Mnuchin sees ‘strong likelihood’ of needing another COVID-19 relief bill
Treasury Secretary Steven Mnuchin on Thursday said there is a “strong likelihood” that another coronavirus relief bill will be needed as more states start to reopen and the economy struggles to stabilize.
“We’re going to carefully review the next few weeks,” Mnuchin said in an interview with The Hill’s Bob Cusack during a virtual event. “I think there is a strong likelihood we will need another bill, but we just have $3 trillion we’re pumping into the economy.”
“We’re going to step back for a few weeks and think very clearly how we need to spend more money and if we need to do that,” he added.
Mnuchin’s comments — which came during the The Hill’s Advancing America’s Economy Summit, sponsored by Wells Fargo and Siemens — follow those of White House economic adviser Kevin Hassett, who said earlier this week that he thinks another coronavirus bill might not be necessary.
On Capitol Hill, Republicans and Democrats are divided over how to tackle additional legislation.
House Democrats last week passed a $3 trillion relief package, but Senate Republicans have said that bill is dead on arrival in their chamber. Some GOP senators have indicated they want to move quickly on another measure, but Senate Majority Leader Mitch McConnell (R-Ky.) has signaled a desire to move more slowly in order to first evaluate what is and isn’t working from previous relief bills that were signed into law.
One point of division that has emerged is unemployment insurance.
McConnell told House Republicans on Wednesday that the $600-per-week boost to unemployment insurance that was part of legislation passed in March would not be included in the next bill.
Republicans have criticized the boost, arguing that it is a disincentive for people to return to working. But Democrats argue that the enhanced unemployment benefits should be extended because they are critical to helping the millions of people who have lost their jobs in the past couple of months.
Mnuchin said Thursday that “we do need to fix the quirk” with the unemployment expansion that results in some people receiving more in unemployment benefits than they did in wages when they were working.
Mnuchin said he last spoke with Speaker Nancy Pelosi (D-Calif.) last week, but that conversation was focused on the execution of the $2.2. trillion law Trump signed on March 27, not subsequent legislation.
He said the package passed by House Democrats last week was a “partisan bill” that the White House is not focusing on at the moment. He noted that the previous relief packages had overwhelming bipartisan support, and that he would hope that’s the case with the next one as well.
A key program created by past relief bills is the Paycheck Protection Program (PPP), which provides forgivable loans to small businesses. Mnuchin said that the program has saved about 50 million jobs so far, and will ultimately save about 60 million jobs.
Mnuchin said that “it wasn’t perfect getting up and running,” but that it was important that the program was set up quickly.
Mnuchin said that the program has over $100 billion left that it can still provide to businesses. He said that the Trump administration is working with Congress on lengthening the amount of time the businesses have to use the funds, and that there is bipartisan support to extend the period from 8 weeks to 10 or 12 weeks.
“That’s something we definitely want to fix. It doesn’t cost us any more money and there is bipartisan support,” Mnuchin said, adding that this change has to be made by legislation rather than administratively.
Mnuchin defended the fact that under the program, businesses have to use 75 percent of their loan amounts for payroll.
“It’s called the Paycheck Protection Program, it’s not called the overhead protection program,” he said.
Mnuchin did not commit to testifying before the House’s Select Committee on the Coronavirus Crisis. Republicans have criticized the panel, arguing that it’s not necessary because there are other oversight mechanisms built into coronavirus relief laws.
Mnuchin said he couldn’t comment about testifying before the committee because he hadn’t reviewed the matter with Treasury’s legal team. But he said there are other House committees that he and Federal Reserve Chairman Jerome Powell plan to testify before.
The Congressional Budget Office estimated this week that the unemployment rate will average 9.3 percent next year. Mnuchin said it’s “too premature” to make predictions like this. But he said he thinks the economy will be “dreadful” this quarter and improve in the following two quarters of this year.
“As the president has said and I have said, with the great advancement in medical progress and killing this virus, we expect our economy will be great again next year,” he said.
Mnuchin said that the Trump administration is not currently considering providing Americans with upfront money in exchange for curbs to their Social Security benefits, as had been floated by the State Department.
“It’s not something that we’re considering at this point,” he said. Mnuchin added that “Social Security is very important to the president, and we’ll look at other options if people need money.”
The Treasury Secretary said he is frequently tested for the coronavirus.
“I am also tested on a regular basis because I am in pretty much daily contact with the president and the vice president and others,” he said.
Niv Elis and Zack Budryk contributed.