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

Max, treasury secretary Steven Mnuchin and Federal Reserve chair Jerome Powell on the impact of the coronavirus on the economy. This is two and half hours. This hearing will come to order. Todays hearing is a hybrid format and the hearing room has been configured to maintain the recommended sixfoot social distancing between senators, witnesses witnesses and otheren individuals in the room necessary to operate the hearing which we have kept to a minimum. For those joining remotely a few videoconferencing reminders. Once you start speaking there will be a slight delay before you are displayed on the screen. To minimize background noise please click the mute button until it is your turn to speak or ask questions. If there is a Technology Issue we will move to the next senator until it is resolved. I again remind all senators and our witnesses that the fiveminute clocks still apply and you should, those remote, stall, box on your screen labeled clock that will show how much time is remaining. Bwe will try to give you a gavel reminder when your time is almost expired. We. When your time is almost expired. To simplify the speaking order process senator brown and i again have agreed to go by sen you arty for this hearing. With that we welcome witnesses to this hearing, the honorable steven t. Mnuchin, and the honorable jerome h. Powell. Welcome to both of you. Todays witnesses will provide testimony as required under title 4 of the cares act. Congress has appointed nearly 3 trillion, appropriated nearly 3 trillion to protect, strengthen and support americans to fight the pandemic and also to stabilize the infrastructure of our economic system. Title 4 of the cares act provided a 454 billion infusion into the Exchange Stabilization fund to and facilities that facilitates liquidity in the marketplace can support a legible businesses, states, municipalities and tribes. So far a approximately 195 billion of funds under the title for cares at have been leveraged to provide trillions in liquidity back into the markemarkets of supporting credt flow in helping to stabilize the economy. Through the primary market andd secondary market corporate facilities, the term Asset Backed Securities loan facility, the mean streets Lending Program and the Municipal Liquidity facility. That leaves around 250 billion in funding remaining under title four of the cares asked. Theres been Significant Interestil in exploring ways the mean streets Lending Program which offers Financial Support to small and mediumsized businesses and nonprofits can be improved to expand its access and utilization. Earlier this month the Committee Held a hearing on the status of 13 and three facilities where witnesses made the case and provided recommendations for the change to the terms of th the mn streets lendinmeanstreets lendio broaden its access and use and to address commercial Real Estate Markets. In that hearing the president of the committee on Capital Markets regulations shared his view that small and mediumsized businesses need Financial Support to recover from the impact of the pandemic. He continued while the economymy is improving, given the depth to which it failed, there is a long way to go. Small Business Revenues continue to be well below pre pandemic levels and thes recovery has stalled since july. A key part of this Financial Support should come from the main Street Program authorized by the cares asked. In the same hearing, the president and ceo of the real estate roundtable painted a picture of the condition of the commercial Real Estate Market. He said its impacting their ability to meet their Debt Service Obligations which increases pressure on Financial Institutions, Pension Fund Investors and others. And he said it is pushing Property Values down to the detriment of local governments. Its causing much stress in pools for commercial mortgagebacked securities and its threatening to result in countless commercial property foreclosures. The situation must be addressed. In july i send a letter to each of you, secretary mcuchin and chairman powell urging you to expand access including by setting up an asset based addressinggram and the commercial Real Estate Market. In addition to expanding, there is a meaningful interest in opportunities to allocate thehe remainingdi funds. In august, House Financial Services Committee Ranking member henry and i send a letter urging you to implement the remaining funds under title iv to work to the fullest extent including by expanding the mean streets lending from progra form to suppress main street businesses, workers and the american economy. The Federal Reserves 13 free facilities play a Critical Role strengthening the economic recovery. Its important to continually assess what areas of the economy and Financial Markets continue to be in need of support and identify options for providing additional needed t support whether through expanding and existing facilities were creating new facilities. In july i sent a letter to the federal banking regulators urging each of them to extend and expand Critical Care relief where there is discretion emincluding relief from the Community Leverage ratio to at eleast december 2021. The troubled debt restructuring to at least january 1, 2022 and the current expected credit losses tole at least january, 2023. Since that letter id heard additionaoccurredadditional conh banks and Credit Unions. Have banks and Credit Unions experienced a flood of deposit inflow of deposits during the pandemic bu that congress was also tasked them with supporting the economy, particularly for the paycheck protection program. Their role in these circumstancesti cause thresholds to be breached and a ratcheting up of regulation that would otherwise not occurred that could keep them on the ofsidelines. The Regulatory Framework should account for these unique circumstances and enable banks and Credit Unions to continue supporting the recovery. The title iv also contains robust oversightci provisions. Section 4026 is what brings us here today. And it also established the congressional oversightsi commission which has held two hearings and issued for 4 repors today. A special Inspector General for the Pandemic Recovery who has today issued one report and continues his important work. During todays hearing i look forward to hearing how the Financial Resources provided under the cares act has benefited the American People and the economy. An update on the status of the 13 free emergencyte facilities including an assessment of the opportunities for and need to expand thing straightf funding program. Steps for the fed and treasury have takenen and will continue o take to provide transparency to the loans, loane guarantees and other investments under the cares act, opportunities to utilize any remaining funds to provide Financial Support and additional liquidity to the economy and opportunities to tailor the Regulatory Framework to account for the unique circumstances of the pandemic and the role of the Financial Institutions and whether congressional action is needed. Although thereve been positive economic signs in recent months, americans continue to struggle with and feel the effects of the pandemic and still need relief. Unfortunately, republicans repeated efforts to deliver targeted relief in areas where we can agree has been rebuffed by the democrats. Negotiating towards a realistic package that can actually get passed and signed into law would best serve the American People difficult time. I appreciate the work of the secretary and chairman powell to separate Financial Markets and the economy. Thank you again to each of you for joining the committee today. Senator brown, are you with us . Mr. Chairman, thank you. Its a pleasure to be here. While i am disappointed this hearing wasnt held fully remote, im glad to see the masks in the hearing room. A chair probably want to thank youem for your leadership and te National Mask mandate, something that no other republican i am im aware of has done. I know many of my colleagues, republican and democrats, when they see these trump rallies and people together shouting in both wearingum masks [inaudible] the rest of us should try to stop this virus. Today there are more people out of work than they were during 2008 financial crisis. Its as if we were through the crisis and wel while on the roao recover. There continue t continued to bd deaths per day. That doesnt show up in the photo print Quarterly Earnings and 22 states the cases are searching rather than receiving and scientists and publichealth experts my colleagues know that. Training they educate their kids at home or worrying schools open without sufficient plans to protect teachers, to debate the cafeteria workers, security guards and custodians. That doesnt even include our sons and daughters into the risks they face at colleges and universities. You wouldnt know that if you looked at the corporate profit forecast. Noe president and this administration continue to act like everything is business as usual because for them it is. It isnt really affecting them or their wealthy friends or jobs. Comfortable ceos are the people working the cash registers or claiming hospital beds. Tthey are risking their lives every day to keep on the table. Most ceos dont live in the neighborhoods where black and minority owned restaurants and businesses are shutting down. Think for a moment, all of us should think for a moment of the anxiety of the essential worker and the stress he faces. Think about coming home at night worried he might conduct the virus and you might be exposing your children and family. [inaudible] for the great procession power tax policy essentially abandoned industrial midwest. Communities lost factory after factory with no plan to rebuild the local economies. Entire neighborhoods and towns were hollowed out by zip code 44105 had the most foreclosures United States since the beginning of 2007. By the next year thousands of cities across the country were suffering. Millions of families lost their homes, this became ther story of the whole country because the government took care of wall street and the biggest banks but failed to take care of everybody else. Ten years later we have yet another crisis where cleveland is reflecting what happened across the country. Is illustrated pretty well recently they covered a big company that had offices in downtown cleveland and theyve had plenty of help to get through this pandemic. Companies borrowing money at record when Interest Rates and d collecting more tax breaks while at the same time its laying off its workers, 3,000 in cleveland are going to lose their jobs to get endemic wild but Company Executives keeps making money. A ceo may count at least 60 million a year. Its happening all around the country. Help is available for the big corporations while businesses struggle and workers are on their own. Losing jobs at the beginning of august 600000 workers in my state and billions across the country lost their 600 a week Unemployment Insurance payments because this president and my republican colleagues allowed to expire. 600 a a week more than 12 milln people out of poverty. What are these families to do, how are they going to make rent or their mortgage payments on october 1 . You cant tell them just go out and get a job. There are no jobs because the president doesnt control the virus. Millions are stuck inside their homes or separated as they stay safe trying to avoid contracting this disease. Black and brown communities including native american tribes the been hit the hardest by pandemic and still dont have equal access to the Federal Reserve lending facilities loans. We know that it would not have beebeen misguided back in februy and march the president of the United States had done his job. Fwe all know that, republicans anand democrats alike. We were not shocked by the coefficients of the president when he talked to the Washington Post reporter. But imagine if instead of whining to us the president treated the American People like adults and leveled with us imagine if he wore a mask if the president had worn a mask and practice test social distancing. If hthey had a plan to mobilizel of americas ingenuity and to scale up production of tests with Contact Tracing and protective personal equipment, businesses would still be open right now. Childrethe children would be ban school safely. Workers would still have their jobs and tens of thousands of grandparents would still be alive. Now americans are watching the stock market and economic advisers say the economy, they wonder what the economy they are talking about. Ohioans i talk to anyone that understands economics note that workers are the foundation of their economy. They know what happens when you let wall street run banks and ignore main street across the country. Ou for decades they watch factories close t, investment dried up and communities that once were thriving. They know what its like to wake up one day and realize the only job is to be had for bigbox chains with rockbottom wages and no healthcare and no power over your schedule. They know what its like to be treated as expendable by large corporations and too often by this government. And remember as ohio goes, the nation is waking up they realize the president thinks much of the country as expendable. I know not everybody feels that way. The chairman has said over and over we need more action from congress for money for unemployed workers in schools and to families with their rent and we need the government to actually lead and use our countrys vast resources to avoid a catastrophic recession. At the last hearing in this committee, all of the expert witnesses, the one chosen by the minority and the two chosen by te majority to become minority, they need the government to step in and support our families, something that the Senate Majority failed to do. The people that are not getting this message that we need the government to step up in a big way for unemployedie workers and Emergency Assistance and took it to School Safety of , local governments, Postal Service, the only people that are not gettine that message is president of trump, secretary mcuchin in front of us today and republican senators scattered around the room. Its not as if we are unable with taking action. Look at the tax giveaway we spend 2 trillion making the richest people in the country richer with a promise to grow the economy until it pays for itself. Happened. At it was incredibly unpopular but the caramel bubble omcconnell oe republican senators like he always does to vote for it. John wanted it, mcconnell wanted. Senator mcconnell has made sure that they are approved and hes been to the third debate go backwards to cut the Affordable Care act, rip away protections for preexisting conditions. Almost half of the people in my state has a preexisting condition to side with corporations over workers and now we know that hes even willing to reduce his position to confirm yet another Supreme Court justice when it comesow to doing the bidding of wall street, he can with the senate into action and he thinks Everything Else can wait. Most americans cannot afford to wait any longer against the Global Health crisis that will e spiral into an economic crisis unless we act now. Wewe face a challenge that requires the government to be at its best and Work Together and to do big things. We need an aggressive package for everyonech to help familiesn their homes to protect workers and keep seniors and veterans. Most democrats passed the heroes act and president of trump and republicans are hoping to be ready to do the same. We will now move to the testimony of the witnesses. Secretary mcuchin, you may go first. Please proceed. Can you hear me . Ranking member of oregon and members of the committee i am pleased to join you today to discuss the critical steps of the department of treasury and Federal Reserve havthe federal n over the last six months to provide Economic Relief to the American People as well as to provide liquidity to the credit markets, business and household. 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 u. S. History. The august jobs report showed that the economy has gained about 10. 6 million jobs, nearly 50 of the jobs lost due to the pandemic. The Unemployment Rate reduced a 8. 4 , a notable achievement considering some people had expected as high as 25 . Thanks to the programs provided by the cares that, we never got close to that figure. I believe thatd we will see a strong thirdquarter growth fueled by strong retail sales, housing starts, existing home sales, manufacturing growth, increased business activities. The survey production for the Third Quarter gdp is 24 . The recovery has been strong because 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 blending facilities. Economic three openings combined with the cares act of a economic rebound, but some industries particularly hard hit by the pandemic requires more relief. The president and i remain committed to providing support for american workersit and businesses. They continue to work with congress on a bipartisan basis to pass a phase for relief package. I believe a targeted package is still needed in thehe administration is ready to reach a bipartisan agreement. I would also encourage the senate to pass promptly bipartisan continuing resolution that was passed in the house. Treasury has been working hard to implement the act for transparency and accountability. We released a significant amount of information to the public on the website, treasury. Gov and usa spending. Gov. Weve released more information than is required by statute. The Federal Reserve also posted information on its website regarding the lending facilities. We have provided regular updates to congress. This marking my second appearance before congress that the cares act hearings. Additionally we are cooperating with variousfo oversight bodies including the new Inspector General, the treasury Inspector General, the treasury Inspector General for tax, the new Congressional Oversight Commission and the gao. We appreciate congress of interest in these issues and the devoted significant resources to the inquiries. We remain committed to working with you to accommodate congress has legislated needs and the whole of government approach to defeat covid19. I would like to thank the members of the committee for working with us to provide critical economic support to the American People. Thank you. Thank you, mr. Secretary. Chairman powell. Thank you. Chairman crapo, Ranking Member and others of the committee, thank you for the opportunity to update you on our ongoing measures to address the hardships brought by the pandemic. The Federal Reserve along with others across the government is working to alleviate the economic fallout. We remain committed to using our tools to do what we can for as long as it takes to ensure that the recovery will be as strong as possible and to limit the lasting damage to the economy. Economic activity has picked up from its depressed secondquarter level when much of the economy was shut down for this purpose the virus. Many Economic Indicators showed marked improvement. Household spending looks to have recovered three quarters of its earlier decline and likely going in part to the federal stimulus payments and expanded unemployment benefits. The housing sector has rebounded investments fixed shows signs of improvement. In the labor market roughly half of the 22 million payroll jobs were lost in march and april have been retained as people returnedhe to work. Both employment and Overall Economic activity however remain well below the pre pandemic levels and the path ahead continues to be highly uncertain. The downturn hasnt fallen equally on all into those least unle to bear the burden of the least effective. The rising joblessness has been especially severe for the lowwage workers and for women and africanamericans and hispanics. This reversal of economic fortune has upended many and created many uncertainty about the future. The full recoveryrt is likely to come as people are confident that its safe to reengage in a broad range of activities. On the policy taken at all levels of government. Since midmarch we have taken forceful action implement a policy of near zero, increasing Asset Holdings into standing up to 13 emergency lending facilities. We took these measures to support the financial conditions and more directly to support the flow of the credit to households, businesses of all sizes and state and local governments. The actions taken together have helped unlock more than a trillion dollars of funding which has helped keep organizationsr from shuddering putting them in a better position to keep the workers on and hire them back as the economy continues to recover. The main street vending program has been a Significant Interest to the committee into the public. Many of the businesses affected are smaller firms that rely on banks for loans rather than credit markets. Main street is designed to facilitate the flow of credit to small and mediumsizedd businesses. We conducted extensive outreach, soliciting Public Comment and holding indepth discussions with lenders and borrowers of allco sizes. In response to the feedback weve continued to make adjustments to provide greater support to the small and mediumsized businesses and nonprofit organizations such as educational institutions, hospitals and social service organizations. Nearly 600 banks representing more than half of the assets in the Banking System has either completed registration or are in the process of doing so. About 230 loans totaling roughly 2 billion for either funded or are in theed pipeline. Main street is intended for businesses that are on a sound footing before the pandemic and that has good longerterm prospects. But have encountered temporary cash flow problems due to the pandemic and are not able to get credit as a result. These refunds may not be the right solution for some businesses in part because it is they clearly that these loans cannot be forgiven. The Credit Facilities have improved the Lending Conditions probably including for the potentiapotential mainstreet bo. Evidence suggests most confidently get loans from privatesector Financial Institutions. Many of the programs rely on emergency lending cover the covt required the sort of the Treasury Department and are available only in unusual circumstances. By serving as a backstop to the credit markets or programs have significantly increased the extension from private lenders. However the facilities are a backstop designed to separate the functioning of private markets, not replace them. Moreover, these are lending, not spending hours. Many will benefit as though the overall economy, but for others, the loaned to be difficult to be paid and i cannot se by to see e in these cases it might be needed. Our economy will recover fully difficult perco. We remainn committed to using or oufull range of tools to support the economy for as long as they did. Thank you. Thank you, chairman powell. For my first question id like to keep the answers as brief as you can because id like to get to a few others. I want to talk about the need for additional relief in terms of further Coronavirus Relief legislation. I think both of you have said what we have done so far has been helpful. Bo its having the results youve talked about. But more is needed and i believe both of you have said that we need in this next legislation to be more targeted. Is that correct . That is correct. I would defer to the secretary and you on the actual content. Issuer and i understand that. There is a gap between the house and senate negotiation the senad positions on the next covid19 relief. That being said, there is also a sick vacant amount of agreement in the specific areas where if we were to pick up those specific areas where we do have relief and pass those we could have a significantnt positive impact. And ios would like each of you o comment on whether you believe, and i realize you have a hard time talking about what congress should do, but would it be beneficial to the relief efforts if we were able to pass at least the agreements we have already reached if we could take those letargeted areas where we do hae a agreemenagreement and move fon them . I believe there are significant bipartisan report that it could support that supports kids and jobs particularly for extending to those hardhit industries that need a second payment and guess i think that would be very meaningful for the economy broadly and for those most impacted as a result of covid. Do you want to say anything, mr. Chairman . I would briefly and i think its likely thatt additional fiscal support will be needed and i think these are great areas to be looking at. In terms of targeting and how we approach this, on july 3 31st i thank you both a letter regarding expanding the mainstreet Lending Facility to allow for the Asset Based Lending and for commercial real atate facility. Yesterday i met with a restaurant, many of the Restaurant Owners from idaho and theres a bill to try to establish a legislation to deal with our restaurant industry. They are both responded to be the biggest difficulty in putting together the kind of relief i had requested for Asset Based Lending and for the commercialg Real Estate Markets. Could both of you expand quickly . We have about a l minute left as to what the difficulties are and how they may proceed to get some targeted relief in those areas. I think as it relates to commercial real estate, the chair and i spent a lot of time on this and they were sympathetic to the issue. Issue. There werere structural issues n many cases they were in commercial mortgagebacked securities that have prepayment penalties and dont allow for additional funding behind them. But we continue to look at solutions. And i would just say that as it relates to the restaurant and broader hospitality industries, leaving those industries dont need more. What they need isst Economic Relief because they arein shut down as a result of covid. So it would be more of a forgivable loan. More ppe money and in this case very targeted businesses that have decreased revenues would be very important for saving jobs. And would you agree that ppe Program Needs to be made even womore flexible . The good news is theres strong bipartisan support for both flexibility on ppe and additional funds that are highly targeted. Mr. Chairman, do you want to add anything to that . Not really. Let me conclude by saying i agree with the need to move forward. I think the comments that you have made highlight the fact you are the one that is negotiating in most of the arena is. You were probably surprised to hear the attack today that you were not negotiating, but the fact is there is broad bipartisan support for many major efforts that still need to be taken. And i believe your testimony highlights the fact that is something we ought to be able to get Going Forward and Reach Agreement and get it done soon. With that, senator brown. Thank you mr. Chairman. President trump said with regards to the coronavirus, quote, i think we did a great job. Do you agree with that, do you think that the president has done a great job flex we have done tremendous on testing we committed to 160 million mcuchin sorry to cut you off, just i hope that the president dont dislocate your shoulders by patting yourself on the back saying good job. We are 4 of the population, 22 of the worlds deaths. Heyou bragged about the economy growing so fast, your words. The Unemployment Rate is significantly higher than germany and france, twice what taiwan isf an almost three times in south korea and japan, much higher than australia, twice what pretense rate is and new zealand i know you think the economy is doing well but if you talk to your wealthy friends on wall street, things are pretty bad for most and there were going to continue to get worse unless you come up witho a package. Let me talk about the package you just discussed. SenatSenate Republicans as you w offered what some call a piecemeal and the president said he wanted a bigger number than the 500 million, which republicans offered. If you want a bigger deal, they came up with something so small. Which republicans are opposed to going higher . Let me clarify im not bragging about the economy. Economy. What i said as we made a major recovery from a shutdown that we have more work to do and that is why we want more support ive probably spoken to Speaker Pelosi 15 or 20 times in the last few days and we have agreed to continue to have discussions about the act and i would encourage like we had bipartisan support in the senate, 960 and 100 cozier, we are proud and i specifically worked with you on many pieces of legislation. I want to go back. The senate offered a 500 billion plan. Economists over the country wanted three and four at five times that amount. You and th the president said ye wants something larger, so the president of the United States typically aside from the cliche when they typically say jump how high that the president wants something bigger and you said you wanted something bigger, so what is the holdup . Youve always been really good. Look at the tax cut, 3. 5 come and 70 went to the richest people in the country. Thats what you wanted, the cabinet wanted, the president wanted. He gotwe the Senate Republicanso go along wit with it even though they blew a hole in the federal budget. So, why cant you get the senae republicans to go along on a bigger number than the 500 billion package, what gives, mr. Secretary . Again i would emphasize i think you know this, but this requires 60 votes on the senate, and i would encourage the democrats in the senate to work with us. I think there are areas of support. Oulets pass things they agree n if we can always come back and do more. So its less of the issue of the absolute number and im sure you and i would agree that there are areas that need to be passed. I know that people say pass something minimalist because it did mostlyy affect wall street and then we will come back but considering senator mcconnell for people who might be evicted, senator mcconnell said theres no sensesed of urgency in all of the finest republican colleagues went along with that. You know tha that, and he went g with it. The reason people lost their jobs, another 800,000 workers filed for unemployment, 600dollar Unemployment Insurance came every week, kept literally studies show 12 Million People out of poverty. Thats 600neur a week. [inaudible] it evaporated because the Senate Republicans refused to act. The house had been at the Senate Republicans refused to act. Workers obviously cant get a loan or grant through the facilities, and i appreciate the work that the Federal Reserve system. People that lost their 600 could face for closure, what do you suggest a duplex would you suggest fosuggest for people tor 600 do if they dont have the money they need to buy groceries this week or with october 1 coming, they cant pay their mortgage or rent, but are they to do, mr. Chair . I think as you know because that expired the president was move forward executive actions that we are still providing those and i would encourage all democratic andnd republicans to sit down together. There is an agreement the time has expired. The president could have gotten his majority leader who always does his bidding and the Republican Caucus to go along with the democrats to keep the 600 coming. Dont ask what the president was forced to do something. You simply didnt step up. 600 a week. Rc 600,000 lost their Unemployment Insurance and you essentially you and senator mcconnell and the president of the United States is simply saying to the 600,000, sorry you are on your own. I thinnn think it is a gross misstatement and an exaggeration. And again, if the democrats are willing to sit down, i am willing to sit down any time for Bipartisan Legislation in the thsenate. Lets pass something quickly. You could get 47 democratic votes for 600 a week this afternoon if you are willing to do it, forever the one of those workers. We all know what that means in60 our states. We would all vote for it. Bring it forward. Before we go to senator shelby i would add by saying this is one of those areas i was talking about. We have the ability to move forward if we have the willingnesss to move forward on pieces of the plan we have agreementwe on. Senator shelby. First i believe i can change the tone and substance of where we are today. Mr. Secretary and chairman powell, i want to commend you for what youve done under difficult, difficult circumstances and what you want to do and your candor with this committee about a lot of things. Mr. Secretary, the first observation you talked about this and thats the economy. Weve seen for jobs,s, unemployment dropped and unemployment go up. In my state and alabama for example we were in double digits and now wee are at about 5 . We would like to go to three or four. We know it takes a while to do this, but we have made it out of recoverlot ofrecovery thanks to leadership that you are the leadership would face. When you were not only running the monetary system, you are the regulator of the largest banks. Tell us here today i ask you this i believe in february what is the basic condition of the Banking System from your perspective and how does this change in contrast with the 2008 . It is a different situation than we faced in 2008. As you know, we spent a decade working on strengthening capital requirements, liquidity requirements, better ability to understand and manage the risks that institutions are running. And i think you see the results of that now. The bank so farar have been a source of strength and able to absorb. Considering the problems right now theyve shown resilience, have they not . It is still the early days. But he is s yes so far theyve a source of strength. You talked about different views from the fed basically say we need a little inflation, and we do when we are trying to deal with the recovery. What is your outlook on that because we are dealing with price stability into the job market everything goes with it. The problem was too high of inflation. We remember that very well it was important to get high inflation under control, but we did. Todays challenge is a little different, theres this inflationary pressures widely around the world and you see in europe and japan for example extremely low Interest Rates, low inflation and the central bank because the rates are so low and inflation is s is belowe central bank doesnt have as much firepower as they would likenk to respond. So, we just want t wont inflato the 2 on average, not much higher, 2 on average that is what we want andwa that will gie the ability to have significant ability to cut rates when the economy turns down. Mr. Secretary, we have made great strides. You were stating whats happening. The data is there and you are doing a good job with it. How do we move to the next step . Because i believe that we are on the threshold of a robust and a sustained economic recovery that maybe we havent seen, people saving money, staying home, retail sales are down but ultimately people are going to get out and push the economy. What is your belief are not . The progress that we will make on testing and vaccines is sgoing to create tremendous encouragement for people to feel confident. By the way i want to personally thank you for your work on the cr. We want to keep the government going atpe whatever cost and i think its important and youy do, too. I would encourage more targeted relief for businesses, particularly Small Businesses that through no fault of their own have been shut down or have government restrictions on state restrictions because of covid. We should act quickly because they need the support now. They dont need to support next year. Thank you both for your service. Senator reid. Thank you, mr. Chairman. And welcome, mr. Secretary and chairman for your presence here today. Chair powell, youve indicated they cant succeed economically until and you stressed social distancing and wearing a mask. What about the economic effects of wearing a mask and doing things . Everyone wants to i think unanimously wants to reopen the economy and get back to full employment as quickly as possible. But doing that ithe thing that o handinhand with doing things like wearing a mask and keeping social distancing and that sort of thing is that is what will help keep the spread of the disease in check and enable more and more parts of the economy to reopen and i think particularly parts of the economy where there is a close personal contact, so its a very important impact. They are not being recorded in any way by the president that is a phenomenon that is continuing to see us dealing with the disease and i hope it changes. You also indicated the Downside Risk where the Small Businesses and customers and mom and pop landlords, state and local governments. Can you elaborate on the consequences of continuing to fail to provide support for these entities in the stimulus package . It provided great support and should get a lot of the credit for the recovery we have so far which has been faster and stronger than most forecasters anticipated. The risk Going Forward is people now are spending because they got money in the bank even though they are unemployed. They may have saved part of the checks they got where they Unemployment Insurance. Maybe they will lose their home or loseten their lease and so tt is the Downside Risk of no further action. We dont see much of that yet but it could well be out there in the nottoodistant future. With respect to rentals and mortgages we know theres a tsunami brewing because through the federal and local legislation has been for closures but that will end one day and unless we move and dramatically now and provide resources to help one of the key actors i think the secretary has the rules to expand access and flexibility and india including taking care of lost revenue, but i hope that we can do that. The facilities that the Federal Reserve has used our sort of and haventures worked well for the voters to get approval with respect to the nonprofit functions asking for significant revenues versus other aspects, can you comment on these facilities . We need direct functionalities. These loans cannot replace direct grants. They are there too provide liquidity. They are generally not l able to borrow to fund deficits. Since we announced, boiling among the government has been at recordui levels and the rate has been record low and that goes across the yield curve and rating spectrum so i would say that its now working pretty well and has accomplished what we could accomplish as a liquidity provider. We cant do transfers and of course thats why our facility is structured the way it is. It seems they wouldnt be borrowing from you. There is a lot of money involved here but its not going to get to the state and local government. As you said they neededf the grants. In the municipal facility, we go by the ratings and not by any particular financial requirements. We have a transparent set of requirements and that is what dictates access. Thank you, senator. Thanks very much mr. Chairman and mr. Secretary. The grand total of the lost revenue and additional expenses occurred in the municipalities along 600 billion the latter of which is likely to occur for a further outbreak of the viruss fault. We sent 500 billion to the state and local governments for the last bill. Thats why they would be talking about offending more at this point still isnt cleare to me that i want to return our focus to the facilities. I hear a lot of criticism about these facilities that develop the facilities havent been drawn down to th a great degree that therefore that is evidence that they have failed. And i think that we need to remember what the purpose was in the first place. The whole purposese behind settg up the facilities and making them available was to allow private markets to function again. We had frozen capita have frozes and inability to access credit. Theyoz had a very frightening ad very damaging catastrophe because credit was not flowing and wasnt able to follow. What these programs were meant to do in my view iss to get the market functioning again. They were not meant to systematically bail out companies at all were to be a substitute for the fiscal poli policy. They were meant to make sure credit worthy borrowers be they corporate or municipal would be able to access credit. When i look at what has happened since concert for me whether you look at macroeconomic data as the secretary pointed out and the chairman and i think also has come back faster and more robustly than most of us thought it would definitely get the private and Capital Markets, they are functioning. In fact functioning at record levels of volume and in the municipal nearly record Interest Rates. So i think the rational conclusion is that this been remarkably successful. There are some sectors especially from narrow categories where weve still got some problems on the assetbacked lending we talked about, but i would like to ask the treasury secretary to both just comment if yo you would one availability of credit for credit worthy borrowers. What is it like, what are the Capital Markets like, what are the lending markets like, or credit worthy borrowers in america able to access as a general matter. They would agree with you b exactly what you said and i would remind people the chair and i treat the first few facilities even for the cares act was passed when the markets were literally shut down. These are emergency facilities, they are not intended to beey subsidies into the best is not having to use them. So the announcement and commitments to unlock the markets as i said in the past Companies Like boeing were able to borrow 25 million in the private market and not have to come to the government. Many of the Large Airlines turned down the loans that we were offering them for the same reason. So i think that thereve been enormously successful. And in the areas where they have not worked its been primarily entities that reallyy need subsidies and its not just a lack of financing. I would agree with all of that. We havent made a single loan to a corporate directly and yet Something Like a trillion dollars in financing has happened so clearly for corporate is working. But the same is also true i think its 250 billion in issuance including some of the ones that access to the facility have been able to access the public market. Public markets are out there and they are working into the pricing isce pretty good. So i do think that as marketbased facilities and the earlier ones that we did have all done their jobs pretty welle i think this is a very important verification and its appreciated. Senator menendez. Senator menendez is not available. Senator tester. Thank you mr. Chairman. And i want to thank secretary mcuchin and chairman powell for being here today. This question is for you, odchairman mcuchin. Quit was referred to a couple of weeks ago when we heard from three witnesses of varying views they were all ibut they were alt about whatsne happening now. The 500 billiondollar treasury slush fund isnt making it [inaudible] workers, families, those are the folks that need the most assistance right now. Many continue to struggle. Theres been help which i agree with but what about the restaurants, gyms, breweries and others that are bearing the brunt of this crisis over the Health Debate the health is still there and i see a lot of big names in those businesses they may need support but they have only been able to utilize the facilities and a repeat though businesses have benefited from the program so my question to do i you is what are you doio help the real main street businesses that are in distress . If this were a treasury slush fund that i could use, i would reallocate to help the businesses immediately. Is but i need congressional authority. Ive encouraged congress that we would be willing to givene back 200 billion to be reappropriated. Theres also 130 billion of unspent money in the ppe, so i would encourage that we worked together iworktogether in a bips to specifically helpo the types of Small Businesses that you are referring to. If you asked for the authority to move back to the mainr street businesses . Ive asked for the authority to reallocatebu that. That is in the most recent proposed legislation and ive also repeatedly asked for it to be reauthorized if we could use 130 billion that is sitting there to help the street businesses. I would say this for thee senators on the call. We had a proposal. Have a proposal. Senator mcconnell here a week ago had they ended to privatized education and to put impedance. Why this cant be brought to the floor makes no sense to me. Chairman powell, ive been told that the reason the stock market looks so good is because the fed has been buying a lot of bad death. Could you enlighten me on what you are buying and how much the fed has put out by the bad backs backs that must be a reference to the secondary market which has brought the range of 10 billion in total. We have brought no death from any Large Companies in the primary corporat corporate whice main facility. So, of that 10 billion that we brought in the secondary market, almost all of that will be investmentgrade. We brought very little. We brought some in regular bombs but in terms of the broad Financial Markets, it would be a drop in the ocean. You dont agree with the statement that that is why the stock market is performing as well as it is . I dont agree on the premise that weve brought a lot of the socalled bad debt. I dont want to comment on the level of the stock market directly or indirectly but its the case that we brought a lott of socalled bad debt they havent. After the first quarterly cares act i submitted questions r. R the record and while i received answers from the chairman i received yours last night. They were adequate to put it generously, so you are here. Im going to give you another opportunity. What measures are being put in place to avoid another data breach from occurring . Could you repeat that i had a hard time hearing mcuchin what measures it has the treasury put in place to prevent another coronavirus data breach from occurring again. I apologize, what was the question. Holy shit i thought we had Better Technology than this. What about the data breach from occurring again . Im going to have to look into that. Im not familiar with the tribal data breach that you are referring to me that i will get back to you quickly. Thank you very much mr. Chairman. Thank you. Senator scott. Are you with us . I will start with a question for chairman powell. Monday the house passed unanimously legislation that would require the Federal Reserve to expand access to emergency Credit Facilities by removing a bias against the nonincumbent Credit Rating agency that serves the middlemarket. We introduced similar legislation late last week and im optimistic that the senate will act on this legislation soon. However, i do not believe congressional action shouldim be necessary, given that you have the authority to resolve this issue immediately. What are your plans to level the Playing Field in your facilities for the nonincumbent . We need to create more flexibility with access to resources. That would be helpful. Next question i have been fairly outspoken about the goal of Building Access to credit and increasing economic opportunity. It is especially tough the impact the pandemic has had on blackowned businesses but due to reports like the wind from the chamber of commerce which found 66 percent of minority businesses are concerned to permanently close their doors and 13 percent of minority owned businesses who applied for a loan to failed to secure funding and i am shocked at how dire the statistics are. With the recent comments he cannot find talented individuals to be employed at wells fargo better to understand the plight of so many minority owned businesses if the ceo of wells fargo believes he cannot find enough talent than that is stunning. It is imperative the underserved communities are not left out of the economic recovery to make sure they can have access of the cares Emergency Assistance program can you describe those actions of it has taken this pandemic has had on blackowned businesses as well . Let me agree this is a troubling situation will probably the pandemic is falling heavily on minorities and other groups. S. Weve done a lot of outreach to make sure they take part of l facilityquidity within the same with the Community Development financial institution. And again we held webinars with a lot of outreach to make sure they are included in the program and with the loans we are making they are probably available to everyone who qualify. But these are loans that mainurs street is for larger companies. Thats larger than a lot of minority businesses and ppe is an excellent solution. Thank you chair powell and secretary manu chan would agree to help market the smaller businesses under 30500 employees to the ppp has been the effective strategy there are few businesses that qualify for the main street Lending Program figuring out how to connect the dots and i would imagine if im discouraged by the comments of wells fargo ceo that many entrepreneurs and Small Businesses see the entire financial industry with a raised eyebrow on the access when you see 13 percent of those which are unable to get the credit necessary even though we are the guarantor. Thank you very much. Senator menendez. Thank you mr. Chairman to both of our witnesses and secretary i appreciate your responsiveness im not sure i like what i hear but i appreciate your responsiveness so you thank you whenever you call you have been very responsive. So is it a good idea for states to raise taxes with hundreds of thousands of essential Public Workers sent off the frontlines and sent to unemployment during a pandemic and recession . No it is not a good idea. I agree. Not a good idea. So you both agree despite facing a 3 trilliondollar deficit thiss year this is bad Economic Policy which would cause additional pain during this recession. Is that a fairr statement . We have to be careful. But i am supportive of additional fiscal measures as i have noted earlier. I would add that there is a time coming we need to get back on a sustainable fiscal path but we are still in the middle of the pandemic. I agree. Thats my point in the middle of a pandemic. I would note that once again the states and local governments are still in the 500 billiondollar area of need. And like the federal government the communities are facing skyrocketing cost due to the pandemic but they cannot borrow money to give the crisis instead they are forced to do the unthinkablegh of teachers and nurses and firefighters and other essential workers when we need them thete most part there is bipartisan support to avoid such a disaster with 500 billion included in the smart act that introduced back in may to mirror the bipartisan house bill that exist. Even President Trump said he supports Something Like the one one. Five bipartisan proposal. As the lead negotiator for the white house are you optimistic about getting Senate Republicans to support President Trumps call for a much larger stimulus packagepr . The president has expressed flexibility to give more flexibility to state and local governments and for the money we already sent and as i said before we look forward to sitting down with both democrats and republicans to see if we can agree on bipartisan support that iso necessary across the economy targeted. I appreciate that but the bigger challenge with those in the Republican Caucus which senator mcconnell said there are 20 members who dont want to vote for anything more i think theres any economist that have said not doing anything more in the midst of the pandemic will meet the challenges of families and Small Businesses and getting us back in shape o. In june chairman powell issued a statement on racial equality thatat said everyone deserves the opportunity to participate in our society and economy and guidance from Monetary Policy to ensure fair access to credit across the country. Before the House Financial Services committee to say the rise of joblessness has been severe for workers and africanamericans and hispanics. Would you agree with those statements . I would. I heard from a number of minority owned businesses suggesting with ppe they are minority owned businesses for example it is an essential need to informing that the middle market we have an opportunity to demonstrate our commitment and the implementation the main street problem to identify what strangers one what could share the analysis with the minority owned anticipation. Senator warner has been working on and then with 10 billion that could be leveraged to 100 billion of immediate lending that are especially hard hit as i would encourage this committee to look at that proposal. Thank you chair men and secretary. When im home and nebraska every weekend the most common question is about the ppe supplication so to see the simplified forgiveness for coming that we are pushing the sixmonth deadline which Small Businesses do . We did create the easy form there is bipartisan support for going much further which we need legislation for and we werent supportedrtr, with 1,750,000 with the presumption for allow us to audit them. Do you have any ideas on those specific proposals with regulatory authorityec ands . And then to maintain fraud protection. I totally agree. So iss your view about where you know where we are then negotiation would you recommenda that the media length form . I would perk i would encourage them to move quickly and fill that out and out with legislation but if i can get legislation that would be great. Im interested in both of your views for the implication for the Real Estate Market with the transition we have seen over the last six months. I am interested in housing and commercial Real Estate Market. Clearly they will have significant implications. We dont know how long they were a lot long they willig last homes in the suburbs and second homes have gone up maybe in some cities the value has gone down but its hard to say. Probably some of this is sustained and people will work from home or. Its hard to say ten years ahead would really be different . May be at the margin but is something we will be watchingat closely. No question on the commercial real estatee market there will be an impact the only good thing that has come out of this that many businesses have figured out we can work effectively remotely so partial remotehe work is here to stay is here to stay conversation had a lot of commercial Real Estate Property and said during the height of the covid 70 percent any given day travel personal leave or sick or vacation or remotely working but when they cameh back after being at 0 percent they started at 29 percent and the experience they have so many that were in commercial real estate spaces were still zooming and engaging telephonically with people doing remote work they dont see themselves getting back to anything like the density ever i appreciate that point we cannot see into a five or ten year crystal ball but its important to keep conversing between article one and article two to keep our committee in this domain the chairman had to step out i was supposed to call on someone that he has returned. Senatoror warner. Welcome to the witnesses we have differences but i want to commendd chair powell and members of this committee will close to the occasion with the c. A. R. E. S. Act i appreciate those what the secretary and the approach we took we desperately need to get back to that approach ive never seen a bigger disconnect between the economy and right now i also want to echo what senators scott and senator menendez has said and thank them for being part of the jobs that the secretary referenced their willingness to work on this legislation it will take billions of unallocated and directly invest that has leverage those dollars that senator scott has so aptly pointed out and those that are shut down that you can and must do better. Ckchair powell we have gone back and forth but i would argue we said earlier in the week on your testimony with main street with the fed capacity with millions of loans and argue the way to do withe that with the direct equity infusion is to and for those smaller institutions and with those yes mens and support programs to service that community and im very hopeful when it comes to an agreement and to make that covert relief package you want to get to a question but starting the chairr powell your two predecessors liberal and conservative that we need to make substantial Stimulus Investment by echo my the majority of the plan that was one third of the size of the Trump Administration suggested is not a good faith effort we are not great getting another covid package out my state are hurting i agree we need to have the presumption that they can resume to be grants and make that loanat shorter. Can you address the issue in isthe targeted belief in that which was most effective. I will leave the details is not appropriate for me to express thee details in the recovery so far has a significant degree to the c. A. R. E. S. Ad act that congress provided that while the economy has been doing better than expected there is Downside Risk of no further fiscal support. The people that still have 11 Million People whose payroll jobs have not gotten their job back they are now they can spend because of Unemployment Insurance and the checks but there is a Downside Risk to the economy probably coming in some form of that support doesnt continue. I ask you both if the risks of the economy longterm greater or less if we undershoot or overshoot . Under stimulate or stimulate at this point . I would just say we have to. We will come back to a place need to get the government on a fiscal path but i would not prioritize that now in the middle of a pandemic. I say forget the longterm the issue is now some is better than none. s i would encourage again bipartisanul j support and again let me recognize this committee and the great work bithey did and the chairman and the Ranking Member of the want to sit down i would be willing to come anytime to continue to work with you and the chairman and the Ranking Member of the want to sit down i would be willing to come anytime to continue to work with you. Of the people who work in almost anywhere place in america like 100 senators have been traveling on airlines going back to may we all had the experience i have had multiple times the gate agents are pilot asking about the status and negotiations for additional relief for airlines. Just this past weekend flying back to washington a Flight Attendant literally hugged me in my seat then quickly apology energized fororup a violating social distance we had masks also is okay and was brief but working for 20 years and was afraid she was about to lose her job in early october in the first time shes ever gone on unemployment. I told her we are still working to do everything we could to avoid that fate. Because not a singleha o personn the airline or ancillary industry or any business from frontlinery workers up to the ceo are responsible for the fate these businesses find themselves in is the response of the Chinese Communist party covering up this disease from the beginning secretary with each and what is the status of the efforts to find a relief the Airline Industry in particular . Ef i have been meeting with the leaders of the company as well as the employee unions sure those workers would like to hear what you have to say as well. The work that was done in the first bill was extraordinary and literally save the entire industry. I know senator worker and others have opposed extending more people support payments in return for not having layoffs and the president denied this approach. Is there anythingof under existing authorities under the c. A. R. E. S. Act or prior law to help the Airlines Avoid the coming layoffs . Unfortunately there is not. We are encouraged. There is a lot of money in the loan program we will not use specifically for the re out one the airlines and to reallocate that. You noted there is still 11 million americans have not gone back to work on those who did at the height of the pandemic can you give us a sense of the other industries and businesses those 11 million americans are concentrated . Yes page numbers of people that are stillll employed that have contact withg the public hotels, entertainment, retail, s all the places you get people in groups together facetoface thats not all of it but a big chunk of the remaining unemployed. Elected officials experience this with time for oftravel that we use to spend in public and i for one learning about the impact the virus has had. In those industries the single best thing we can do to get a vaccine and get it under control putting aside fiscal and monetary relief just given the nature of travel and tourism is that the single best thing . Yes in the long run it will take to get Business Travel back to near where it was. So in your written testimony 13 different programs the Federal Reserve has stood up which has performed the best give them the stated objectives . The original ones stopped quickly the line on shortterm wholesale financing markets very early those succeeded also the Corporate Credit facility opening the market without making a single loan and after that the pp lf was successful to make small banks to make ppe loans and get them off the books to make more and then that we have a quarter of 1 trillion which is much higher than even last year beforere pandemic there is a lot of success and sound difficulties mainstreet is much harder and much more difficult. Thank you. Senator warren. Mr. Chairman. Thatat pandemic and recession have that communities of color the hardest. We need a policy response that acknowledges that. Is equally important to recognize racial inequality is amplified by the pandemic not created by it even was strong Economic Growth measures of economic wellbeing for black and brown americans have lagged far behind those of white americans the last time you before this Committee Chairman power you said the persistent path between black and white americans was an unhealthy feature of our economy. Is that still your view . Yes itea is. Good. I agree. Since created in 1913 congress has spelled out the mission of the Federal Reserve to keep unemployment as low as possible to make sure we have a stable Financial System the twin goals of the had a new have tools to accomplish those goals like how much a family is on a mortgage in your decision how quickly someone gets credit after a pay check is deposited for black and white families face very d different realities and that means they affect the families differently so the fed took a step in the right direction to make it clear to the mandate keeping Interest Rates low longak enough to reach all households not just those doing well already this is especially important because historically in a time of crisisis black unemployment jumps faster and takes more work to go down. That should not slow the economic stimulus before black workers see economic gains so to interpret that mandate is a good first step. I believe the fed could be doing more. Thats why i have introduced a bill with chair waters and senator gillibrand for the to use all the tools to close racial economic gaps. When you are here payments ago you said the fed will be looking for ways to use your economic tools to do more to address Racial Disparities. Have you identified comprehensive list of policies the fed can pursue in order to make good on these commitments . What is on your list mr. Chairmanon . You can see on our part of a heightened focus on economic disparities including racial and if you look on the website on the front page we have all the things we are working on in that l area that has become quite a broad set of data i collection research. The reason we do that is you give us maximum employment as a goal so now that is broad and inclusive of the new goal and framework not just looking at the aggregates that the demographic groups and different measures. We are doing the things we can do with our tools to address these issues. I think the far stronger and more important tools are not those of the fed but we are in should be using our tools to the extent that we can. All of that is taking place under the current mandate i dont thank you need to change the law. I appreciate that you are trying to do this. But the first i asked his name a couple specific things you arebu doing what has been on your list of the last three months . So what changes did you make . For the first and most important the one i mentioned was to define the maximum employment girlhe o broad and inclusive. I mentioned that. What else . Whatnc other things . I would point to the fact we have been outspoken at the fed with our commitment toat diversity and justice. I appreciate that mr. Chairman but words are not good enough on this issue. Every Economic Policymaker including the fed should be taking steps to confront racial economic disparities head on. This is just not a onetime exercise i appreciate you say its important to you but the fed needs to focus during your tenure and all future Federal Reserve chairs. Thats why i have legislation to require the fed to talk about these gaps as part of regular into congress and also ensure the fed uses everything in the toolkit to eliminate those Racial Disparities are so much more the fed could be doing and then with the merger applications to make sure they hit playing on Bank Accounts faster and i get it the fed cannot solve every economic problem on its own but that is not a helpless bystander. Decisions matter and mostd in our vulnerable communities and is time for the fed to step up. Thinking mr. Chairman. Thank you to both of you for joining us today. Despite the challenges we have faced standing up in the first place south dakota ends have been overwhelmingly supportive of the belief the ppe brought and recently however i started to hear concerns of those who have experienceded challenges with the portal. Senator sass began this line of questioning want to add emphasis is considerably different and to fill out the forms. One lender in particular sent me a note but it points out that frustration our lenders have in terms of openly Small Businesses. This is a quote. The forgiveness piece of the ppe is a disaster i have 750 loans out of 1381 under 20000. Fifty are under 2000 basically the same forgiveness process as the loans of my largest borrower of over 4 million the simplified version is not that simple. The gao has studied and says it takes a borrower 15 hours to complete it and a lender an additional 75 hours to process. Our borrowers are not happy to be there are we as bankers this is not what we signed up for to get disaster payments to our customers we are trying to pull off the borrowers under 150,000 they are getting anxious we busted our tails off and we are getting screwed by the process lenders feel they have been let down there is more than a little fatigue. Mr. Chairman i would like to ask unanimous consent additional statements i received with that process to be entered into the record. Without objection. I understand women it and what you can do with regard to forgiveness. But simplification and should be something we need to take a second look at and i would ask if you would work with us if there isnt a way to find a path forward on the near even if we cant get more legislation to simplify this who were we did go above and beyond to get the set up in the first t place and doing a marvelous job to get the money out. We will work with you and we support legislation that simplifies this and doesnt cost any money and we still retain our right to have the sba audit as appropriate. Mr. Secretary i agree. Whatever number we put togethe together, the ability to go back and audit at a date in the future is critical. We dont want to have fraud involved. But it looks like there is a huge amount of work out there we are expanding lenders to do that basically they will not get done in a timely fashion. We will have a problem we have to address if you find a way to resolve this issue. I will go back and address this with the sba this afternoon. Thank you mr. Secretary. Chairman powell i understand the focus needs to be getting our economy back to a place firing on all cylinders but can you briefly discuss how you view the evolution of the feds Balance Sheet to recognize this is a different type of a situation from back in 2007 through 2009 . We talked then what was on the Balance Sheet and moving around can you share the philosophy you like to follow with regard to the Balance Sheet today . It continues to grow because of asset purchases and it turns out the volume of loans we are making under the programs is much less than might have been the caseee which is to say they havent worked but we havent had to buy a lot we are a buyandhold investor we allowed access to mature and run off and certainly we are a long way away fromis that at this point. He will start doing that until way down the road then we will. The economy will grow and the size of the Balance Sheet relative to the economy really is the metric and we can get that down over time but its not something we focus on in the near term. Thank you mr. Chairman. Thank you mr. Chairman and Ranking Member and secretary for being here. Ive been listening to the testimony and mr. Secretary i understand you and the chairman agree additional for school help is needed and the economy also hope you woulds all agree we should provide that relief in the most effective way possible for working families to boost the economy and the cbo just issued a report september 18 about the impact of the c. A. R. E. S. Act. Of you had a chance to review that cbo report . I have not but will do so this afternoon. I encourage you to do that we had a Budget Committee hearing yesterday. I asked the republicanom appointed director of the cbo about the revision and the report that indicated state and local governments was among the most effective tools for helping working families and boosting the economy. I encourage you to dong that. You are aware of the fact during the negotiations of the c. A. R. E. S. Act the original was all put forward by senatoria mcconnell did not include any of appropriations for state and local governments . It provided money to education which would have saved state and local governments money. Mr. Secretary that goesmo directly to the Education Department which is good and we increase that at the time but when this issue came up senator mcconnell talked about state and local governments go bankrupt. Of course the most recent puzzle heap on the floor of the senate does not include any of money for state and local government even though the cbo reported is the most effective ways but as i understand yourt testimony, you agree additional state and local support would be i helpfu . Yes we do support somend additional aid. I like to ask you about our statement on National Television weeks ago and im quoting what you said before we got into covid19 i thought the debt was very manageable. We had extraordinary growth. We are creating go to pay down the debt of time that was a statement you made on fox. I asked the republican appointed cbo director about that statement yesterday in a Budget Committee hearing and with respect to the claim are creating close to pay down the debt, he simply said thats not true. That budget did not show that and it was flat out wrong. Went to focus on the part of your statement where you said prior to the pandemic focusing extraordinary growth because in 2019 before covid19 hit Economic Growth was two. 3 percent. Is the extraordinary growth you are referring to in that interview . We were on track for Significant Growth beyond that and that is correct. You are not on track for Significant Growth mr. Secretary overestimated the growth repeatedly. President trump talked about 4 percent growth and the lkason i ask is during the second term of the Obama Biden Administration and the economy grew the two. 4 percent per year. In fact slightly higher than what you are talking about just for the pandemic. So by your definition those four years of the Obama Biden Administration experienced extraordinary growth . I will be happy to go through my projections with you offline but it was beyond all of our projections and again we had projected 3 percent over time which is something that has not been done in years3 . Mr. Secretary it is simply a difference between projections and reality. Reality is Economic Growth over the years of the Obama Biden Administration was slightly higher than Economic Growth in 2019 which you called extraordinary growth so let me ask you about President Trumps payroll tax deferral where workers dont have Social Security taxes taken out of their paychecks the end of the year but then they owe the money and have to get back. The private sector wants nothing to do with this. It is a shell game. But i wrote to you about this along with my colleagues sending a bipartisan letter asking you that with respect to folks in the military and federal Civil Service if you at least give them the choice as to whether or not to participate and dont force folks in the military or federal employees to participate if they dont want to do it. You give us a brief answer mr. Secretary. An answer to the letter and what your answer is. It be happy to follow up with omb who is responsible. That is a reasonable issue of people want to participate but i will follow up with them. Senator produce. Ti hes not here . Im next. Mr. Chairman tell me how muchot money is left not without leverage in the main street Lending Program . Without the leverage . That is just the equity we committed 75 billion so most of that. Is left . Yes. With no leverage. Assuming we will not use that in the next six months , of all of the alternatives to try to stimulate the economy, what is the single highest and best use of that money . We are using some of it as were speaking. How much . I think that school loans i know maybe ten or 20 or 30 billion by the end of the year that is with leverage. Suppose we have 50 billion left, let me put it another way. Is there a higher and a better use of the main street Lending Program given what we know right m now . This is that i have a strong desire not to get too deep into the fiscal questions but there are some things you have talked about today. That would be ppp and then after that i would Say Something more for those who remain unemployed. Mr. Secretary do you disagree or agree. I agree with that not just that money but the 200 billion i have on the sidelines. So if we could agree to take 50 billion of equity from the main street Lending Program and commit that to for example pp ppp, do you think that would help the economy . I do on top of the 130 billion sitting there on you. Do you agree with that mr. Chairman . I doo but there is a 200 billion i would take that first rather than directly from main street. The part that has not been allocated at all is 200 billion. I understand. Mr. Chairman, what will happen if we dont pass another coronavirus will bill . Spending will meet in the 11 Million People and actually there are many more who is working lives have been disrupted and some of those will have a hard time getting back to work because they work in the difficult areas of the economy so they have money in the bank from the checks they got and Unemployment Insurance and i think they will go through that so we will see that the later economy has a harder time sustaining the growth that we have seen. That is the risk. Mr. Secretary, if we and the senate with our colleagues in the house coulde agree to do cone thing to improve our economic situation, what would you recommend we do . I would allow us to spend 130 billion sitting in the pp ppp, money appropriated by congress and allow us to send a second checks to those businesses hardest hit and Small Businesses. That would be your number one priority . That would be. Okay. About to run out of time so i was slightly change the subject. Mr. Secretary you are part of the president S Working Group on china markets. I appreciate your good work on that. Two of my democratic friends in the house have told me Speaker Pelosi has decided not to moven any senate china bill sponsored or cosponsored by a broken. How do we s address that quick. I am not aware of that. Will be happy to work with you. Could you bring that up with the speaker . I would be happy to. Thank you gentlemen for your good work you want to associate myself with my colleagues remarks actually to complement you. You had to do it with happy thoughts and spit and duct tape but you have build this thing together. Thank you. Gentlemen thank you for being here as well and for your responsivenessco always. We so appreciate that. Let me talk about something i have talked to both of you over the phone and in person the hardhit tourism and Hospitality Industry in april most 8 million jobs were lost. You both know that workers in the leisure Hospitality Industry have a peek unemployment of 52 percent the economy has cratered as tourism and. To and the Unemployment Rate is more than 13 percent and 300,000 people continue to claim Unemployment Insurance and in a recent survey from the American Hotel lodging Association Nearly three quarters of hotels will have to lay off employees if they do not receive additional government funding in las sector itsno down nearly 25 percent the most among all sectors. I know you appreciate how hard the industry has been hit you talk about their needs to be reliefitional targeted can you identify what that looks like specifically for this industry . That ppe is the most effective way to get targeted relief to those jobs you are referring to. Again we would provide a revenue declined test to make sure it allocates the businesses that really need it. But i just heard senator even is a ppe is not working in his state and is not working in nevada because w clearly too many are suffering around the Hospitality Industry so what do we need to do to target . My concern is a comment we made earlier that some sort of relief is better than nothing. Im not about picking winners and losers but i think that comment is unfortunately i dont know how you can identify an individual or business to get relief when some dont or identify that maybe the Airline Industry needsanan relief that were not given direct payment to those who are unemployed and how we dont still target funding for state and local government how we still dont target what is necessary right now around the Healthcare Industry because we atall know that is the cause of the economic woes right now we should still funding that everything that ive seen forward in this buildout find any of those. Do we need a comprehensive package . Isnt that what we need here to stimulate our economy is a comprehensive package so nobody is left behind . I want to clear up by my some relief is better than none implying we should have a compromise with bipartisan support because right now with no legislation that is a good also i would say the ppp has helped those industries an enormous amount they just run out of money and they need a second check. I disagree with you. I think we still have to target money to Small Businesses. Weabsolutely agree. That is part of the concern that by the conversation i am hearing we are looking at only lifting up some within the communities and not everyone. So my question is dont we need comprehensiveni relief . I do think so it wasnt a question of some versus non but a question of right now we are stuck because the democrats have a commitment if its not less than two. 2 billion theyre not willing to sit down and talk. Listen secretary mnuchin i could to be with you the American Public doesnt care but they want relief you can talk democrats or republicans and we can also talk about the fact the republicans instead of negotiating in the senate they put together a skinny package thrown on theca floor without going to committee ora negotiation and Mitch Mcconnells own words 20 have theres own members dont want to do anything but too many people across this country are suffering in righteb now we need to come together to do a comprehensive package you have done a book for you did a four times before we just need the commitment that you are still there. Yes you have my commitment im available anytime and i will reiterate this committee has been very effective of you and other p members on a bipartisan basis to sit down i am available anytime. Thank you secretary mnuchin your commitment to put together the package we need that is unmistakable your commitment is solid and i appreciate your restatement to sit down and try to work this out s senator mc sally. Thank you mr. Chair its good to see you secretary and chairman thank you for your wor work. We Work Together on additional relief five voted yes on a few weeks ago and for a review including 257,000,000,002nd round of ppe targeted for the smaller mom and pop shops and hardest hit businesses like many in arizona they are grateful for the first round but some are struggling trying to stay afloat and this would have been a lifeline. Also common sense Liability Protection to protect our firm an epidemic of trial lawyers and that extra 50 per week of unemployment for those who are unable toes work as we move the economy forward as we champion for child care providers to be open and stay open and its important for working moms for kids to have childcare so they can safely return to work also to extend the deadline for september 30, 2021 for the appropriated money for local governments under the Coronavirus Relief fund that we can communities andrn the tribes its great to see that. 31billion vaccine the strategic stockpile going out to farmers and ranchers and growers and then to get student safely to Higher Education into the Postal Service i know im hearing for businesses they are doing everything they can in a targeted relief package people are tired of hearing the blame game to get immediate relief out g the door with a 257 billion can we see the economy and those still have theg 257 billion is out the doorll right now helping across the country . I dont know the exact number it is an awful lot. It is. Arizona alone over 86000 Small Businesses took advantage of ppe and the second round would be impractical. If you can share your views on economic recovery and how important that would be luscious to vote on that and for the things we can agree upon. So can you share your view on the importance of getting this out the door . I said earlier the single most impactful area and again i emphasize it doesnt even require additional funds to be created. We can have the 130 billion there and allocate the money on the fed facility so that would not cost an extra penny. Exactly. Chairman powell anything you could add like what you voted on a few weeks ago . Not much. I would agree this is something to help the economy. A follow up on extending the deadline. Is not additional money but fund and thelief resources to state and local governments we could be included in the legislation. So in the military it is use it or lose it me heard from tribes that have a plan to invest in but if you are talking about Infrastructure Projects that would be impractical to address those underline on underlining one underlying challenges. Is just the extension. Can you share your views . I strongly support that as well. And not have it bm and of course im out of time but i did like to do what youve seen in the implementation of the policy and what actions they are taking to ensure individuals and businesses are aware there are options between ppp and the programs to help give some relief here. Thank you, senator. Thank you, mr. Chairman. Appreciate this opportunity. Thank you to both of the witnesses. I listened to the view about what was voted on a couple of weeks ago. Unfortunately time doesnt permit me to go through all of the inadequacies. The fact of the matter isu that bill was less than half of what was being floated out there in august. I would like to associate myself with. My hometown suffered. They had to file bankruptcy. Just this last friday 150 Library Employees had to be furloughed. I would like to submit a chart and i would ask unanimous consent that be submitted for the record. The Alabama League of municipalities says theres a lot that we can do. I think senator menendez covered that appropriately. Secretary, let me ask you about the stimulus checks because while i also hear about ppe and Small Businesses under 150,000 of that havent got their money from the cares package the gao report that was released shows nearly 9 million americans, 150,000 of those in alabama but till havent received their 1,200 stimulus check. These areat folks that dont mae enough or file taxes. I understand there was a letter that was going out in september about urging people to do that but im afraid a lot of people are not going to make. Can yo you committed to commit e deadline for a month or so media until december in order to get these f folks rather than waitig on some kind of tax credit that may or may not even work for them . If we have the ability to do that. That would be great. I think you do have that ability but if you could get back with our office i would appreciate it and i would agree about your responsiveness to. I think about how folks recognize the stock market isnt always the best indicator of where the economy is going. Its been like one of my favorite roller coasters down in georgia. Its up from its down, it depends on how they are looking at it at the end of the day. Not that its a. Bad one but during the pandemic, many hardworking americans lost their child care with daycare is closing and elderly relatives worried about exposure. Without the flexibility of working from home than we ha tho cut back onrl their hours and se cant work at all which means smaller paychecks or low paychecks. The households are headed by a single march. Of those without it it into the stimulus check or the ability if they havent got one already did it. How are a they going to put food on the table, howard is going to pay for the necessities . So my simple question is what impact will consumers with less discretionary spending, what impact will that have on the economy Going Forward . The burden of h the pandemic have fallen hard. If people start to run through what resources they have, they are at risk of losing their homes or having to move out of the place they are renting and they are not necessarily good for controlling the spread of the virus. In addition they will cut back oftheir spending and i would pot to the care act that did good putting and keeping spending in one piece and Going Forward. Thank you. Appreciate you both being here. Thank you. Senator smith. Thank you mr. Chair and Ranking Member and i also want to thank the secretary for being here. Id like to start with you. I sit in the seats that was once held by a champion for full employment and in fact his name is on h the bill that set up the dualal mandate for the stable prices and that you are charged with implementing. You noted several times, and i appreciate your comments aboutu how it hasnt been the great equalizer and its affecting people in lowwage jobs and women of color and black and Brown Indigenous people, so my question is as you think about your mandate and the decisions around Monetary Policy, could you talk a little bit about how you see the impact of the Monetary Policy on supporting households of color. The no research has shown they tend to recover the lost wages more slowly for example. Ust knowing how you think about this and you might want to make up more into ththat more into tu go forward. Of ththe single best thing te can do is support a strong labor market. If we saw it in the last few years they began to go more and more to the minorities and women its a state of affairs we would like to get back to. I would add it took us eight years to get from theha financil crisis to that labor market. So i think there are other tools that can help in the meantime. It isnt a good strategy to be waiting for unemployment to get hello again although that will ultimately. So that is the main thing that we can do and they also have tools where wewe supervise banks to make sure there isnt discrimination and the different demographic groups and not just the headline number. With the low Interest Rate and how the communities of color do. What is the relationshiphi like and mcuchin that supports lower unemployment. It also supports higher inflation as the economy moves closer and closer to full employment and capacity. You will see inflation rise little bit. So it is a virtue that over time helps everybody. If you are relying on interest on your bank account it doesnt help you fair bit over the medium and long term, it supports job growth and Economic Growth generally. Thank j you. I appreciate that and i hope that you will continue to look at how to keep workers at the forefront as you think about the Monetary Policy so thank you. And i wanted to followu follown something i wrote to youou about recently and received information back from you last night. This has to do with how the Treasury Department is working to get impact statements or payments. Folks in minnesota and all over the country are living in shelters and encampments and cars. There is a large tend encampments a few blocks from where we are in minneapolis and those folks are not getting their Economic Impact payments. So could you justd tell me you said in a letter that i received last night you had special tools that you were working on and of course what are we doing especially as the deadline is approaching in just a few weeks . As i mentioned we will go back and explore that and see what they can do. What we need to help the homeless and i think the best way to do that is to work with Community Organizations locally can help them and facilitate for us to be able to do this. Do you have any information about folks experiencing homelessness how theyve been able to get their check and what results you are getting . On that specific issue i will followup with your staff and try to get you some statistics. That would be helpful because getting cold in minnesota i dont know what is going to happen to the folks that are dont haveliterally a safe place to call home right now. Thank you. And i believe we havee senator sinema by telephone on monday. Thank you, chairman crapo into the witnesses for being here today. A significant part of the games appear to be government jobs specifically arizona teachers returning to school. Private sector job growth is slow due to the coronavirus and business operations, Consumer Spending and public health. One of the issues according to the census bureaus households surveyed over 300,000 hits to their july rent payment, two thirds of the households or families with children. This experimental survey was last taken when arizona was still providing a 600 additional dollars per week of Unemployment Insurance and now that that enhanced payment is no longer available, its certain the situation has gotten worse. A reminder arizonas Unemployment Insurance tops out at 240 per week, the Second Lowest rate in the nation. Thatoalition projects 770,000 in arizona will be at risk of eviction this year. So, secretary mcuchin and chairman powell, thank you for being here. Have you personally experienced eviction or foreclosure . I have o not said what we say edwe do support rental assistan. Ive spoken with chairman crapo and others and as a part of the potential legislation we look forward to working with you. For me, no i havent. As you may know for years i was homeless as a child and i wouldnt wish it on anyone. I know the challenges the families are facing right now and its important for people in washington to understand. When i was in elementary school, my dad lost his job and my parents got divorced. We lost our car and ou in our hd we were homeless for almost three years. They lived in an abandoned gas station without Running Water or electricity. This might sound like an extraordinary story but its more common than youit would think. Something millions of americans could hasten the comin face in. Receiving a notice of eviction on for closure and having your home taken from you, being forced to hand over your family possessions, not knowing where you will h go next counties are incredibly difficult and painful experiences and hardll to explan or understand unless youve been through them yourself. Too often politicians in washington understand evictions and for closures and strictly economic event in arizona, we know that losing your home does more than hurt your credit. It is more than jeopardize your financial standing. It takes away your dignity. Its personal coming in at times it can seem that its impossible to getdi back on your feet. We have an interest in minimizing evictions whenever possible but especially in a pandemic. The cdc acted to hold until the end of the year. This decision simply prolongs the inevitable without some sort of rental system for families. It shifts the burden but provides no means of paying for it and unfortunately, arizonas rental assistance which was riddled for months with the bureaucracy is now completely out of money. Arizonas situation will go from bad to worse if we cede evictions and record homelessness dependd publichealth crisis. This housing crisis could also destabilize the Real Estate Market. For the businesses by further increasing Consumer Spending and tightening access to credit. So, chair and come if Congress Fails to pass rental assistance and hundreds of thousands b or evicted do you anticipate those with positive or negative impact on the economy . A negative impact. I agree. Which is why im working with senators to provide targeted rent, mortgage and utility assistance to keep Arizona House during these challenging times. Also working with Industry Partners and Housing Affordability advocates to build a broad bipartisan support for these proposals can be included in the next relief package. As we work to get the businesses back on their feet im pleased to have worked with a number of colleagues. We cannot forget that families are struggling. We should have taken action months ago and nowa the need is more urgent than ever. Arizona families face tough choices right now and its Time Congress recognize these challenges and took action. Thank you Esther Tremaine and Ranking Member brown. I call on us to find solutions for families struggling across the country. I yield back. Thank you, senator sinema. That concludes the question for today. Senator brown asked for a minute or two to make an additional statement and then we will wrap up the hearing. Senator brown. Thank you mr. Chairman for giving me an opportunity atnt te end to ask one more question and make a statement. I personally want to thank senator sinema for bringing up the importance of rental assistance in this you know weve asked for 100 billion as the pandemic goes on and barely covers the assistance we need. I mentioned briefly an article about how Small Businesses it wasnt enough and how in cleveland they are suffering like a big corporations benefit from access to cheap loans. Did you read the article that we sent you . I did. I looked at it very quickly on the way up. Have a chance to read the whole thing that i saw it briefly. I hope that you will pay some attentionar to how Overleveraged Companies can benefit from the backstop where they lay off workers to keep the prices up and bolster their stock prices. Weve got to really take it to heart. Thank you and i agree both of you are always responsive to the senate and members of the staf. We need a large and impressive bill to keep the economy working. We cant do it piecemeal. You know how this works by now it takes months to get it done. Families dont have that kind of time and as we know you and the president need to bring republican senators to the table supporting your ideas and our ideas of a bigger package committed the act together, tell mitch mcconnellb he needs to pu, even if he has 20 people in the caucus that dont want to do anything, they need to put a serious bill forward. We will get all the democrats to work with half or so of the republican congress. If we dont get direct funding as a witness said last week with others, with republican witnessn witnesses chiming in, we could have another Great Depression on the horizon. The stock market does, find that mainstream businesses are shutting down. Walk into town businesses and communities are taking a hit for the second time this decade. Airlines are doing well, Airline Workers are facing job cuts. We can do better. It comes down to whose side are you on. As you know, mr. Secretary and mr. Chairman, many of my colleagues havent seen the country through the eyes of the workers, which is so important. And they havent really tried to pass the heroes act in may or june, july, august, september. They should urge the Senate Republicans to take it up or come up with their own package. Thanks to the two of you for testifying. Ive been notified one of our senators may be joining us remotely and we would like to havese an opportunity to ask questions. If you are with us, senator cramer, let us know and you may ask your questions at this point. It sounds like he has not been able to make that connection so we will conclude the hearing. I would like to say in response to senator brown and some of the other comments that have been made, there is a commitment on the part of the president , on the part of many of us in congressss to put a strong and fully effective relief package together. At this point, i personally believe they havent had the willingness from the other side to engage in a reasonable package and the demands continue to be our way or the highway. Frankly, i believe that there are many items we have already reached agreement on which we could Reach Agreement on very rapidly if we would take them up and iout and if we had the willingness to do them individually. So, i hope as we continue to work on this competence of package that we also recognize we need to act and act now and there isis a good amount of relf we can put forth rapidly if we can just get the agreement to move forward and continue working on putting the rest of the package together. I think those electronic sounds being senator cramer has been able to join us. But that, that concludes todays hearing. For senators that pushed his questions for the record, they are due to the committee by thursday october 1. Each of the witnesses we ask that you respond to the questions as promptly asmm you can, and again thank you for taking your time and for all of the effort youve put forth in response to thiss coronavirus crisis. The hearing is adjourned. Thank you, mr. Chairman. [inaudible conversations] Republican National Committee Headquarters as the chair of the rnc i want to begin with the issue that is a key part of your job to make sure voters get to the polls either in early voting or on election day. This coronaviruday. This coronavirus in key states of michigan where you are from, how are you dealing with that . Guest we were virtual and state are shutting down i down e coming oand wewere coming up ofo make sure they both available and now weve switched back to a fully enforced ground ge