Treasury, Fed heads grilled for coronavirus response
MNUCHIN: "We are sympathetic to the hardworking Americans in business, enduring tremendous challenges due to COVID-19. We are continuing to see large unemployment and other negative indicators. It is important to realize that the large number represents real people.”
A dose of sympathy Tuesday from Treasury Secretary Steve Mnuchin in a joint webcast with Federal Reserve Chairman Jerome Powell before the Senate banking committee.
The two are now required to testify quarterly to update Congress as part of the $3 trillion coronavirus economic assistance program known as the CARES Act.
Mnuchin told lawmakers the U.S. economy must re-open now and the White House is working to help the millions thrown out of work.
“This is why it is so important to begin bringing people back to work in a safe way. As we listened to medical experts, we are optimistic about the progress being made on vaccines, antiviral therapies and testing. Working closely with the governors, we are beginning to open the economy in a way that minimizes risk to workers and customers. We expect economic conditions to improve in the third and fourth quarter and into next year.”
But that rosy outlook got push back from key Democrats including Senator Elizabeth Warren…
And ranking member Sherrod Brown.
BROWN: “How many workers will die if we send people back to work without the protections they need? Mr. Secretary. How many workers should give their lives to increase the GDP or the Dow Jones by a thousand points?"
"You know, no workers should give their lives to do that, Mr. Senator, and I think your characterization is unfair."
Some Republican senators came to Mnuchin’s defense, while others tried to get Chairman Powell to roll back his call last week, when he urged Congress to consider spending even more to save the economy.
SENATOR PAT TOOMEY (R) PA: "You still stand by that comment?"
POWELL: "I do."
And Powell went even further when pushed about the impact of leaving out state and local municipalities in future assistance programs, which could throw into the mix massive layoffs of public-sector employees.
“We have the evidence of the global financial crisis and the years afterward, where state and local government layoffs and lack of hiring did weigh on economic growth. So there is clear evidence that you have a situation where people are unemployed for long periods of time. That can permanently weigh on both their careers and their ability to go back to work and also weigh on the economy for years, equally."
But both men said the Federal Reserve and the Treasury are taking unprecedented steps to prevent that from happening and are willing to do more if necessary.
