May 8, 2020 / 10:35 PM / 21 days ago

Fed's Kashkari says rescue aid should be targeted to make it last

(Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari on Friday said the U.S. government should funnel aid to those who need it most so that its funds can last the one to two years it will take before the coronavirus pandemic can be brought under control and the economy can fully revive.

“The government has the resources to support this economy through this period,” Kashkari said in an interview on PBS NewsHour. “The more we can focus it on those who need the most assistance, the longer we will be able to do it.”

Congress has committed about $3 trillion in emergency funds since cases of COVID-19 began mounting in the United States about two months ago, and authorities shut down businesses and had people stay home to slow the spread, leading to record job losses.

Some of the rescue money was earmarked for specific goals, like vaccine development, testing, and a controversial bailout fund for the airline industry. But much of it was aimed at reaching a broad cross-section of households and businesses to help them weather what at first looked like would be a sharp but short downturn.

“We have to spend whatever it takes to support vaccine development and therapy development and widespread testing,” Kashkari said in the interview.

Businesses that can reopen safely, with workers wearing masks and spaced six feet apart, should do so, Kashkari said. “If we start to shift towards targeting the assistance toward those who are most vulnerable, I think we will be able to get into a place where we can sustain this for a year or two, because we are going to need to be able to sustain it for a year or two.”

Reporting by Ann Saphir; Editing by Sandra Maler and Rosalba O'Brien

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