Present your oral testimony. Secretary mnuchin thank you very much. Mr. Barr. Let me express my condolences for your loss. Of the committee, i am pleased to join you today to discuss how the Treasury Department and the Federal Reserve are working together to provide liquidity to the credit households,iness, as well as state and municipal governments. We remain committed to making sure every american gets back to possible. Ickly as americas economy continues to recover from the challenges posed by the covid19 pandemic. The jobs report for the month of may best we exceeded expectations with a record gain of 2. 5 million jobs after experts had predicted nearly 8 million lost. Ae Unemployment Rate is still high but we are seeing additional signs the conditions will improve significantly in the third and fourth quarters of this year. Is bluechip report forecasting our gdp will grow by 17 annualized in the Third Quarter and by 9 in the fourth quarter. The u. S. Chamber of commerce reported this month 79 of Small Businesses are at least partially open, and half of the remaining businesses are opening soon. By 18 ,ales rose in may more than double the expectation. Investors in business have historically high cash positions, the highest since 1992, indicating private capital is ready to return as communities reopened. We are in a strong position to recover because the administration, working with congress on a bipartisan basis to pass legislation and provide liquidity to markets in record time. In particular, the ppp is keeping tens of millions of employees connect to their jobs. Areomic impact payments also helping millions of families and workers through these challenging months. We are monitoring Economic Conditions closely. Certain industries such as construction are recovering quickly while others such as retail and travel are facing longer impacts and may require additional relief. We look forward to continued conversations with you to address these critical economic issues. Treasury has been hard at work implementing cares act programs. Ppp we have approved over 4. 8 million Small Business loans for 519 billion. Economic impact payments, we distributed nearly 169 million payments in record time. Programs to support aviation and other eligible business we have approved and dispersed over 27 billion dollars to over 500 airlines and other aviation business, preserving hundreds of thousands of jobs. Process ofhe documenting loans to business and Critical National security for approximately 25 billion. The Coronavirus Relief fund, we have distributed 150 billion across states and local governments, nearly half of all in additional money to tribal governments. The cares act also granted treasury the authority to provide 454 billion to support Federal Reserve lending facilities under section 13. 3. Since march 17 using funds available, i have approved a number of Federal Reserve programs. The commercial paper program, primary dealer program, the talf, the secondary facility, main street facility, municipal facility, and the ppp lending facility. We have committed approximately 200 billion to support these. This has promoted muchneeded access to liquidity. Billionover 250 remaining to create or expand programs as needed. While we are beginning to have conversations about supplemental relief legislation, we look forward to working with congress on a bipartisan basis in july on any other further legislation that will be necessary. Treasury has only been entrusted with a tremendous amount of funding to inject into the economy. We are closely monitoring these results and seeing if conditions improve. We would anticipate any additional relief would be targeted to Certain Industries that have been especially hardhit by the pandemic with a focus on jobs and putting americans back to work or have lost their jobs through no fault of their own. The Treasury Department is implementing the cares act with transparency and accountability. We are providing information to the government wide reporting on usa spending and updates to congress. We are also cooperating with the congressional Oversight Committee, gao, and others. Pleased the Federal Reserve has announced plans to boost loan information on its website regarding its facilities. Chair powell and i have had very productive initial meetings with members of the Oversight Committee, and we look forward to continuing to work with them. Thank you very much. Chairwoman waters thank you. Chair powell, you are now recognized for five minutes to present your oral testimony. Chairwoman waters, Ranking Member mchenry, thank you for the opportunity to specify today to discuss the extraordinary challenges our nation is facing and the steps we are taking to address them. We meet as the pandemic continues to cause tremendous hardship, taking lives and livelihood, both at home and around the world. This is a Global OutlookHealth Crisis and we remain grateful to our Healthcare Professionals for providing the most important response, to the essential workers who meet our daily needs. These people put themselves at risk day after day in service to the country. The virusin march, and a forceful measures taken control into stacia decline in Economic Activity and a surge in job losses. As the economy reopened, incoming data is beginning to reflect the resumption of Economic Activity. Many businesses are opening doors, hiring is picking up, and spending is increasing. The economy has entered an important new phase and has done so sooner than expected. While this bounceback is welcome, it also presents new challenges, notably the need to keep the virus in check. While recent data offers positive signs, we are keeping in mind more than 20 million americans have lost their jobs and the pain has not been evenly spread. Beenising joblessness has especially severe for lowwage workers, women, africanamericans, and hispanics. This reversal of economic fortune has caused a level of pain that is hard to capture in words. Forward for the economy remains extraordinarily uncertain and will remain in large part on our success in containing the virus. A full recovery is unlikely to occur until people are confident it is safe to engage in a broad range of activities. The path forward will also the pen on policy action to support the recovery for as long as needed. The Federal Reserve is strongly committed to using our tools to do whatever we can for as long as it takes to provide some relief and stability to ensure the recovery will be as strong as possible and to limit lasting damage to the economy. And for lowering the federal funds rate to essentially zero, our action soap all fall into four categories. Stabilizing markets, money market and liquidity funding measures, direct efforts to support the flow of credit in the economy, and targeted regulatory measures to support those efforts. Facilitiescreated 11 to support liquidity, funding, and the flow of credit to households and businesses and state and local governments pay without access to credit, families could be forced to cut back on the subsidies or lose their homes. Businesses could be forced to downsize or foreclose, further worsening the downturn. Lending facilities have all been undertaken with the approval of the treasury secretary and many are supported with the cares act. Their status and ethics are discussed in my rinse statement. To use will continue these powers forcefully, proactively, and aggressively until we are confident the nation is on the road to recovery. When the time comes come after the crisis has passed, we will put these emergency tools back in the toolbox. I would stress these are lending powers, not spending powers. We design ourte facilities to work for broad ranges of businesses and municipalities. We do not target firms or industries. Elected officials have the power to tax and spend and make decisions on where to direct such targeted relief. The cares act and other legislation provides direct help to people and businesses and communities. This support is making a critical difference in the just helping families and businesses in a critical need but also limiting the longlasting damage to our economy. Public faith in our operations depends on transparency. Committed to that transparency, particularly in supplying our emergency powers. I look forward to questions. Chairwoman waters thank you. I now recognize myself for five minutes for questions. As i mentioned in my opening, the pandemic is threatening, and so, too, must our response. Two weeks ago, chair powell, when i asked about the need for more congressional action to protect our communities, you said, there are Something Like 25 Million People who are still dislodged from their job in full or in part due to the pandemic. I would think it would be a concern if congress were to pull back from the support that is providing to quickly. Unfortunately, tomorrow, this is exactly what will happen if the senate does not pass the heroes act. Program stopsppp taking new applications. Ppp should be extended immediately so that the billion dollars in funding can support Small Businesses. Also happening tomorrow, millions of families will be unable to pay their rent and mortgages. In june, one third of renters cannot pay their rent. Four point 2 million homeowners are currently in for very they cannot pay their mortgages, and evictions have already started in many states where moratoriums have expired. While the moratorium should be extended, it is not conscious about to simply delay and affection and foreclosure crisis. Congress and the Administration Must provide support to struggling low income families to cover their rent and utility payments. Powell, millions of families are at risk of being stripped of their home. Do you think congress should provide Financial Assistance to ensure people stay in their homes . Chair powell thank you, madam chairwoman. I try to keep my fiscal comments at a very high level. That comment that you referred to was referring to the Unemployment Insurance that expires at the end of july. For the specifics of what you need to be doing, i think we have a treasury secretary here. The treasury to secretary on fiscal matters here. Chairwoman waters ok, so you put it up on mr. Mnuchin. [laughter] while you have made changes to broaden the liquidity facility, many jurisdictions like the territories are still locked out. When we last spoke, you mention it was difficult not perhaps there would be a way that guam would be eligible. Did you find a way to look at that and determine if something could happen . Secretary mnuchin we are taking a serious look at that. The territories themselves are not investment rated, were not before the pandemic set in. That is the men on standard for access to the musical facility. Businesses in the territory would be eligible for the main street. Some of the facilities that guam has our Investment Grade rating but below the minimum. We are actually renewing our credit standards in the municipal Credit Facility at the moment to determine if there is a way to adjust the facility in a way that would make eligible some credit issuers without violating the letter of section 13. 3. Secretary waters mnuchin, with critical unemployment support expiring next month and today marking the last day that treasury and sba claims that new ppp loans can be approved, does the Administration Support extending these programs, as proposed in the heroes act . We do supporthin additional legislation and look forward to the house and the senate on that. I have already had conversations with the sba committee in the senate about repurposing that 135 billion. I think that should be done. Looking forward to working with the house and senate so that we can pass legislation by the end of july. Chairwoman waters thank you very much. Maybe not. From northan carolina, mr. Mchenry, is recognized for five minutes. Thank you for your testimony. Secretary mnuchin, i think there is wide agreement that your engagement in the ppp program made things largely better, right . The treasury expertise, making thissba could deliver in seminal program of the cares act. It has proven out because you have 4. 5 million Small Businesses that have benefited from it. The average loan size is quite modest, but the effect is pretty wide scale. What would you say regarding the additional funds that are ppp . Sed for what should our focus be as policymakers of repurposing that 134 billion . How can we best do that . Programs . Loan how do you see the spitting into the actions of main street and the other facilities that you have set up . Secretary mnuchin i appreciate your comments. At the time that we passed the last cares act, the economy was in very different shape, and we needed to get money into the economy quickly. Programs that took three months were not the focus. I think there appears to be bipartisan support in the senate to repurpose the 130 billion for ppp, extending it to businesses that are most hardhit, that have a requirement that their revenues have dropped significantly, things like restaurants, hotels, and others, where it is critical to get back to work. That seems like a reasonable step in the right direction. Powell, the reputation you have garnered this year in particular is that your actions have been predictable, in that you signal what you are going to do and follow through on it. Transparent, in that you lay out the metrics for action, and there or follow the metrics. Incredible. , at announcement, you said you would support corporate bonds, and by saying that you would support corporate bonds, the market acted as if the fed already have the program up and running. Once you were up and running, people asked why you follow through on that program. I think that is important to that transparency, that guidance, communication has been effective in this opening stage in setting up these responses. So along those lines, the fed took what i would call strong medicine in terms of action on the stress test, to restrict buybacks, restraints on these large Financial Institutions i would call that quite strong medicine. What we want to understand are the metrics that the fed is going to use in order to make these judgments and assessments in this next phase, over the next couple of months for these large financials. Chair powell i think you have to start with the two major affects here. What is that the Banking System has been strong, a source of strength. The banks have been taking on a wave of deposits, engaging in forbearance, making loans. There is a source of strength in this situation, unlike the last crisis when they were a weakness. It is also a fact that it is highly uncertain. To preserve that strength, we have stopped all shery purposes, stopped increases in dividends, so we are preserving the level of capital in the system. To address the uncertainty, looking forward, we did run these three sensitivity analyses. To assessreally good the overall strength of the system, in the space of these downside cases. We found the majority of firms were still adequately capitalized in all of those scenarios. Notwithstanding that, we said for the first time in the history of these tests, then we were going to ask the banks to resubmit their capital plans, distribute scenarios, and look at the results again as we learn more about the path of the crisis. In terms of the precise metrics we will be looking at that, we will provide more clarity going forward. Based on that uncertainty, you are asserting as a regulator , that you will actively review this to ensure we dont have a financial crisis as a result of this Health Crisis . Chair powell we are learning so much every quarter. The path of the economy is highly uncertain. In our system, dividends are declared every quarter. We have stopped already the overwhelming distribution of that. We think that is the right place to be. Thank you for your leadership and effectiveness. Thank you as well, secretary mnuchin, for your leadership and effectiveness. I yield back. Chairwoman waters thank you. I recognized the gentleman from new york, ms. Maloney. Thank you and welcome. Secretary mnuchin, i would like to ask you about a very tumbling troubling oversight issue. I am the chair of the Oversight Committee and i take these matters seriously, and i hope that you do, too. In the cares act, we created the Pandemic Response accountability committee, independent inspectors generals charged with overseeing all of the money , and in the cares act identify waste, fraud, and abuse. Last month, the general counsels office in treasury issued a legal opinion that questions pracs authority to oversee trillions of dollars of cares act spending. This legalluntly, analysis is so bad that it borders on bad faith. The opinion claims that no evidence that congress did not to haveor the prac oversight, authority over anything in the first half of the cares act, including the ppp program, and any of the feds lending facilities or the 150 billion in funding for states and local governments. So i would say, secretary mnuchin, that this interpretation is wrong, that it is just plain wrong. Senator gary peters and i proposed an author this section of the law, and i was heavily involved in negotiating those provisions in the cares act. I am telling you that congress toent was for the prac oversee all of the spending in the cares act, not just have, but all of it. That was our intent, that is what the bill said explicitly. The interpretation from your general counsels office is already causing problems because it is hindering the prac s ability to monitor how states are