures. A key sticking point has been how to structure any paid sick leave, with Republicans insistent on a temporary program.
“Investors should be aware that this package is the ‘disaster relief’ and [that] the fiscal stimulus that Wall Street is hoping for remains elusive,” said analysts at Beacon Policy Advisors in a note Friday.
“It remains unclear what that stimulus package would look like. Democrats have rejected the payroll-tax cut, at least for now, and Senate Republicans and even some administration officials are trying to distance themselves from anything that can be perceived as a TARP-style bailout,” the analysts added, referring to 2008’s controversial Troubled Asset Relief Program.
The negotiations over the latest legislation have come as congressional offices were hit this week by their first confirmed case of COVID-19, with an aide to Sen. Maria Cantwell of Washington testing positive. The Capitol building and all congressional offices will be closed to the public until April 1.
“By the time Congress enacts something, it will be too late to stop the economic pain from the increasing implementation of virus mitigation measures, such as closing schools, teleworking and canceling large gatherings,” Beacon’s team said.
Related: Mnuchin says broad economic response to coronavirus will have to wait, backs smaller plan
And see: Trump and Democrats both say workers affected by coronavirus pandemic should get paid sick leave
U.S. stocks SPX, +1.12% DJIA, +1.11% embarked on a comeback attempt Friday but have been hammered this month by coronavirus-related worries. The reviews on Wall Street of Trump’s Wednesday-night Oval Office speech on the outbreak were not positive, with analysts criticizing him for seeking to shift blame to Europe and for proposing a “vague payroll-tax holiday.”
Last week, Trump signed into law a preliminary $8.3 billion measure to help tackle the coronavirus.