WASHINGTON – Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell faced an array of questions from senators Tuesday on the government’s response to the economic pandemic, the push to reopen the country and the status of billions set aside to help businesses weathering the economic crisis.
The pair offered a cautious view of the economy, with Mnuchin displaying a more optimistic outlook than Powell, who told the Senate Banking Committee that “the scope and speed of this downturn are without modern precedent and are significantly worse than any recession since World War II.”
Mnuchin noted that he anticipated the economy would recover but said “there is risk of permanent damage” should states wait too long in reopening their economies. He also noted that while he anticipates the economy and the jobs numbers to recover, things are likely to get worse before they recover.
The hearing was the first as part of a mandate in the CARES Act, the nearly $2 trillion emergency bill that was signed by President Donald Trump at the end of March, that requires quarterly oversight hearings examining the Treasury and Federal Reserve’s use of funds and its management of a $500 billion lending program.
It came as Democrats have pushed to pass more funds to counter the coronavirus while Republicans say a pause is needed to assess the nearly $3 trillion that Congress has passed to address the pandemic and wait for those funds to fully go into effect.
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Senators on both sides of the aisle questioned the status of a number of programs, such as funds for state and local governments and a Main Street lending program that has yet to launch. Mnuchin told senators he anticipates the program, which is geared for mid-sized businesses, would be ready to launch by the end of the month.
Multiple senators clashed with Mnuchin, who has been the lead negotiator for the administration on coronavirus legislation, over transparency, how the programs were being utilized and on the White House push to reopen the economy as coronavirus continues to ravage the country.
Near the start of the hearing, Sen. Sherrod Brown, D-Ohio, asked Mnuchin why essential workers at grocery stores and in the service industry were having to work and put their lives at risk, while earning lower wages than others.
“How many workers should give their lives to increase the GDP or the Dow by 1,000 points?” Brown asked at one point.
Mnuchin called the characterization of the question “unfair” and said, “No workers should give their lives to do that, senator.”
Sen. Elizabeth Warren, D-Mass., sparred with Mnuchin and pressed him to require companies who take taxpayer-funded loans to keep their workers on the payroll. She said that Mnuchin wasn’t doing this to help his “friends” on Wall Street.
Mnuchin said Warren’s comments were a “very unfair characterization” and that the mandates in the legislation for businesses and keeping workers on payrolls were negotiated in a bipartisan format.
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