WASHINGTON—Both Treasury Secretary Steven Mnuchin and Federal Reserve Board Chairman Jerome Powell will be back before Congress today, likely offering testimony similar to that given earlier this week to the House during which they shared their views on federal stimulus efforts and what’s ahead.
Both earlier told a House committee the federal government’s emergency aid and loan programs have been effective in minimizing damage from the coronavirus pandemic, but that more government spending is likely needed.
Mnuchin told the House Financial Services Committee that he does not foresee additional changes being made to loan programs established by Treasury and the Federal Reserve, saying, “I unfortunately think there’s not much more we can do.”
Lawmakers had asked both men why more couldn’t be done to adapt the emergency loan programs to help hard-hit businesses, including commercial real-estate and city and state governments.
One analysis suggested Powell and Mnuchin believe those loan programs had done what they could to preserve favorable financial conditions for eligible borrowers and that what many would-be borrowers need now are grants, which would require new funding from Congress, as opposed to loans from the Fed.
Growth is Coming
Regarding economic recovery efforts, Mnuchin told the committee hearing there will be large-scale economic growth in the third and fourth quarters, particularly in home building. Powell indicated that a vaccine and treatment for the virus will be necessary to fully reopen the economy.
Many lawmakers showed support for an extension to the Paycheck Protection Program and expressed the need for simplifying the forgiveness process, which has had the support of both trade groups.
Mnuchin stressed the need to prevent and mitigate fraud within the program, pointing to verification forms backed by the Treasury department, and indicated that he believes Congress would have to act to bring about automatic forgiveness of smaller loans.
Ahead of the hearing, NAFCU Vice President of Legislative Affairs Brad Thaler shared how credit unions are working to assist their members and outlined areas where additional relief is needed.