US government proposes $1.6 trillion debt recovery solution
The US government on Tuesday proposed a $1,600-per-year debt recovery plan for the $4 trillion U.S. economy that it hopes to attract as lawmakers move to extend tax cuts.
The plan, released in a blog post by the Treasury Department, calls for a $2,500-per $3,000 payment each month for two years to help households and businesses recover their debts.
The money would be used to pay for consumer- and business-backed loan repossessions, business retrenchment and other programs.
It would not be used for new government programs, such as tax cuts or stimulus measures, the department said.
The proposal is expected to draw bipartisan support, with Republican lawmakers likely to support it, Treasury Secretary Steven Mnuchin said in a statement.
It also has been welcomed by the Federal Reserve, which is pushing to reduce interest rates to below zero and boost the economy.
Mnuchin said the plan is not a final decision and could be changed before it goes to Congress for approval.
“We will look to the committee and see if we can make some modifications, or if it’s better to go to the Senate and do a full vote,” Mnuchin told reporters in Washington.
The White House said Tuesday that Mnuchin was also considering a similar proposal from the Federal Emergency Management Agency that has also drawn bipartisan support.