Key House chairman predicts 'negative interest rates' possible amid pandemic

Rep. Peter DeFazio (D-Ore.), the powerful chairman of the House Transportation and Infastructure Committee, told Just the News that the U.S. “may not be that far away from” negative interest rates amid the coronavirus outbreak.

The Federal Reserve has announced that it is going to pump $1.5 trillion into the U.S. economy.

“It's a short term debt. I don't know what that means and obviously, as I walked out, the market was down 2300 so they didn't accomplish their goal,” DeFazio said Thursday on Capitol Hill as Congress continued negotiations on a coronavirus relief package.

“We need to focus on the health of the American people and the problems that individuals are going to have if they get laid off or they're in jobs that don't have that kind of coverage -- that's what we want to do today,” he added.

After Congress passes an economic relief package in response to the coronavirus, DeFazio recommended the federal government consider a bigger economic recovery package.

“The best thing we can do longer term is finally rebuild our infrastructure and, you know, get virtually free money. I mean, in Germany right now, people are paying the government to hold their money, negative interest rates, we may not be that far away from that,” he said.

DeFazio slammed President Trump’s proposal for a payroll tax cut in response to the toll that the coronavirus outbreak has taken on the economy.

“The payroll tax cut is useless. Obama did it -- didn't put anybody back to work -- that was Larry Summers' stupid idea and I draw a line in the sand there. What they're negotiating right now is a package targeted toward the individuals most at risk; people who work in jobs without sick leave; people who don't have health insurance,” he said.

“People who are food insecure. When the schools shut down, a lot of kids in my district are dependent upon, I mean, they come to school hungry and they need to keep the lunch programs going so that is the democratic package that's proposed,” he added.

DeFazio said a payroll tax cut is “abysmally stupid” because it would direct money away from the Social Security Trust Fund.

“It's regressive in that the higher your income, the more money you're going to get back. So targeted relief is better and then yesterday I was in a series of meetings that we're hopeful treasuries will be less than 1 percent by May,” he said. “It's time to borrow a lot of money, rebuild the nation's infrastructure and put people really back to work.”