(Bloomberg) -- President Donald Trump promised to announce "substantial" economic measures on Tuesday to combat the fallout from the coronavirus, including aid for the airline and cruise industries, yet continuing uncertainty about the details led early gains on Wall Street to fade.
Trump's economic steps -- which could include a payroll tax cut and paid sick leave -- haven't been communicated to Congress yet, though he is dispatching his top aides to start pitching the measures on Capitol Hill. The president, speaking at a White House meeting with insurance executives, said his administration will provide assistance to cruise lines and airlines, without offering details.
"We're going to be helping that industry," the president said of cruise lines. Speaking of the airlines, he said: "We'll be helping them through this patch."
Trump is expected to join Senate Republicans at their private policy lunch Tuesday, according to a person familiar with the plans.
The S&P 500 index jumped more than 3% at the open and then pared gains as investors digested Trump's announcement. U.S. stocks plunged more than 7.5% on Monday -- the worst day on Wall Street since the financial crisis -- as a full-blown oil price war rattled investors already on edge over the outbreak.
'Massive Global Outbreak'
The markets retreated after Robert Redfield, director of the Centers for Disease Control and Prevention, told lawmakers that the U.S. was moving beyond containment of the virus in some areas to focusing on mitigating its impact on those areas.
"This is a massive global outbreak," Redfield said.
The president dismayed some officials with an announcement during a Monday press briefing that he would unveil a plan in 24 hours, as they wanted to take the plan to lawmakers first.
Trump on Tuesday attacked House Democrats over their plans to be on recess next week when he's planning an economic proposal that would need congressional approval. The GOP-controlled Senate also will be out of session next week.
"It's off to vacation for the Do Nothing Democrats," Trump tweeted. "That's been the story with them for 1 1/2 years!"
House Speaker Nancy Pelosi hasn't made any commitments to voting on virus-related legislation this week.
"We can introduce this week," Pelosi told reporters Monday night, "and we may be ready this week" depending on how quickly the Congressional Budget Office can estimate the cost of proposed legislation.
It was, in large part, the market crash that pushed the White House into action on Monday, according to people familiar with the matter.
The compounding impact of the coronavirus, an oil price war and slumping markets may trigger a downturn in the next year. The latest reading for Bloomberg Economics' U.S. recession probability model shows the chances rising to 53%.
As outlined by Trump, the proposal will likely include a payroll tax cut and a short-term expansion of paid sick leave, according to the people, who described the plan on condition of anonymity ahead of its planned release on Tuesday.
Treasury Secretary Steven Mnuchin on Tuesday will speak with Senate Republicans about the plan. A payroll tax cut requires legislation, while paid sick leave may be implemented through executive action, the people said.
Both Republicans and Democrats have agreed to take quick action to respond to economic disruption from the virus. Congress last week approved about $8 billion to combat the spread of the virus, and lawmakers said they were ready to spend more if necessary.
Elements of the package could still shift, including the payroll tax changes, which drew opposition late Monday from Richard Neal, the chairman of the tax-writing House Ways and Means Committee, as well as other Democratic congressional leaders.
While Trump has been pointing to the Federal Reserve as the front line, economists have stressed that the crisis will require a multi-faceted response from governments, health-care professionals, central bankers and others to stem the human and economic damage.
The measures emerged following a tense meeting Monday of Trump's top advisers in a bid to contain the widening fallout from coronavirus and tumbling oil prices, the people said.
About a dozen officials, including Mnuchin and economic adviser Larry Kudlow, hashed out the details before Trump. Peter Navarro, the president's trade adviser, urged sweeping measures, including a payroll tax cut, while Mnuchin recommended more targeted steps.
The Treasury chief opposed going to Congress on the payroll tax cut, two of the people said. Details for such tax relief are preliminary and would have to be worked out with lawmakers, they said.
On paid sick leave, Tuesday's announcement will most likely lay out an option that targets hourly wage workers who are quarantined because of the coronavirus, they said. The measure may be executed through executive action rather than through legislation.
Until Monday, Trump and his administration were sticking to their message that the American economy was in a strong position to weather any fallout from coronavirus, but the dramatic market drop shifted their position, the people said.
Trump, speaking at a White House news conference Monday, said that he plans to announce "very dramatic" actions to support the economy at a news conference on Tuesday, following discussions with lawmakers. "I will be here tomorrow afternoon to let you know about some of the economic steps, which will be major," Trump said.
Trump said he wants to help hourly wage earners who could lose pay by staying home "so they don't get penalized for something that's not their fault."
--With assistance from Billy House and Daniel Flatley.
To contact the reporters on this story: Saleha Mohsin in Washington at firstname.lastname@example.org;Jennifer Jacobs in Washington at email@example.com;Justin Sink in Washington at firstname.lastname@example.org
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