WASHINGTON — The Trump administration on Wednesday put the full machinery of government behind its response to the coronavirus pandemic as it proposed the first details of a $1 trillion economic stabilization package, asking Congress for an extraordinary infusion of $500 billion for direct payments to taxpayers and $500 billion in loans for businesses.
President Trump invoked a seldom-used wartime law that allows the government to press American industry into service to ramp up production of medical supplies. He said he would send two military hospital ships to New York and California. He directed federal agencies to suspend all foreclosures and evictions until the end of April as the full economic toll of the crisis began to set in in the United States and around the world. And he agreed with Canada to stop all nonessential traffic across the northern border.
After weeks of playing down the outbreak, Mr. Trump appeared on Wednesday to fully embrace the scope of the calamity, saying he saw himself as a wartime president and invoking memories of the efforts made by Americans during World War II.
“Now it’s our time,” Mr. Trump said at a news conference at the White House. “We must sacrifice together because we are all in this together, and we will come through together. It’s the invisible enemy.”
The prospect of escalating government intervention fell far short of reassuring investors. Markets erased Tuesday’s gains and plummeted to new lows, as reports of mass layoffs steadily reached Wall Street and Ford, General Motors and Fiat Chrysler all said they would temporarily shutter their plants in the United States.
The S&P 500 declined nearly 5 percent, wiping away nearly all of the gains made during Mr. Trump’s presidency on another day that saw an automatic 15-minute halt in trading to prevent a stock market crash. Oil prices and European stocks were also sharply down. And the New York Stock Exchange announced it would temporarily close its trading floor for the first time in its history and move fully to electronic trading after two people there tested positive for Covid-19.
Even as Mr. Trump unveiled his aggressive plan, it was not clear how quickly it could have an effect. Just hours after the president announced his order to dispatch two military hospital ships, a Pentagon spokesman said deployment would not be possible for at least two weeks because one of the ships, the Comfort, is currently undergoing repairs in Norfolk, Va. The other ship, the Mercy, will deploy more quickly.
Though he triggered the Defense Production Act, a Korean War-era law that authorizes the president to take extraordinary action to force American companies to help produce material — like respirators, ventilators and protective gear for health workers — needed for national security, Mr. Trump said he was doing so now “just in case we need it.”
He also continued to refer to the disease as the “Chinese virus,” brushing off questions about whether the phrase was racist.
On Capitol Hill, Congress was racing to negotiate a swift agreement on the administration’s $1 trillion request and marry it with proposals flooding in from lawmakers, interest groups and industries. But with vast amounts of money on the line and bipartisan agreement necessary to pass anything into law, it was not clear how quickly the talks could proceed. With the memory of past bailouts fresh in their minds, lawmakers were toiling to ensure that any rescue plan would contain accountability measures for the businesses that received government aid.
After days of delay, senators voted overwhelmingly to give final approval to a relief package passed last week by the House that would provide paid leave, enhanced unemployment benefits, free coronavirus testing as well as food and health care aid. The vote was 90 to 8, with two senators not voting because they were in quarantine after coming into contact with people infected by the novel coronavirus.
Mr. Trump was expected to quickly sign the bill, which early estimates suggest could cost several hundreds of billions of dollars. But that emergency package — considered a mammoth response to the virus when it was initially drafted only a week ago — was already being eclipsed by the emerging $1 trillion stabilization plan as the damage wrought by the pandemic coursed throughout the global economy.
The number of confirmed cases of coronavirus in the United States shot past 8,000 by Wednesday evening, and deaths related to the disease rose to at least 143, fueled largely by an explosion of new cases in New York. Officials warned that the numbers would continue to rise as much-delayed testing ability ramped up in the coming days.
For the first time, the legions of infected Americans included a sitting member of Congress, Representative Mario Diaz-Balart, Republican of Florida, who was on the House floor as recently as early Saturday morning voting on the virus relief bill with fellow members. In a statement, he said he had begun to develop symptoms later Saturday and received a positive test result on Wednesday.
Deborah L. Birx, the administration’s coronavirus response coordinator, issued a grim warning to the nation’s millennials, pleading with them from the White House briefing room to avoid large gatherings and to take the disease seriously amid new evidence that young people in Italy and France had become “very seriously ill” from it.
Having moved on Tuesday to wall off the southwestern border, the president announced his agreement with Canada to do the same to the north. The decision effectively closed off the United States from the rest of the continent, as Mr. Trump’s government and those around the world sought to control the spread of the virus. Separately, the State Department said it would temporarily stop issuing visas to foreign travelers.
Belgium became the latest country to lock down all but essential businesses. Italy, already ravaged by the pandemic, recorded its single deadliest day yet, with total fatalities connected to the virus approaching 3,000 and threatening to surpass China’s reported totals.
In Washington, the primary focus was on Congress, where lawmakers rushed to produce a stabilization plan large enough to prevent the country from teetering into economic collapse.
With many of its own members at elevated heath risk from the virus and bracing for potential travel restrictions, the Senate may have only a handful of days to ink a deal before leaving town for what could be an extended recess. And though the House is not in session and has not scheduled a return to Washington, many of its members were ready to fly back into town if there was a deal.
Senator Mitch McConnell, Republican of Kentucky and the majority leader, said his party was coming close to an agreement with the White House and could begin talks as early as Thursday with Democrats, whose support would be needed to pass anything into law.
“Republicans hope shortly to have a consolidated position along with the administration, then we intend to sit down with our Democratic colleagues to see what we can agree to,” he said Wednesday afternoon. “Just how long it will take to get through these steps is unclear, but as everyone knows, we are moving rapidly because the situation demands it.”
In a conference call with Democratic leadership and committee chairs on Wednesday afternoon, Speaker Nancy Pelosi said she was pushing for a bipartisan negotiation between House and Senate leaders that could yield a final agreement on the next economic rescue package by early next week.
The administration’s proposed relief package, outlined in a document circulated to lawmakers and lobbyists, called for the authority to send two waves of checks, each totaling $250 billion, directly to American taxpayers, the first on April 6 and the second on May 18. Payments would be fixed and their sizes dependent on income and family size, the summary said, in line with a proposal by Senator Josh Hawley, Republican of Missouri.
It would extend loans to small businesses equaling six weeks of their payroll up to $1,540 per employee, on the condition that the companies must keep paying their employees for eight weeks after receiving the loan. It also called for $50 billion for secured loans for the airline industry and another $150 billion for secured loans or loan guarantees for other sectors of the economy that have been devastated by the global economic shutdown as the virus spreads.
Under the plan, the Exchange Stabilization Fund, an emergency reserve account that is usually used for intervening in currency markets, would cover the costs of the secured loans to airlines and other industry players. The fund would also temporarily be allowed to guarantee money market mutual funds.
“We’re going to provide whatever economic aid we need to this economy,” Treasury Secretary Steven Mnuchin said on CNBC. “There are a lot of great companies that were great companies a month ago; they’re going to be great companies three months from now, six months from now — whatever it is.”
Mr. McConnell has insisted the Senate will not leave town until it finishes the emergency stabilization package, but the desire for speed may not guarantee that talks go smoothly. Republican senators unhappy about various provisions of the smaller relief bill passed by the House last week are likely to continue to haggle over costs and specific details of anything the chamber puts together.
Congress already passed an initial $8.3 billion package of funding for the government health agencies responding to the novel coronavirus, which Mr. Trump signed earlier this month.
On Tuesday night, the White House sent a new $45 billion request for agencies on the front lines. That request included an additional $8.3 billion for the Defense Department; $5.3 billion for the emergency preparedness and response agency at the Department of Health and Human Services; and $13.1 billion for the Department of Veterans Affairs to cover health care treatment costs, testing kits, temporary intensive care unit beds and personal protective equipment.
Senate Democratic leaders have put forward their own $750 billion plan and would have to lend at least some support to any package for it to pass the Senate.
“There are many things in this bill that are important, like no payment on student loans or mortgages, help with our mass transit systems — there are many things — and Democrats are going to fight for them in the next phase of response,” said Senator Chuck Schumer of New York, the Democratic leader, said of his proposal.
Ms. Pelosi and her lieutenants were working on their own proposals for the next round of economic help that would most likely be different from the Senate’s. Democrats in both chambers, frustrated with the administration’s push to narrow paid leave provisions in their relief bill, have indicated that they will push to expand the benefit in the next package.
Reporting was contributed by Thomas Gibbons-Neff, Alan Rappeport, Catie Edmondson, Lara Jakes and Carl Hulse.