Pedestrians wearing protective masks walk by a sign displayed outside a retail store in Harlem, New York City, saying it’s going out of business.
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SINGAPORE — The U.S. needs around $3 trillion in fiscal stimulus to support its pandemic-hit economy, an economist said Thursday as Congress and the White House remain in a stalemate over what to include in the next relief package.
William Lee, chief economist at Milken Institute, said the $3 trillion should be spent on programs such as incentivizing businesses to increase remote working capabilities and helping the unemployed find jobs in companies with viable business models.
“I think the one thing that everyone … agrees with is we have to get in there and get in big. The issue is how do you get big without a permanent increase in fiscal deficit,” he told CNBC’s “Squawk Box Asia.”
“That’s why the programs that are put in place have to be targeted and designed in a way so that they disappear once the economy comes back online again,” he added.
But disagreements between Democrats and Republicans on what programs to fund have contributed to the impasse over passing another stimulus bill in the U.S.
In another attempt at resurrecting a coronavirus relief bill, the Republican-led Senate will vote on a new package as early as this week — but is unlikely to get the 60 votes needed to get through the chamber or receive support in the Democratic-led House.
The U.S. has reported the world’s highest number of Covid-19 cases and death toll, according to data compiled by Johns Hopkins University. As of Thursday morning, more than 6.3 million infections have been reported in the U.S. with over 190,000 deaths, the data showed.
Lockdown measures to contain the virus led the U.S. economy — the largest globally — to tank 31.7% on an annualized basis in the second quarter. That’s the country’s worst-ever quarterly plunge in economic activity.
That’s why further fiscal stimulus is important but American politicians “seem not to be able to hear that message,” said Lee.
“Every penny helps and the danger is that these guys will fiddle around to try to redesign the program to really meet some perfectionist criteria that shouldn’t be,” he said.
“We have to get the money out there and we have to get it out there now.”
— CNBC’s Jacob Pramuk contributed to this report.