Mnuchin, Powell differ on recovery
Mnuchin: Next focus is service industry. Powell: ‘Keep virus in check.’
Treasury Secretary Steven Mnuchin told Congress on Tuesday that the administration wants the next round of economic aid to focus supporting businesses like restaurants that have been hardest hit by the coronavirus crisis.
Mnuchin said he is already talking to lawmakers about getting another round of relief approved by the end of July. He said those discussions included ways to use leftover funds from the $2.2 trillion coronavirus relief bill signed by President Donald Trump in March.
There is about $128 billion in that program that has not been doled out from the popular Paycheck Protection Program, which was designed to help businesses keep their workers on the payroll.
The program, which had $659 billion to use to support small businesses, will no longer be able to extend loans after Tuesday unless Congress approves an extension.
Mnuchin said that the administration is committed to “working with the House and the Senate so we can pass legislation by the end of July.”
“We are in a strong position to recover because the Trump administration worked with Congress on a bipartisan basis to pass legislation and provide liquidity to workers and markets in record time,” Mnuchin told the House Financial Services Committee.
The House has passed the Heroes Act that would provide an additional nearly $1 trillion of economic support. That act has not been taken up by the Senate. Mnuchin testified along with Federal Reserve Chairman Jerome Powell at the oversight hearing held by the House panel.
The coronavirus rescue package, known as the CARES Act, requires both Mnuchin and Powell to testify before Congress on a quarterly basis on the legislation’s implementation.
Powell said that the outlook for the economy is “extraordinarily uncertain” at the and that a full recovery is unlikely “until people are confident that it is safe to re-engage in a broad range of activities.”
“We have entered an important new phase and have done so sooner than expected,” he said. “While this bounceback in economic activity is welcome, it also presents new challenges — notably, the need to keep the virus in check.”
The Fed has cut rates to near zero and pumped $2 trillion into purchases of Treasury and mortgage-backed securities to support the financial system. It is also providing support through 11 special programs that facilitate the functioning of credit markets for businesses and consumers and borrowing by state and local governments.