Transcripts For CSPAN2 Treasury Secretary Mnuchin Federal Reserve Chair Powell Testify On... 20240712

From the House Financial Services committee, this is two hours. [inaudible conversations] [inaudible] including some required by the regulations. [inaudible] Remote Committee proceedings. Ive asked all members on the platform to keep themselves on me what when they are not being recognized. This will minimize disturbances while members are asking questions of the witnesses. Members on the platform are responsible for muting and on muting themselves. The staff has been instructed not t to meet its members except where a member is not being recognized. If there is inadvertent background noise. Members on the platform are reminded that they may only attend one remote hearing at a time. So if you are participating today, please remain with us during the hearing. Members should try to avoid coming in and out of the meeting particularly during the question period. If during the hearing members wish to be recognized, the chair recommends members identify themselves by name so as to facilitate the chairs recognition. I would also ask members be patient as the chair proceeds given the nature of the Online Platform the committee is using. In addition, the chair informs the men verse participating in person that in enforcing order r and decorum in the hearing room the chair has a duty to protect the safety of members. The attending physician provided the following items. For u. S. House of representatives meetings in a limited enclosed space such as a Committee Hearing room, for greater than 15 minutes, face coverings are not required. Accordingly, the chair will treat Wearing Masks as a matter of order and the koran and all members should wear a mask. The chair has a strong preference for members to wear a mask even while recognized. Members who do not wish to wear a mask may participate virtually through the platform. Before going any further, i would ask unanimous consent to speak of order as a personal privilege. I would like to take a minute to acknowledge the departure of a staff member. Lisa has been with the committee for eight years working her way up from a fellow to the committees chief counsel. She has been a dedicated tireless and committed Public Servant with a keen understanding of procedure and a deep knowledge of the estate of process. Undeunder lisas guidance, the Committee Democrats successfully transitioned from minority to majority and then lease was instrumental in the committees transition from an inperson pen hearings to virtual and hybrid. Lisa has accomplished so much with the committee, but the most important accomplishment as her family. She is mom to her son who recently celebrated his first birthday. Lisa has been a valley and member of my team and i will miss her dearly so i want to thank her for her service and wish her the best on her future endeavors. I now recognize the Ranking Member to speak out of order. Thank you, madam chair. As we all know and grow in our service here, we know how important having staff is to this whole process. How a sensual it is. You have good staffers told represent the members perspective. Lisa has been a fierce advocate for her principal perspective and negotiations she hasnt wavered in her view that the same time being cordial enough to have a relationship and maintain that its a priceless bit of art represented the lisas character and we are grateful we have been able to work with you and we wish we had been more successful in our negotiations with you personal personally. I know Committee Democrats especially will miss you. Committee republicans wont miss you quite as much, but we are certainly grateful for the relationship weve all been able to have with you. So, congratulations to you on your son and your new family. And we hope that your time away will be put temporary from public service, but thank you for your service to the country and this institution and i yield back. [applause] thank you very much, mr. Ranking member. This hearing is entitled oversight of the Treasury Department and Federal Reserves pandemic response. This hearing is the committees second quarterly hearing required by the cares act for oversight of the various facilities and programs under the act. I now recognize myself for a minute to give an opening statement. Welcome back, chair powell and secretary mnuchin. Since you last testified before this committee in june, the corona virus crisis has continued to have a catastrophic impact on communities across the country. Nearly 200,000 people in the United States have lost their lives to the corona virus coming at a thereve been over 6. 8 million u. S. Cases. Millions of families are struggling to make ends meet during this crisis and are on the verge of eviction. Over a million Small Businesses that are the lifeblood of our economy have shut their doors as families across the country are looking to washington for leadership. The Trump Administration has failed in its economic response to this virus with 32 of renters unable to make their full september rent payment at the beginning of the month according to department of justice and it is piling up. The need for emergency rental assistance to prevent it crushing wave of evictions is growing everyday. Instead of rental assistance, the Trump Administration has issued a centers for Disease Control and prevention action that temporarily prevents evictions for some but only after they signed documents that potentially expose them to litigation and penalties. Meanwhile, the unpaid back friend continues to accrue, meaning that the Trump Administration is simply delaying, not preventing evictions. The heroes act that passed the house in may to prevent the evictions and provide other critical relief is gathering dust on Mitch Mcconnells desk. I said before that im pleased after calls from the members of the committee of the treasury and Small Business Administration Made adjustments to the Paycheck Protection Program to ensure they communicate the development of institutions and minority depository institutions are able to provide loans to the communities they serve, and i appreciate that the Federal Reserve has expanded several programs, but im frustrated with the Trump Administrations implementation independent mac relief program. Based on the concerns i continue to hear. Specifically, im very concerned much of the 500 billion congress allocated to the treasury most of which was to support the data funding to help businesses, state and local governments has gone unused. Here we are six months after the passage of the act and a 0. 2 of the Lending Program funds. They have efforts to pass the relief package or address the nature Public Health and economic crisis we face. Your work to address this crisis doesnt stop when the stock market covers its losses. Your mandate is to help hard working individuals and families have suffered. Before i close, let me just say that ive learned today that there are 40,000 students that have been infected with the virus. That shakes me and we still have people that are forcing schools to open and not offer distance learning. I didnt know that many students had been affected, so im very concerned. I now recognize the Ranking Member of the committee, the gentleman from North Carolina, mr. Mchenry. We all know that testing treatments and therapeutics need to come online for full economic recovery. That is moving at an unprecedented pace i would say, not just globally that here in the United States with great innovators and the coordination between the public and private sector has been the best its ever been in generations. This administrations response to this unprecedented pandemic, the Federal Reserve pandemic is top notch. It is fantastic the delivery secretary was able to provide which supported 51 million jobs and issued over 5 million loans to Small Businesses impacted. That was a direct intervention in the treasury secretary. The federa Federal Reserve stepe facilities and a sixmonth period of time than they did in the financial crisis. They stood up more facilities than they did in decades prior to this pandemic. So, i would give the Federal Reserve and a for its initial response into where we are. And just because congress cant get its act together and compromise, seeing a way through so we can provide those people that are still hurting because of the voluntary shutdown of the economy and because of the health crisis, we need to get those people really think we need to come to terms. That means democrats and republicans need to move to the middle and i would commend secretary mnuchin for his negotiations and his willingness to move the ball forward on behalf of the American People, even in the midst of a crazy politics we are experiencing and people shouting in the streets and threatening violence because they dont like political perspectives. So, i would commend him for being willing to negotiate where others have walked away like Speaker Pelosi and leader schumer saying 3 trillion is all we are going to accept and nothing less is completely unacceptable. We need to find compromise to support those people that are still out of work because of this Global Health pandemic. Quite frankly in that bill democrats ought to be able to bail out the blue states and hold out for that rather than help people that are still out of work because their jobs are shut down. Let me finish with this. What they saw at the end of last year was the best economy of our lifetimes. We have household wage growth in 2019. Households were feeling wil weay for the first time in a very, very long time. In my state of North Carolina and across the country. We need to do that again. We know we are in the midst of this health pandemic. We know the therapeutics are coming online, treatments, the techniques are much better than they were into those things are coming alon along and maybe thee will be a vaccine, but we need to have treatment and testing widescale said people can get back to a semblance of economic life. But id like to hear today is a limit to the Federal Reserve action to activities and where congress should act because Monetary Policy simply cannot do the same thing fiscal policy can. And upon the fiscal side of the house, secretary mnuchin, i would like to hear the economic plan on the administration on how we get past, when we get past this awful covid, without economic recovery must entail to get people back in the position they were in in 2019 or even january or february of this year. I think there is a good story to tell and a hopeful story to tell if we can Work Together and get things done. I look forward to your testimony and yield back. I recognize the chair on oversight and investigation for one minute. Thank you, madam chair. I did add thi the stimulus, the Economic Impact statement must be made because the rent must be paid. Yesterday the gao reported that they lack information o on and improvanumber of cultural recips have yet to receive their payments. This new report dating back to may 2020 that persons not in the traditional Employment Relationship such as those working in the economy may be missing from the outreach. Without this data it is difficult to know who is being left behind and there may be millions. I say again to rent must be paid, the payments must be made. If we do not do this, we will put persons at risk of being evicted at a time when we are having a pandemic that is still taking lives in this country. I do believe that this can be done but i do know that we must have more help to make sure that the rent is paid. The payments are already there and found it. We need to make sure that people will get them. I yield back. I now recognize the subcommittees Ranking Member for one minute. Thank you, secretary mnuchin and chairman powell for appearing today and for your continued efforts to combat the economic fallout fro from this before pandemic. The treasury and the fed acted swiftly to stabilize the economy, keep this is as open and ensure the continued operation of the credit markets and promote longterm recovery. Since he last appeared before the committee to testify on the care act and limitation the economy has improved. Unemployment has decreased nearly half of the job loss in the early days have been added back to the labor market and our economy is safely reopening. We are on the road to recovery. Policies put into place by the treasury and fed and action is both taken have put the economy on a more stable footing. However the important factors including hospitality, conventions, entertainment, retail remain in distress and there are elements of the responses that could still be a trusted. I look forward to discussing those today and hearing the plans to implement a strategy for longterm economic growth. Thank you. I want to welcome todays witnesses to the committee. First i want to welcome secretary of the treasury who served in the current position since 2017. Mr. Mnuchin has testified on previous occasions, and i believe that he does not need any further introduction. I also want to welcome our other distinguished with this, drama towel chairman of the Federal Reserve system. He served on the board of governors since 2012 and the chair since 2017. Chairman powell testified before the committee and i believe he also does not need any further introduction. Without objection, your statements will be made a part of the record. Each of you will have five minutes to summarize her testimony. When you have one minute remaining, the yellow light will appear and at that time i would ask you to wrap up your testimony so we can be respectful of the Committee Members time. Secretary mnuchin, youre recognized for five minutes to present your oral testimony. Chairwoman, Ranking Member, members of the committee, im pleased to update you on how the department of the treasury and Federal Reserve have been working to provide relief for American Workers and credit markets, business, nonprofit organizations, state and local governments in households. We are fully committed to getting every american back to work as quickly as possible. America is in the midst of the fastest economic recovery from any crisis in the u. S. The report showed the economy has gained back 10. 6 million jobs since april and nearly 50 of all jobs lost due to the pandemic. The Unemployment Rate decreased to 8. 4 , a notable achievement considering many people thought it could get as high as 25 . Thanks to the programs provided by the act, we never got close to that figure. I believe we will see tremendous growth in the Third Quarter fueled by strong retail sales, home Sales Manufacturing growth and increased business activity. The September Survey projects close to 24. 24 for the Third Quarter. The recovery has been strong for the administration and congress Work Together on a bipartisan basis to deliver the largest Economic Relief package in american history. The Federal Reserve has been instrumental to the recovery by implementing 13 unique funding facilities. Economic reopenin three openingd with the care act have enabled us to have an economic rebound which some industries particularly hardhit by the pandemic requires additional relief. The president and i remain committed to providing support for American Workers and business and we continue to work with congress on a bipartisan basis to pass a face or program. Case for program. I believe they targeted package is still needed and the administration is ready to reach a bipartisan agreement. The chair has been working hard to implement the act with transparency and accountability. We have released a significant amount of information on our website, treasury. Gov and usa spending. Gov. Weve released more information than was required by the statute. The Federal Reserve also posted information on its website regarding the lending faciliti facilities. We provided regular updates to congress marking my sixth appearance before congress for the care is act hearing. We ar are cooperative with the various oversight bodies and the special Inspector General of the treasury Inspector General, the treasury Inspector General for tax, the Congressional Oversight Commission and the gao. We appreciate congress has issued debate with interest and devote significant resources to respond. We remain committed to working with you to accommodate the legislative needs and further whole of government approach. Id like to thank the members of the committee for working with us to provide economic support to the American People. Thank you. Thank you, secretary mnuchin. Chairman powell, you are now recognized for five minutes to present your oral testimony. Thank you, chairwoman waters, Ranking Member mchenry and other members of the committee. Thank you for the opportunity to update you on the ongoing measures to address the hardship brought by the pandemic. The Federal Reserve along with others across government is working to alleviate the economic fallout. We remain committed to using our tools to do what they can for as long as it takes to ensure that the recovery will be as strong as possible and to limit lasting damage to the economy. Economic activity has picked up from its depressed secondquarter level when much of the economy was shut down to spread thi the stem of the viru. Many Economic Indicators show marked improvement. Household spending looks to have recovered its earlier decline likely in part to federal stimulus payments and expanded Unemployment Benefits. Housing sector has rebounded and business fixed investment show signs of improvement. In the labor market, nearly half of the 22 million payroll jobs were lost in march and april have been regained as people return to work. Both employment and Overall Economic activity remained well below the pre pandemic levels into the path continues to be highly uncertain. [inaudible] hasnt fallen equally on all, those least able to bear the burdeburden has been most affec. Rising joblessness has been severe for the lowwage workers, for women and for africanamericans and hispanics. The reversal of economic fortune has upended many lives and created the great uncertainty about the future. The full recovery is likely to come only when people are confident that its safe to reengage in a broad range of activities. The path forward will depend on keeping it under control and on policies taken at all levels of government. Since midmarch we have taken forceful action implementing a policy of near zero on increasing Asset Holdings into standing up to 13 emergency when in facilities. We took these measures to support broad financial conditions and more directly to support the flow of the credit to households, businesses of all sizes and state and local governments. Our actions taken together have unlocked more than a trillion dollars of funding which in turn has helped keep organizations from shuttering putting them in a better position to keep workers o on and hire them backs the economy continues to recover. The main street Lending Program has been a sick that they could interest to the committee and the public. Many of the business is effective for smaller firms that rely on banks for loans rather than the credit markets. Main street is designed to facilitate the flow of credit to small and mediumsized businesses and establishing the facility we conducted extensive outreach resources i resulting c comment and Holding Discussions with lenders and borrowers of all sizes. In response to feedback weve continued to make adjustments to provide greater support to small and mediumsized businesses and nonprofit organizations such as hospitals and social service organizations. Nearly 600 banks representing more than half of the assets in the Banking System is either completed registration or are in the process of doing so. About 230 loans totaling roughly 2 billion or even funde are eid were in the pipeline. Main street is intended for businesses that were on a sound footing the pandemic. And that have good longterm prospects. But have encountered temporary cash flow problems due to the pandemic and are not able to get credit on reasonable terms as a result. They may not be the right solution for some businesses in part because it states clearly that the loans cannot be forgiven. Credit facilities improved the conditions broadly including for potential mainstream borrowers. Evidence suggests most can currently get loans from privatesector financial institution. Many programs rely on emergency lending powers to require the support of the Treasury Department and were available only in unusual circumstances. By serving as a backstop to keep the markets are the programs bye significantly increased extension from private lenders. However the facilities only that, a backstop designed to separate the functioning of private markets, not to replace them. However these were lending, not suspending powers. Many will benefit from the programs as well the overall economy that for others alone i could be difficulthat it could o repay might not be the answer and that fiscal support might be needed. Needed. Our economy will recover from this difficult period. We remain committed to using our full range of tools as long as needed. Thank you. Thank you very much, chair powell. I now recognize myself for five minutes for questions. I was very appreciative of the explanations that youve given in anticipation of all the questions that we have about main street and other facilities. Earlier this month, our Committee Held a hearing on the need for further federal assistance to state and territorial governments. Although each of the state governors at the hearing can burrow through private markets more attractive rates than in the liquidity facilities, they found the need to keep the facility as an option in the future and the governor urged the fed to make the facility available territories. The republican witness, doctor holtzeakin, a former Congressional Budget Office director and staff economist for president george h. W. Bush council of advisers said, and i quote, the mystery to me has been the performance of the treasury in using a centrally half a trillion dollars to backstop the facilities including the Municipal Liquidity facility. This seems underutilized in my eye, and i dont fully understand why that hasnt happened. That is something they can and should be more aggressively used. So, in that time a wide range of businesses have been frustrated that theyve been unable to access the facilities again like the main street Lending Program, and weve heard the excuses that were given for that and we have republican and Democratic State governors pressing for more assistance to do believe that theres more of the treasury can do with the 500 billion congress provided you to enhance these facilities to support the economy . I unfortunately think theres lots more we can do and part of the reason of the greatest potential is to reallocate to better use. Almost every single one of the facilities has extra capacity. I think that in the case of many businesses that havent been into it by the virus that are able to borrow in the private markets and as it relates to main street, we worked very hard to roll out the program and its based on underwriting from before the pandemic and i know theres been questions we expect to take losses and we are working closely on that. Secretary mnuchin, of the 600 billion available to the main street Lending Program, only about 1. 2 billion has gone out the door to 118 companies. With treasury object to the fed eliminating the main Street Programs threshold of 250,000 so that Small Businesses and minority owned businesses who need smaller loan can access the program . Let me just say im appreciative because when we started out when they first rolled out with the main Street Program, the minimum requirement for the loan was 1 million you get reduced to 250,000. Im asking can you go further in the reductions so that the loans can be made to smaller businesses, secretary mnuchin . I would define lowering backo 100,000 we will consult with chairman powell afterwards on an lowering it. Mr. Sher . Theres very little demand in the facility below a million dollars. There isnt much interest at all below a million dollars, so this would have to be a different facility. It wouldnt look like main street. Extending credit in those small quantities but require a facility built from the ground would be different than main street. It wouldnt have the same requirements, but we can talk about that. It would look like the current main street facility though. Its a different kind of thing. I am aware of how the name street facility was formulated for the midsized businesses. And also i am very much aware they have to repay those loans. But we have so many Small Businesses so eligible for ppe and beyond. And certainly, they would repay those small loans. Its not that they are absolutely looking to have them raised. So you think some of the can be . Its possible. I really do though think that this is more appropriate for ppe loans that are in the nature of grants. Thats a better way to approach these. Trying to underwrite the credit of hundreds of thousands of very Small Businesses, it would be very difficult. And i think ppe is a better way to approach that space in the market and you are well advised to do that. Thank you. I recognize the distinguished Ranking Member mr. Mchenry for five minutes for questions. So, secretary powell, lets begin here. Here. In the Federal Reserves own they doneeds, we see that therea substantial economic recovery happening. We see economic numbers improving, and we have many households that are about the same as they were, a little better off in terms of savings back to the beginning of the year we have seen many households much, much worse off so it is sort of a tale of two different recoveries i if they will or two different experiences. So, why do we see good economic numbers, what are the areas you see as needing further assistance, what areas of the economy do you see as needing further assistance to get back to something more normalized given where we are . I guess i would point to the labor market to capture the size sides of the issue. We still have 11 Million People out of the 22 million who were laid off in the payroll numbers in march and april, still 11 million out there and that is really good progress. Weve put half of the specs work that is a long way to go. Thats more than lost their jobs and the financial crisis as im sure you know. So that is a lot of work to do and we know that our policies postapartheid, but it will go faster for those people if we have all of government working together. I want to commend you to be the voice and negotiator on the project. I think we have good results from the programs you could set up in coordination with the fed. Along those lines, what are the components for the next package we need to take to support the economy to go going again . It should be much more targeted focused on kids and jobs in the areas such as the travel business and restaurants with broad bipartisan support for those who have revenue drops. Small businesses are a large priority of that. Focus on Small Business and family support. So that would be a strong foundation. So treatment, therapeutics, massive scale testing getting up to scale with firstrate testing across the country and getting kids back in school in a safe way. Those are foundations for us getting the economy going to the next agree. Is not a fiscal policy or Monetary Policy to get people back in restaurants but decisions whether or not to engage similar to getting on airplanes. Do you see the capacity for a full economic recovery . I would highlight we are extremely pleased committing to 150 million pointofcare test we are working with other parties to deliver comparable amounts of testing with instant results. Those are very low cost test . Correct. For your testimony and for being here today and for your leadership we are still deeply in the midst of the economic effects of covid and thank you for being there with a Life Insurance policy and water to put out the flames. Thank you both. Picking up on the insurance policy the time is by bailouts we pass the t. A. R. P. Of the Auto Industry and now bailing out businesses large and small the government is very much in the business of bailouts they were all promulgated accusing my party to be a socialist. I had a chance to talk to the chairman about this i would like to believe we could do fewer rather than more and it like Business Managers large and small every thinking five or seven years the government will bail them out i also like the adf we are going to do these things the American Public be compensated for the use of their funds and i admire your efforts to make sure the American Public but when i propose that on a caucus call instant got calls from those if you make the money that feels like a hostage situation use the money for free or we will not take and fire people. Id love to give you the rest of my time but what do we need to do structurally to get out of the business of bailouts . And number two how can we get out of this hostage situation where the American People are being compensated fairly for the use of their money for private purposes. This is a different situation than the financial crisis because these were impacted because of covid not their fault versus issues they controlled but with the airlines we struck the right balance with proper, on compensation. It was very important given what went on in the travel industry with the National Security loan we took a 30 percent equity for proper compensation. I agree the government should be properly compensated but for very Small Businesses like the ppp the money we spent there we save significant money on unemployment on the other side. What is your philosophy to dispose of that in a sound manner or to maximize the return to the public . I think the American Public should reap the benefits so the expectation is to liquidate when they are normalized and the economy is back to normal. As it happens i could speak to secretary paulson one of the vehicles for capturing commonwealth for the citizens of the country is a Sovereign Wealth Fund alaska, norway, alaska, norway, should Congress Investigate if we receive a return on the bailout should we look at establishing the Sovereign Wealth Fund to take the proceeds use it as an Insurance Fund to disperse however we may choose . Does that make sense to you . Most countries that have Sovereign Wealth Funds like alaska typically thats for future generations for their focus on energy and things like that are not necessarily around forever. I dont think it should have a Sovereign Wealth Fund but taking the profits putting into an account that is reserved for future emergencies is an interesting idea and i will explore that with you. I will take you up on the offer. We dont want to be in the business of bailouts but if we do then the American Public should be compensated for the use of their many. I now recognize the gentle lady from missouri for five minutes. Thank you madam chairwoman thank you for being here today secretary mnuchin i have heard from employers across the Second District of missouri to desperately need congress to do his job to pass legislation so they can do their job and handout paychecks to their hardworking employees. The senate acted to pass relief legislation that could be signed into law that would give relief to childcare providers, Small Businesses and those who need it most at a time when so many are struggling we need to put americas Families First with partisan wish list it should be laser focused to targeted an immediate relief and supporting the second round of ppp money to keep Small Businesses afloat and i call on my colleagues in the house to bring this to the floor also were grateful for your Due Diligence and what it means for Small Businesses and those that keep americans employed and how passing the second round of the Paycheck Protection Program how much can you repurpose from cares what this means of economic recovery. We had 450 billion allocated on the three facilities. And that needs to reallocate that. But the ppe there was strong bipartisan support and we look forward to working with both parties. And that is signed into law today . Pick the president would support signing additional ppe many. We must act. And to restore or the economy. Do you agree reopening has jumpstarted the process to pre pandemic prosperity . Yes i do. And to keep the virus under control to take basic measures like mask and it goes together like a fast reopening to maintain these measures go together. How does the statebystate approach ensure success with those that are responding differently to the pandemic . In the question how to reopen exactly for the state and local level so i wouldnt be a good judge of that but with regulatory adjustments to allow banks to serve their customers and we think that has helped them serve their customers that doesnt endanger safety were open to doing more of that but frankly the economy is healing. It is. s i hope this committee can look at that as we go forward mr. Foster your recognized and muted and like the Sensitivity Analysis conducted earlier this year and with the banks themselves to have this information be public and when the tragedy of the last financial crisis in the months prior as pressure bills on Financial Institutions we did not use this time to raise capital until it was too late. Hopefully the prospect will help avoid a repeat of this behavior. Do you are using the results of the stress test if the restriction on shareholder dividend will continue to the Fourth Quarter. Will you be making these determinations on a bank by bank basis or the subject to the same restrictions . But that will depend on a lot of things but we will be looking to use the bank by bank approach and the uncertainty and volatility of indicators would you err on the side of conservativism and safety to make those determinations . We think of very extreme scenarios severely adverse so that has been our approach overall. Are you analyzing the living wills to make sure they are executed properly at a time of the covid pandemic with the workforce at home . There are no plans to change the schedule banks have to resubmit those on a regular schedule and we will stick to that schedule. I urge you to keep an eye on that because if we have to execute is not possible in the pandemic conditions we will regret that. Potential problems may not be confined to banks like the savings alone was a result of bets on the thousand small institutions and the taxpayer were on the hook which is huge compared to t. A. R. P. And the taxpayers got their money back with interest. Given the fates of small banks are tied to small and mediumsize businesses that are at risk of business failur failure, what should be worried about in regards to bailout large numbers of the pandemic continues . We spent ten years strengthening capital and liquidity and understanding and management and so far the Banking System is held up well can see from the stress test the things we need to do to test the strength of the Banking System. But so far we dont see the problems youre talking about there has been a 30 year trend of consolidation thats not a trend we dont want to exacerbate Smaller Banks will they are too much of the burden that are vulnerable with less resources to deal with the stress. We are watching carefully to make adjustments every chance to serve their customers and make it through this difficult time. One of the problems of financial regulations we fight the last war. In my limited amount of time with the new strategic framework of Monetary Policy. You discarded the idea and instead you consider a wide range of indicators. I urge you to do that publicly and transparently for inflation and unemployment. I recognize the gentle man from kentucky. I want to respond to my friends comments about bailouts i share the antipathy for what he describes as a bailout. It is important to point out the bailout is saving from mismanagement or excessive risktaking or private use for moral hazard. We saw some of that in the aftermath but thats not what we have here. We have a congressional response to state and local governments imposing restrictions those could be warranted in response to a pandemic others may criticize from being overzealous or draconian that this congressional response the main street Lending Program seem like a compensation so its important to point out that distinction i do want to ask about main street and i think there is interest among potential borrowers to participate in the program many are reporting the program is not working for them they have committed less than one half of the funds so an argument can be made is not performing to its potential so the updates are unlikely to move the needle this program may not be right for them in suited to ppe some of those that would need a smaller loan the ppe program doesnt help them because its limited with larger amounts of debt so initially is the fed considering publishing targeted guidance documentation for the smallest main street loans. The limit now is 250,000 we have very little demand below 1 million so we are not seeing demand and thats because the facility it tends to be larger size businesses it tends to involve a lot of personal guarantees and they guarantee a very Small Business and thats not the facility we currently have we have to start from scratch. The feedback were getting for those smaller loans the lenders are telling us they would prefer to exist their underwriting structure and the process for them to get into that smaller level loan. Lets talk about ebitda that does prohibit borrowers and that the fed had studied with those calculations for asset heavy borrowers that conditions do not warrant such changes at this time so how did you come to this conclusion are there ways to reveal tool for commercial real estate borrowers back. We hear these things to probably from the same people and we look for places where the Banking System in the lending system is not working and a big part of that is the market we dont have an answer to that because that make it possible and the servicers have to pay so we look at other places in commercial real estate. And our conversation where the Emergency Landing powers we appreciate the communication with your team on this issue. Can you detail what treasury is doing facing commercial real estate . We spent time internally if there is a way we can structure a program with the fed and there is a structural problem with prepayment penalties the best way is additional ppe funds so owners can pay their mortgage. I yield back the gentle lady from ohio. We heard a lot today about reopening the economy we also heard a lot about Pandemic Health and safety and director powell you said they go handinhand so to you mr. Secretary, we recently learned the white house scrapped plans to spend approximately 650 million through the mail because the president so were you involved in that situation with scrapping the plan . Just to be clear never in any of my Task Force Meetings do i recall that being discussed but i have not heard anything about that. Would you be looking at it that wearing a mask is helpful in preventing the spread now that you hundred thousand people have died . And where do you agree and then to have people go back to work adjuster no. Yes one of the reason we like ppe ea kept employees connected to their business and keep their healthcare. Submitting a brief to the Supreme Court to overturn the Affordable Care act which would put 20 million americans of their healthcare to be stripped and it has already caused the lives of 200,000 americans including protection for preexisting conditions taking younger adults off their plan now we hear about their numbers. I have been in congress eight years i have been voted against this dozens of times. I wouldnt want to comment on a particular Supreme Court case but healthcare is an important part of the support system. I will put it this way. Do you think stripping healthcare or not having healthcare would be bad for the economy . As you started having healthcare coverage is an important basis for people to go to work and why people work and it helps them to continue. So that is a yes having healthcare is a plus or a positive . 200Million People have died if i look at africanamericans of a percentage of the population 24 percent dying, dont you think healthcare please into keeping people healthy in the economy . Yes i do. Thank you. Chairman powell according to transaction data on the secondary market Corporate Credit facilities the fed purchase Corporate Bonds purchase Corporate Bonds. T companies and allow them to keep workers on staff. The gentle ladys time is expired by now recognize the gentleman from texas. As most of you know i am a smallbusiness owner and i want to thank you both for coming before the committee today with the Treasury Department and Federal Reserve have worked to implement the act and get resource i applaud you both for your leadership some local governments in my district in texas are sitting on the money they received from the corona ca really fun because theres uncertainty surrounding what counts as an eligible expense. One local government and my district would like to spend money for a local food pantry since many citizens are seeing g Food Insecurity as a result of the economic shutdown but they are not sure if it would be an eligible since the cost wasnt accounted for in their annual budget prior to the pandemic. So, secretary mnuchin what advice would you give to local governments to ensure they will be deemed equal public expense so we can get the money spent . We wil we will look at your specific question that we try to get as much flexibility as we can and as a part of the Traditional Congress all authorization to move forward we are inclined to allow for additional flexibility on the money thats already gone out to state and local governments. To make sure everyone at the Federal Reserve is on the same page in the privat the private d would decimate the insurance industry. You mentioned you were aware of this issue as it relates to fiscal stability and i hope we can get a little more substance on this issue since the Federal Reserve is involved in ensuring the federal institution let me check in on the Current Situation and come back to you at the moment much of the money we allocated in the act and others havent yet spent. The Nonprofit Committee for the responsible budget estimates the government has allocated for dispersed 2. 2 trillion of the 4 trillion congress has passed. Mr. Secretary, you have been deeply involved in negotiating the package and as we discussed how should we be viewing the economy to ensure industries in most need of assistance received while the other money allocated makes its way into the system . We are in a different situation than we were last time and that required us to do things across the board. I want to thank you for your efforts. Its pretty good right now and Getting Better and attitudes of people in startups are Getting Better. I hope one day we can look at why ability t towards a lot of g businesses to keep them from growing so thank you again for your efforts. We appreciate it. And i will yield my time back. I now recognize the gentleman from washington for five minutes. Thank you, madam chair. Chairmachairman powell, i want o discuss support today but before i do the announcement that made to emphasize. Im not at all exaggerating where i say its the most important thing to happen [inaudible] [inaudible] speaks right into the microphone so that we can hear you clearly. Thank you, chairman powell. At the outset of the pandemic this is time fo the time for tht physical power in the United States to do what we can to support the economy and trying to get through this. Congress responded it continues to deliberate further fiscal support. At the press conference on wednesday you said at the Federal Reserve projections for growth inflation and employment for assuming the fiscal support. With support for you assuming . Let me say that a big part of the good Economic News that we have had results from the fiscal support that came with the cares act so deserves a lot of credit for people to get to keep people spending and Good Business confidence and household confidence high. We dont agree on a forecast. Individuals make different assumptions. I think Something Like most privatesector forecasters are assuming some kind of a package passes sometime in the next few months, but there isnt any particular number that i would give you that would come out of the fed. Is it it not true that saide projections imbecilic knowledge in the fiscal support there must have been some assumption how else could you provide your projections . I wish it were that simple. The way we do it is what we publish as the individual is thl projections of the 17 people who vote or participants and they are free to make whatever assumptions they need and we do not survey them on every little thing you but i would say many assume some fiscal action that we didnbut wedidnt create a ti cant tell you what exactly was assumed, but fiscal action underlies many current forecas forecasts. Let me try this a different way. [inaudible] whats happened lately is the economy has proven resilient to the broad spread of the disease over the summer and also to the expiration of the cares act benefits so we dont really know what will happen. I will just tell you what i think the risk is. Is. As some plai some plan to savinh as the number of things. The risk is overtime they go through the saving savings thaty havent been able to find employment yet because it is going to take a while to get 11 Million People back to work and so they are spending declining soviet economy will begin to feel the negative effects at some time. Its recovering and that is a good thing and its hard to have any certainty about the path forward because we dont know which of the two forces will dominate. Does it not inescapable that the growth will be lower. It will be needed and i do refer to the administration and congress that have responsibility of this that i think that its likely more fiscal support will be needed. The time is expired and i recognize the gentleman from arkansas for five minutes. Thank you, madam chair. Thank you, secretary mnuchin for being with us today. Chairman powell i want to associate myself with the remarks of the Ranking Member but outlined the outstanding leadership we have obtained in the early days of the fighting of the virus and we appreciate your commitment to the country to restore the health of the American People. To renew the belief in the American Dream and rebuild the American Economy. I want to talk for a minute about this issue for Small Businesses. And i plan on finding a discharge position today to move congressman bill to the house floor which extends the ppe program and clarifies the forgiveness aspects. This is something that should have been done at the end of july. And i was pleased last week democratic members of mrs. Pelosis caucus are objecting to her leadership or lack thereof. I hope you colleagues will join me in signing the discharge position. Because the extension has outlined is a key component second, in my view the proposal that is in the senate bill is critical because it allows us to take this loss of the past six or eight months that we think is coming and put it on a 1 rate and its a better solution than the Emergency Loan Program used during the pandemic that is built to becomdueto become geara hurricane and not a national pandemic. The third point is the main Street Program and all of you know my views on this as we have talked about it in Oversight Commission hearings. In a typical washington, d. C ty. Issued the fed released its frequently asked questions and dumped ou out to the public on friday afternoon that they would not pursue this Asset Based Lending type of approach for a different main street term she sheet. I think that can be done, chairman powell, to the companies on sound footing to cut these that are not able to reach credit and in the concept of the backstop i want to press both of you wail it doesnt fit the term sheet you have to pay y that took four months to stand up, i still believe that Asset Based Lending is important and you have a key component in the frequently asked questions so i would urge you to get to urge you to reconsider and offer an opportunity to comment. We have taken a very close look as you know him as the secretary indicated, but we are happy to continue the conversation, and we will do that with you. I do believe that it can be done in the right way. And i think the three things that i commented on god the first two addressed this over loan size the chair mentioned, but i do believe there is a solvent niche out there of portfolio lending that can be done on a sound basis of offers somthat wouldoffer some liquidir hospitality particularly not the cmb per se but portfolio lending where they have a gap that we saw you with slow increases in business. You commented that the congress to give authority as it relates to the 500 billion for the Exchange Stabilization fund or particularly the 454 that wasnt related and that you proposed to the program for other uses. When we had a discussio the disf this in oversight reissued in ie first report that we dont believe you need any additional Congressional Authority to reprogram that and take additional risk. Could you comment on that, please . Cynic i dont think we need authorization to take additional risks and what they could verify i think the main street loans in general we will be taking losses because this is basically being underwritten. What i was suggesting is we would like to spend that on the other areas that could be better served. That unfortunately we do need Congressional Authority to use it in other areas and again i think we have a lot of money left over it its been approprid by congress that with simple legislation could allow many hardworking Small Businesses to get a second one. Thank you for your leadership and viable yield back. I recognize the gentleman from california for five minutes. Thank you very much madam chair. I want to thank the secretary and also the chairman for being here. I have to say ive heard some pretty tortured language and logic from some of my colleagues today and members that we are dealing of businesses but compensation for a regulatory taking sounds a lot like use my words against me when you say you wont vote for a Supreme Court justice. The reality is you get into these situations where logic is twisted into the other thing i heard today is we should pass the second cares act. When did that. We passed it. Called the heroes act and then another colleague said w colleae should let the senate said. They didnt pass anything. The senate didnt pass the thi thing. It was a pretty rosy picture of the economy, and i dont want to put words in peoples mouths thee secretary i believe said the economic recovery was strong. And if they would say that its not the only economy. Theres 11 billion americans that are still not at work, that lost their jobs, more than in the financial crisis. So i would think that they would agree we have a strong recovery. I do agree with the chairman said that we wont get a full recovery until everyone feels that they are safe from this virus. So i think its important that we do everything that we can but unfortunately a pencil now the virus has been in charge. So i want to ask this. I was watching what has been happening and it seems like they are starting to get a second day of. I am very concerned about the may have a second wave in our own country. And i am not sure that we are prepared for this. I also went back and did a love of reading and thought that the second wave was more devastating, not the first one, the second. Could you comment on how prepared they are and what is the plan in case it comes roaring back . The i would first comment on there is a strong recovery because when you close the economy and reopen it it is strong but theres still more work to do. As it relates to being prepared, and again i am not a Health Professional although i sat on the task force i think we have made major progress on vaccines and via rolls into testing. We have done a very good job at being prepared for the virus. But do we have a plan in case it comes back it usually has some seasonality to it and was expected to come roaring back. If it does come back, do we have a plan . From an economic standpoint they do have a plan for the economy now and thats why we want more congressional approval. As it relates to the health and administration of the task force they do have a plan coming in a major component of that is the Vaccine Development which is making great progress. Mr. Chairman, if i may ask you you said that until people feel they are not at risk. Could you elaborate a little bit more on that . There are parts of the economy that involve people getting close together in groups and that is travel, hospitality, entertainment, things like that. And i think people, not everybody but some part of the population will be reluctant to continue in those activities until they feel confident that they will be safe and that they will not be sick from doing so. If it isnt most of the economy, it is a piece of the economy, the reasonable piece of the economy where a number of people, millions of people are still not working and it will probably take some time for them to get back to work. Getting them back to work will depend on continued progress on the medical front including ultimately the vaccine. My time is expire has expired viable yield back. I recognize now the gentleman from georgia for five minutes. Thank you madam chair. Thank you for being here. But also as though a thanks for early on in the pandemic especially the way our offices worked together and your officers worked with the banks and the community is to tailor these things to where it would actually do something for Small Businesses. And as a result of that, one of the small things in my district that only has to branch is ended up making more loans than one of the Major National banks did nationwide and that is just the success into the engagement. I have two questions i would like to respond to something my colleagues brought up about the recovery economy. I think that there are areas that are recovering strong in the state of georgia the revenue reports came out a little over a week ago and the tax revenues for 2020 are 7. 7 higher than 2019. Thats because instead of using the heavyhanded government, putting longterm restrictions on people, we decided to trust the people that they would be safe and secure so i think its other states would like to see that type of economic recovery y may be they should address the leave the state or being governed. I know they are looking at ways of broadening the program that they all realize need to be broadened but there are some areas i would like to see us take a look at and one of those is interested in specialized firms that are purchasing credit card receivables from card issuing banks and the securitize the assets which enables the consumers with subprime credit to access the credit card which is so much the most vulnerable in our society right now. But the requirements prevent them from obtaining the loan so would you consider modifying to allow the firms to access this program . I would have to look at that in particular. Even a standardized cash flow measures you will make the loan in the markets and the alternative is something assetbased and i dont know these companies to know exactly what they are talking about, but we are happy to take a look. I will make sure the staff and gauges to give you some of the folks looking to do that and i think that it would be wise. Another issue is back to the ppe program, mr. Secretary. The forgiveness of the loan is very cumbersome and its putting some of the banks such as the one i brought up earlier into a situation where they are keeping those on the books longer than they had intended. Is there something we can do to streamline this Forgiveness Program so that its less cumbersome so they can start getting those loans off the books of the small links to open them up to make other more traditional Business Loans . We tried to streamline the process has been outlined. I know that there are some proposals in congress as a part of legislation we worked with both committees on not making sure we have the right balance protecting for the simplification. I assume you would be willing to work with us on that. Thank you both i know that this has been challenging but i think the Administration Responded admirably and well considering thwhileconsidering e crisis. I think we keep tracking and pushing forward we can get through this and make the economy is strong as it was if not stronger and i will yield back. I recognize the gentleman from texas for five minutes. I represent many in my district many of whom are first and secondgeneration americans who work hard to achieve the American Dream across the country they are facing an unimaginable price is with no ability to access a lifeline through main street vending. Despite repeated requests from congress including my own factors released on september 18 state conditions didnt warrant changes to allow vending to assetbased borrowers. Therethere is nothing else fore people to turn to. I want to make sure i understand your message to them. Right now we have money on the table, programs that are not being used in the programs that are being used but are not compliant with the cares and programs that have been drained because they worked. Your position is that they should be able to fail and should lose their livelihoods and that you will do nothing to help them. Do you want to carefully follow the law on the cares that . We passed it and to the extent you are not in compliance with the program included it its tie to get that done. It wouldnt constitute the wall. You either are or are not complying and you do not have programs that comply with the act in funding. They may be in a crisis now but im sure you could imagine what would happen after when we start picking up the pieces and scrutinizing the actions of short agencies. Right now we are using the power given to you for explicitly this purpose. You are using the power for explicitly this purpose for you so you can help countries. Businesses need a lifeline that they are not asking for bailouts. Its like those im talking about. Lending them money for ten or 20 or 30 years it creates a liquidity markets need ant recognize if they start divulging we are looking at another way of the crisis. I would say they are following the loss of the clea to be cleae second thing i would say is we want to help the type of businesses before talking about. In many cases they need grants and not loans but as a part of the appropriations, we very much support longterm loans. Particularly the type of businesses that they were focused on. [inaudible] again, we support additional money to the small hotels because that is what they need. Additional loans are something weve looked at. They dont fit in many of the cases the small hotels do not fit into main street because they already have other indebtedness and in many cases they are not allowed to take additional loans or they are too leveraged to begin with to qualify. So the small ones that do fit in you are saying they have a program for them . Whabut i say this as a part f the additional legislation, the sba committee has proposed additional money, longterm money for Small Businesses as a part of a new program and thats something weve looked at and we will support. Again, many of the hotels you are talking about dont have any revenues, so those hotels would qualify for additional ppe loans. Theres over 130 million that has been appropriated by congress that they just need authorization to use and that jt would be the best solution for them. And to follow up what he asked about a few minutes ago as it relates to the forgiveness. What i have heard from Small Businesses throughout my district and the state of tennessee we are thankful of ppe it literally saved our business. But there is the concern about the complexity of the forgiveness. So my question is have you considered administratively forgiving certain loans of 150,000 or less through administrative action . We have consider that. We dont think we have the authorization to do that in the context of the law. We try to make it very simple for Small Businesses. But there were some proposals out of congress that said we should automatically forgive all those loans. Your interpretation is you dont have the authority to administratively forgive those loans. We are usually 150,000 or less . We think we have the obligation to get the documents and fill out the ez form and then audit those. Unfortunately there has been some fraud and we are working with it on that. We dont think it would be appropriate to do a blanket forgiveness across the board. We have heard about how ppe kept employees on payroll. Frankly you deserve credit for crafting that and Congress Deserves credit in a bipartisan nature. The one criticism i have heard specifically in my district is they literally could not compete with the enhanced unemployment benefit and it was set too high. May be in an area like tennessee or mississippi or arkansas, i dont want to get ahead of the negotiations but if there is additional enhanced Unemployment Benefits in the next package is there a way to tie that to a locality . At the time there are certain places that would be too high or too low. As part of the executive action authorizing that with 400. 300 if the state doesnt contribute. We have proposed as additional legislation to have 75 percent wage replacement. Is that uniform across all 50 states . Ideally each state would take some time to implement that technology but it is capped 75 percent of previous wages. Phase one of our agreement with china that is executed earlier in the year, are you confident that china can meet its commitment to purchase 36. 5 billion of Agricultural Products this year . I believe they are on track and the ambassador and i are monitoring that very carefully. I yield back. The gentleman from florida. Thank you madam chair. Thank you for hosting this hearing today. Its been very good hearing you speak this morning. Writing a letter regarding impact of covid19 on the commercial Real Estate Market and i heard others talking earlier. And they continue to hit hard. And the pandemic with commercial real estate to turn it upside down. And over 100 colleagues with the Federal Reserve with its economic support with those that are fascia facing commercial real estate with the interesting crisis and they can still do that the Federal Reserve has that ability to help many businesses survive the distraction and on friday the Federal Reserve released a main street Lending Program stating conditions were not warranted. Do you care to comment . First let me say chairman powell and i both agree with you the commercial Real Estate Market has an issue. When people talk about Asset Based Lending traditionally they dont include real estate in that the market is its own market so that isnt necessarily part of the assetbased program some people in the house have to work on a proposal a preferred equity so it goes below existing that chair powell and i will continue to work on this prick we dont have a solution. We wish we did. Anyone would call him several weeks ago. To both of us are very familiar with the letter that you sent it will its hard in the problem just doesnt with commercial mortgagebacked securities but they contain a provision that says you can incur additional debt. That wouldnt involve the fed but that would be something for legislation. We do understand and appreciate there is a significant problem and people are looking for solutions. If we turn back 130 billion of ppe funds and then you find out all these people are suffering tremendously and come up with a large group of employees and i had the opportunity to talk to the chair of her area of california. I know how quickly we can get legislation in the negotiation of the heroes act but it still hasnt passed anything. I dont have much time left but a lot of these employees are everyday people and with that madam chair i yield back. I recommend mr. Hollingsworth. Chairman powell i was recently excited by the news of creating a more symmetrical inflation target. That was great news that we discussed at length privately and publicly up these hearings with a lot of underpinnings not just my annoyance but i appreciate you doing that think it will be a positive for the fed in the American Economy going forward. Turning to the temporary exclusion of treasury and deposits it was done through march 2021 with the concerns that increased reserves during this period of time didnt count it wasnt extended to or flowthrough through the g6 size indicator. Why is that the case was or any further discussion or dialogue . You have to check on that im not aware. I think that is really important to make sure we see that flowthrough in the Fourth Quarter the largest institutions will see those impacts also what you said a few minutes ago secretary mnuchin there is a proposal around congress potentially talking about preferred equity with the real estate borrowers that are most troubled. That is troubling. It doesnt feel like theres a good solution can you explain why . Ideally not to preferred equity with go government ownership have are you paid back issues . All of the above. What i want to emphasize there is real distress and challenges the longer we continue to talk about solutions the longer it will take to get to a legislative and administrative fix for those that are hurting across my district and my state and across the country i appreciate your clarity i yield back. The gentle lady from michiga michigan. Thank you both so much for being here. One of the basic questions want to review what is your primary role during the pandemic . We are here to serve the American Economy. That is a big part of it. Thats correct. And to operationalize the responsibilities. Prevent an economic collapse . Yes. Every time i passed you regarding state and local governments have insisted theres nothing the fed can do for cities and states and distress he did have a liquidity facility. The program is restrictive is it true only illinois has applied . We have done two loans and that facility has resulted in 250 billion of borrowing in the private sector but none prior. To state and local government going bankrupt would create instability . I think thats an issue. You dont think state and local governments are stabilized will not go bankrupt . States cant go bankrupt but cities. When the city of detroit went bankrupt is there an impact in the economy . Yes. I think so also my district hasnt benefited in one of the things i want to point out you dont have to land with penalty rates that wasnt created by statute. Its in our regulation. Why not remove the penalty rate when the state and local governments are at risk . What it has accomplished is to open the private market state and local governments are borrowing in record amounts at record low yields across the yield curve. But only two states have been able to qualify. Yes but they are borrowing in the Public Markets at a much cheaper rate. The chairman for what i understand for corporations the fed supports bonds. Are they more important than local municipalities . Because this is five years any of three years . State and local governments generally are not allowed to borrow to finance deficits so they are borrowing for liquidity in a part of the market is between zero and three years that is liquidity and thats where we are willing to lend but there has been a lot going on with longerterm issues 20 or 30 year bonds are issued because this is the backstop function has enabled the private market to work very well to serve the government. Just looking at what happened in the city of detroit im really worried we are not being flexible enough to accommodate for the state and local governments and you know much of the policy to stabilize the economy we need to uplift and make sure communities are protected check out the bill that i have to uplift our local communities act they appreciate that. Secretary mnuchin we have to prevent an economic collapse this is a huge issue probably deeper than the recession we went through do you believe another stimulus checks to stabilize the economy . I do. On record not to support the economic package that we passed including another round of stimulus checks for millions of americans that are unable to afford rent. Can you explain your position . I think the American People are confused do they need another 1200 stimulus payment . This administration does support another payment. But you are willing to support that payment that has been pushed back the let them go bankrupt bill . I take great pride the last two bills we did passed with overwhelming bipartisan support. We cant pass a bill in the Senate Without bipartisan support. Our job is to continue to work with congress to get additional help to the American Public. You need to be very clear that direct payments to individuals is critical to preventing economic collapse in the country. We will move to the last member who can raise questions both guests have a hard stop at 12 30 p. M. And we will honor that. The gentle man from North Carolina is recognized for five minutes. Thank you for being here secretary mnuchin less than 1 percent of ppe loans nation might have been processed on process to the forgiveness portal the ppe is waiting to see if congress will act on a bipartisan forgiveness proposal we see in the house and senate. The current one is confusing for Small Business owners and not what they expect its a burden on Community Banks that have a lot less resources than the large bank so the time for such a streamlined process was weeks ago but due to the delay with banks and borrowers the situation is more urgent under your current at doherty would you be able to implement a streamlined process as outlined in the paycheck protection Small Business act. I have to look at the specifics and get back to you i believe the answer is we dont have the authority to implement it but i would say the forgiveness portal is open to encourage Small Businesses to apply in working with sba to make sure they can process those as quickly as possible to provide Small Businesses tools to make it easy for them. Im glad the portal is open. Do you consider it to be a streamlined process is there anything you can do within your authority . We developed an easy form and we are happy to work on a bipartisan basis with congress if they want to pass legislation for blanket authority for forgiveness. Chairman powell thank you for being here. Your last appearance before the committees stated the Banking System is robust in the source of strength throughout this pandemic you cited the precedented influx of deposits and forbearance measures and the continued ability to lend for the strength to the covid19 environment while Many Industries understand during the first economic shut down my view is that the Financial System has been a crucial partner for the fed in congress to facilitate relief. I bring this up because of the recent actions taken by congress and the fed is called a bailout for banks has there been a bailout during covid19 . No i would not say there has been. My office keeps hearing from companies that are unable to secure shortterm financing but they use their working Capital Financing to run operations. They were too large to take advantage of ppp with no access to Capital Markets so how does the fed use its authority to provide assistance to these companies and supplies critical to the nations economy . Like in the fed do to provide assistance to them. With working capital looking at the assetbased facility we did a good deal of work in the sector and came away thinking working Capital Financing was broadly available its not a good thing im hearing is difficult for some i am surprised. We will go back and look at tha that. Is there something i should relay to these businesses they have not found her they are not aware of for support . We have the main street facility three different loan products all companies are welcome to borrow there. We have growing interest they are the ppp. Do you think there might be a gap between the ppp and the main Street Lending facility . We have been looking for gaps honestly we look at the working capital and did not see a big problem to solve that we can take another look at that. Thank you chairman i yield back. Thank you to our distinguished witnesses for their testimony today without objection all members have five legislative days with which to submit additional written questions which will be forwarded for response please respond as promptly as you are able without objection all members will have five legislative days to submit extraneous materials to the chair for inclusion in the record. This hearing is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations]