Mnuchin urges fast fed relief
Bernanke, Yellen join in calls for robust aid package
Treasury Secretary Steven Mnuchin urged Congress Friday to quickly enact a new pandemic relief package targeting hardest-hit swaths of the economy, as lawmakers race to stand up federal aid.
Deadlines loom as the $600 weekly federal benefits now received by tens of millions of unemployed workers are set to expire July 31.
Mnuchin, the Trump administration’s chief negotiator on economic relief, told a House hearing that Congress should pass a new rescue package by the end of the month. Set for partisan negotiations next week, it would be the fifth virus relief bill since the spring, when Congress dispensed and President Trump approved nearly $3 trillion in emergency aid.
“We anticipate that additional relief will be targeted to certain industries, smaller businesses and lower- to middle-income families that have been especially hard-hit by the pandemic,” Mnuchin said. “Our focus will be on jobs and getting all Americans back to work.”
With the economic picture bleak, former Federal Reserve Chairs Ben Bernanke and Janet Yellen urged Congress to do more to help the economy deal with the devastating pandemic, such as extending increased unemployment benefits and providing assistance to hard-hit states and local governments, something many Republicans oppose.
The two former Fed leaders, making their first appearances Friday before a congressional panel since leaving the central bank, praised the efforts already made by the Fed and Congress but said both should be ready to do more given the severity of the shock the economy has endured.
Democrats and Republicans on the committee clashed over the Trump administration’s response to the virus, what the next package of support should look like and whether schools should be required to re-open in the fall.
Yellen and Bernanke, in a joint statement, said the new measure should provide substantial support to state and local governments. The administration and many GOP members of Congress are arguing for spending restraint, saying the federal government should not be bailing out states.
But Yellen and Bernanke said, “The enormous loss of revenue from the recession, together with the new responsibilities imposed by the pandemic, has put state and local budgets deeply in the red.”
The two maintained Congress needs to avoid the mistakes made during the Great Recession ten years ago when state and local governments did not get adequate support, making the downturn worse and the subsequent recovery painfully slow.
The new relief legislation is expected to extend the $660 billion emergency loan program for small businesses with new funding of around $300 billion. But the new loans under the Paycheck Protection Program should be awarded on a more focused basis, Mnuchin said.