Stimulus as a bridge to extensively used Covid vaccines
CNBC’s Jim Cramer on Tuesday called on Congress to swiftly pass another coronavirus stimulus bill. Important parts of the economy need help until Covid-19 vaccines are widely used.
“We’re so close to getting this economy going again, but these places that are so close can’t flip a switch and open it again. It’s just a way of life. You can’t,” Cramer told Squawk on “the street.”
Cramer’s comments came shortly after legendary investor Warren Buffett urged Washington to extend the Paycheck Protection Program, a vital small business lifeline that Congress created at the start of the coronavirus pandemic. But the PPP loan application window, which closed months ago, and other stimulus measures such as a government supplement to unemployment insurance have also expired.
“I think the country owes it to the millions of small business owners … just renew the PPP and get us to the end of the tunnel,” Berkshire Hathaway chairman Buffett said on CNBC’s Squawk Box on Tuesday.
However, Congress has been in a stalemate since the summer over additional relief, despite the pandemic continuing and new waves of business restrictions introduced by state and local officials in the fall to help contain Covid outbreaks.
Democratic and Republican leaders in Congress hope to pass coronavirus aid and a funding package before state funds are depleted on Saturday. A non-partisan group of House members and Senators released a $ 908 billion stimulus proposal Monday that they hope can serve as a roadmap for action.
“How can the government not agree to funding [businesses] until we get vaccines? “Cramer said the day after the first US healthcare workers received the Covid vaccine from Pfizer and BioNTech.
“What is amazing to me is that … Warp Speed really worked. Warp Speed was great. It kind of shocked everyone,” added Cramer, referring to the Trump administration’s vaccine development program. “And now Congress should be able to say, ‘We love warp speed. It’s great and we’re going to build a bridge to warp speed. We’re going to put money in people’s pockets.'”
While the availability of the vaccine is expected to increase in the coming months, allowing more Americans to be vaccinated, the host, Mad Money, pointed out restaurants and other small businesses in the service sector as areas that need relief now.
“We’re not a country where everyone works in steel mills every day, but we’re a country where a lot of people work in restaurants and the hospitality industry,” said Cramer, who temporarily closed his own New York restaurants this fall due to the pandemic.
He added, “It’s a gigantic industry in this country, in this service economy,” where consumer spending accounts for more than two-thirds of economic activity in the US
In January, according to seasonally adjusted figures from the Bureau of Labor Statistics, about 12.3 million Americans were employed in food and drink establishments. In November, 10.2 million people were employed in this category.
“I think Congress is pretending ‘you know what, it’s fine. We can wait a few months,'” said Cramer, emphasizing the urgency. “It’s not like that.”