Treasury Secretary Steven Mnuchin said Tuesday that a new stimulus package is still needed to help the economy recover from the ravages of the coronavirus, and he committed to calling Speaker Nancy Pelosi (D-Calif.) right away to try to restart talks.
Mnuchin’s comments came in testimony before the select subcommittee on the coronavirus crisis, which convened on Capitol Hill in the final week of Congress’s summer recess. Mnuchin and the panel’s chairman, Rep. James E. Clyburn (D-S.C.), appeared in person along with a handful of lawmakers, while others spoke through a video link.
“While we continue to see signs of a strong economic recovery, we are sensitive to the fact that there is more work to be done, and certain areas of the economy require additional relief,” Mnuchin testified in his opening statement. “I believe a bipartisan agreement still should be reached and would provide substantial funds” for areas including schools, testing, vaccines, small businesses, enhanced unemployment benefits and the U.S. Postal Service. President Trump, meanwhile, said on Tuesday that the struggling airline industry would also need more assistance.
Clyburn chided Mnuchin for not making a deal with Democrats months after the House passed a sweeping $3.4 trillion bill in May called the Heroes Act.
“Additional economic stimulus is urgently needed … as the pandemic drags on, states, cities and businesses are warning that more layoffs may be coming,” Clyburn said. “Secretary Mnuchin, I hope you will return to the negotiating table prepared to find common cause.”
Mnuchin was involved in talks last month with Pelosi, Senate Minority Leader Charles E. Schumer (D-N.Y.) and White House Chief of Staff Mark Meadows aimed at producing a new economic relief package. But those talks collapsed amid partisan rancor, and Trump moved forward on his own with executive actions aimed at providing some relief in areas including unemployment assistance.
Those executive actions have had limited impact, but Meadows reiterated in a television interview Tuesday that more such unilateral moves were under consideration.
Efforts at restarting the talks have sputtered. Pelosi and Meadows spoke last week, with Pelosi saying Democrats would agree to a $2.2 trillion package. But that figure is still too high for Republicans.
“I do not support $2.2 trillion,” Mnuchin said Tuesday. “But what is more important is what is the breakdown of getting money to American workers, American families, kids … there are tremendous areas of agreement and that’s what we should be doing right away.”
“I don’t think the right outcome is zero. No one thinks the right outcome is zero,” Mnuchin said.
Rep. Maxine Waters (D-Calif.) asked Mnuchin if he would commit to calling Pelosi on Tuesday to restart talks.
“Can I tell her you suggested I call her right after the hearing?” Mnuchin asked.
“Yes, yes, yes,” Waters said.
“Done, I will call her right after the hearing,” Mnuchin said.
The Treasury secretary did reach out to the House speaker following the hearing, according to a person familiar with the call who requested anonymity to discuss private communications. However, it was unclear if they actually connected, and there was no public sign of movement in the negotiations.
The administration has pushed Democrats to agree to a slimmed-down package addressing areas of common ground, but Democrats have refused to abandon their goal of a comprehensive package.
Senate Republicans have been working to agree on what they’re calling a “skinny” or “targeted” package with a price tag under $1 trillion that they may try to move forward on the Senate floor as soon as next week. Democrats would probably block this, but Republicans have been trying to put the focus on what they view as Democrats’ unreasonable refusal to compromise in the talks. Senate GOP incumbents in tight races are also eager to be able to vote on some additional recovery measures.
Some 27 million Americans are receiving some form of unemployment aid. On Thursday, the Labor Department said another 1 million Americans filed jobless claims the prior week.
The stock market has made strong gains, and the economy has recovered slightly less than half of the jobs that were initially lost during the pandemic in March and April. Trump has been talking bullishly about the economy’s revival, focusing on things like the stock market, as he and some other White House advisers insist that the economy is poised for a strong “V-shaped” recovery.
Democrats and some liberal economists, however, have expressed concerns about a “K-shaped” recovery, in which the economically advantaged bounce back, while people who are on the lower levels of the income scale fare poorly.
Rep. Andy Kim (D-N.J.) asked Mnuchin if he agreed the economy was poised for a strong “V-shaped” recovery.
“I think we are set for a very strong recovery but let me just say, there are many businesses, many industries that have been destroyed by this, and that’s why I urge Congress, the House and the Senate, to move forward and let us provide help especially for those hardest-hit businesses,” Mnuchin said.
“Let’s not get lost on different letters of the alphabet, let’s move forward in a bipartisan basis on areas we can agree on,” he said.
Some House Democrats in tough reelection races have also grown uneasy about the inaction on additional coronavirus aid, as the stimulus checks, enhanced unemployment aid and other programs Congress agreed to in a $3 trillion spate of spending in March and April expire. Even as Pelosi has held out for a comprehensive package, some in her caucus have sounded open to the incremental approach pushed by Mnuchin.
At Tuesday’s hearing, Kim, a freshman Democrat up for reelection in a contested race, told Mnuchin that moving forward on areas of agreement was “a great sentiment” — although he went on to highlight some Democratic priorities such as health insurance assistance that Republicans have not embraced.
Ahead of the hearing, Democrats on the subcommittee released a report showing the potential for significant waste in the small-business Paycheck Protection Program Congress created in March. The program distributed $530 billion to small businesses in an effort to keep their workers on payroll. The report found that more than $1 billion went to companies that may have improperly received multiple loans, nearly $100 million went to companies that have been barred from doing business with the government, and nearly $200 million went to companies that staffers found had been previously flagged by the federal government for performance or integrity issues.
The amount of potential waste identified in the report still constitutes a small fraction of the entire program, and Treasury and Small Business Administration officials have committed to auditing loans of more than $2 million. But the staffers behind the report said the loans to be audited constitute less than 1 percent of the total and wrote that “the Administration appears to lack the appropriate oversight mechanisms to identify and root out these problems.”
Mnuchin disputed this allegation in his testimony Tuesday, and Republicans on the subcommittee issued a competing report that praised the administration for demonstrating “how the government can work with the private sector to quickly and efficiently get aid to those in need” by dispensing an unprecedented volume of loans in a short period of time to prevent catastrophic job losses at small businesses.
There continues to be disagreement over how effective the program has been in reducing unemployment. Trump and other administration officials still claim that the program helped small businesses retain or support 50 million jobs — something Trump again boasted during his acceptance speech at the Republican National Convention — despite agreement among many experts that the number was likely far smaller due to the government’s faulty data collection methods.
A Post analysis of data on 4.9 million PPP loans released shows that many companies are reported to have “retained” far more workers than they employ. In other cases, the SBA’s jobs claim for entire industries surpasses the total number of workers in those sectors.
Jeff Stein contributed to this report.
