Lawmakers question Mnuchin, Fed Chairman on coronavirus economic response

Lawmakers question Mnuchin, Fed Chairman on coronavirus economic response

WASHINGTON — Lawmakers from both parties questioned the heads of the country’s economic response to the coronavirus pandemic about the $2 trillion from the Coronavirus Aid, Relief, and Economic Security (CARES) Act on Capitol Hill Tuesday.

Treasury Secretary Steven Mnuchin and Chairman of the Federal Reserve Jerome Powell testified before the Senate Banking, Housing and Urban Affairs Committee.

“We’re seeing a severe decline in economic activity and unemployment and already the job gains from the last decade have been reversed,” Powell said.

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Mnuchin warned about the economy getting worse if businesses don’t reopen soon.

It’s something the White House and many Republicans have been pushing for in recent weeks.

“The longer that we continue a shutdown, when weeks turn into months, doesn’t that necessarily increase the risk that some businesses will fail” Sen. Pat Toomey (R-Pennsylvania) asked. “Some jobs won’t be there to go back to if a lockdown and a shutdown continues indefinitely?”

"That's absolutely the case Mr. Senator,” Mnuchin responded. “There is the risk of permanent damage."

But Democrats were critical of efforts to reopen without having enough testing and protection available for all workers.

"How many workers should give their lives to increase the GDP [gross domestic product] or the Dow Jones by a thousand points?” Sen. Sherrod Brown (D-Ohio) asked in a heated exchange.

"No worker should give their lives to do that Mr. Senator and I think your characterization is unfair,” Mnuchin replied. “We have provided enormous amounts of equipment. We worked with the governors.”

Lawmakers from both parties questioned why the fed hasn’t yet started the Main Street Lending Facility, which is meant to help businesses that did not qualify for the Paycheck Protection Program (PPP).

Powell said he expects that program to be in place by June.

There was also criticism by Democrats about whether workers are getting enough help.

"Are you going to require companies that receive money from this half-a-trillion dollar slush fund to have to keep people on payroll?” Sen. Elizabeth Warren (D-Massachusetts) asked. “It's a simple question. Yes or no? Are you going to require that?”

“Again, we negotiated very specific restrictions on employee compensation, on dividends, on buy-backs and in the Main Street Facility we have put in a provision that we expect people to do their best efforts to support jobs,” Mnuchin said.

Mnuchin also pointed out that if a worker turns down returning to a job, the person will not be entitled to unemployment benefits.

“If you offer back a worker and they don’t take that job, you will be required to notify the local unemployment insurance agency because that person will no longer be eligible for unemployment,” Mnuchin said when discussing PPP recipients.

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