Congress under pressure to rush money out the door to households to prevent deep coronavirus recession

Congress is under pressure to pass a major tax cut to address not just the immediate dislocations caused by the coronavirus pandemic but also the hit to medium-term commerce that would result if fear becomes self-reinforcing and leads to a pullback in spending and investment plans.

President Trump is calling on Congress to enact a payroll tax holiday, which would amount to a roughly $807 billion tax cut, according to the Penn Wharton Budget Model — far bigger, in annual terms, than his 2017 tax cut. "Only that will make a big difference!" he tweeted Friday.

A tax cut that size would be a fiscal stimulus on the scale of President Barack Obama's 2009 stimulus bill, which was enacted in response to the biggest financial crisis since the Great Depression.

The point would not be to undo the damage caused by sick people unable to show up for work. That is what economists refer to as a "supply-side" shock, one that the government cannot address through fiscal policy. Indeed, it is likely better in the long run for commerce to slow down in the short term to prevent the further spread of the virus.