Treasury Secretary Steve Mnuchin on efforts to restart the U.S. economy in the face of the coronavirus pandemic.
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The Senate Banking, Housing and Urban Affairs Committee is holding a hearing Tuesday to review spending under the $2.2 trillion CARES Act, after a report was released detailing money meant to help businesses as well as state and local governments hurting financially as a result of the coronavirus pandemic.
In a written statement ahead of the hearing, Treasury Secretary Steve Mnuchin discussed the dire condition of the economy, claiming that the situation will improve as the country gradually reopens.
“We have had to take unprecedented steps to shut down significant parts of the economy in the interest of public health,” Mnuchin said. “As a result, in the second quarter of this year, we are continuing to see large unemployment and other negative indicators. It is important to realize that the large numbers represent real people. This is why it is so important to begin bringing people back to work in a safe way.”
Of the $500 billion in spending detailed by the Congressional Oversight Commission’s first report on the program, $454 billion is meant to support Federal Reserve lending facilities. Mnuchin said that since March 17 he has approved nine such facilities.
The remaining $46 billion is reserved for the Treasury Department for loans to passenger and cargo air carriers, as well as companies “critical to maintaining national security,” but, according to the report, none of that has been disbursed yet.
“The Treasury has received applications for these loans and is in the process of reviewing them. The Treasury has not yet made any loans to the airline industry and businesses critical to national security under these applications,” the commission’s report said. “The Treasury has, however, issued grants and loans to the airline industry under the Payroll Support Program under Division A, Title IV, Subtitle B of the CARES Act.”
Mnuchin also noted that the government is processing $530 billion for more than 4.2 million forgivable small business loans under the Paycheck Protection Program (PPP).
Lawmakers from both parties have criticized the PPP, which has been plagued by a host of problems. Many businesses were unable to get loans before the initial funding was exhausted. A second round of loans faced computer processing delays and a number of publicly traded companies ended up receiving money that Mnuchin demanded be paid back to the government.
Mnuchin will likely come under tough questioning from senators Tuesday about the program’s struggles.
Another hallmark of the CARES Act was the direct payment made to millions of individuals and families. Mnuchin said that the government has issued upwards of 140 million such payments, with the average family of four receiving $3,400.
Also testifying Tuesday is Federal Reserve Chairman Jerome Powell. In a prepared statement, Powell discussed measures already taken to support a struggling U.S. economy.
“In March, we lowered our policy interest rate to near zero, and we expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum-employment and price-stability goals,” he cited as an example.
For his part, Powell pledged to reveal the names and other details of the entities that borrow from the emergency programs the central bank has set up to offset the economic hit from the viral outbreak.
In his prepared testimony, Powell said the central bank will disclose the amounts borrowed and the interest rates it levies under its programs to provide credit for large corporations, state and local governments, and medium-sized businesses.
“We are deeply committed to transparency, and recognize that the need for transparency is heightened when we are called upon to use our emergency powers,” his testimony says.
Despite rising unemployment that has resulted in tens of millions of Americans without work, Mnuchin offered words of optimism as financial programs aim to provide economic relief while medical professionals work on therapies and a potential vaccine.
“While these are unprecedented and difficult times, these programs are making a positive impact on people,” he said. Together we will destroy the COVID-19 virus, and our country will emerge from the pandemic stronger than ever.”
Fox News’ Brooke Singman and The Associated Press contributed to this report.