Transcripts For CSPAN Fed Reserve Chair Powell Treasury Secretary Mnuchin Testify On CARES Act... 20240713

Massive local tax increases. Anyone of those alone threatens to make this economic crisis even worse and the combination of all three is almost unthinkable. The bureau of labor statistics just reported that state and local governments laid off nearly one million workers in april. That is almost one million firefighters, police officers, teachers, Emergency Personnel that should be on the front lines of the Public Health crisis but are sidelined instead. Chairman powell, let me start by asking, do you agree that our economy will get worse if state and local governments are forced to lay off even more firefighters, teachers, any and Emergency Personnel . Let me say what we are doing. We have a liquidity facility that is there to address the shortterm liquidity needs that these entities have because of their loss of revenue due to the effects of the pandemic. That is really the tool that we have. I appreciate that. That is not my question. States,ion is if counties, and municipalities continue on the path to layoff, we have one million laid off even more, just from an Economic Situation, doesnt that make the economic recovery even worse . Essentially, yes. We have the evidence of the Global Financial crisis in the years afterward where state and local government layoffs and lack of hiring did not weigh on economic growth. One of the tools we have to alleviate the problem is by using the money that was provided in the cares act to bring down borrowing cost for state and local governments so they can set the stage for strong recovery. I would want to see the Federal Reserve support local governments through the lending facility, but i dont think it is enough. And others that i sent to you and secretary mnuchin last week, we called on the fed to another facility to purchase medium and longterm Municipal Bonds both directly from issuers as well as on the secondary market and ensuring state and local governments can continue to finance Key Public Services and invest in infrastructure and other areas to jumpstart our economy and get americans back to work. Will you commit to work on that proposal . Yes, we will look at that, senator. I will say that what we are trying to do is address liquidity. Notwithstanding that, we are taking a look. I appreciate that. In a speech last week, you said additional fiscal support could be costly, worth it if it helps avoid longterm economic damage and leaves us with a stronger recovery. The tradeoff is elected representatives. And i agree. He hit to our states and counties is tremendous and not just in my state of new jersey. Projections released reveal that every state in the nation is already or will soon face historic budget shortfalls. A few examples, they found that ohio and arizona are each facing a fiscal shock totaling 20 of their entire state budget. For some states, the numbers are worse like West Virginia which is facing a 40 fiscal shock. The fed cannot be expected to solve all of our problems. Yesterday i introduced smart act, a bipartisan, three republicans and three democrats who provide money in direct support to state and local governments. It is the first bipartisan bill of its kind. I think when we have colleagues from mississippi, louisiana, and maine on the republican side, it is not a partisan issue. Would that be the type of solution that can get us back in terms of the states until fiscal covering . Recovery . Senator, we have done what we can with the Municipal Liquidity facility. This, a lotose on of the businesses are not getting access to the Paycheck Protection Program as we intended. I know the secretary has been receptive. I hope you will be as well for allowing Community Development institutions and minority Development Institutions get greater access to these programs and to the lending facilities set up in the cares act so these funds can reach businesses in low income areas of the country. It is still not happening and i urge, the secretary has been rather receptive, i urge you, mr. Chairman, to be receptive as well. Thank you. We will move to senator sasse will be with us by telephone. You have 30 seconds left of your 5 minutes. You can proceed. Thank you, chairman. And gentlemen, thank you for being here. I am in the hallway of a judiciary committee. Thankful for for your time and responsiveness. I wanted to start by asking about the act. We have seen an increase in themes directed at Financial Institutions that have been active with the corona response and i am curious if you have any updates for us on the cybersecurity attacks we have seen in this space. Comment on that we have a department within treasury that is actively working on all of these issues and coordinates to make sure the infrastructure. I will give a pitch toward the secret service bill of moving period, back during the i think they can help on the cyber related issues. I can assure you, we have all of the resources working on this and take it very seriously. Institutions that do not have the scale to have huge cyber defenses on their own. That obviously critical we view this as a whole society problem. Thank you for your pledge to keep looking at that. Chairman powell, the fed has done a series of announcements over the last two months about 133 lending facilities. Of peoplecements rights, the fed announced that it would be expanded to include commercial Mortgage Backed securities as well as loans. The wall street journal described that expansion as the fed will be buying the worst shopping malls and some of the worst and dead companies. Can you give your perspective on the wall street journals characterization of this expansion and the risk levels for some of the commercial properties as america goes through this experience of corona time, lots of people are not just doing telecommu ting. Lots of companies are planning to migrate as a longterm strategy and i am sure that is what we will see for commercial property across america. The taxpayers should not be on the hook for flooding into that space. Wouldu explain how you respond to the wall street journal . In supporting Asset Backed Securities broadly, that is consumers, car loans, credit card loans and things like that. We are only buying the aaa rated piece and we are only buying it with a goodsized haircut so the credit risk is actually very low on this. That is helpful. Thank you, chairman. Secretary mnuchin, i want to go back to some china ip issues we discussed before. The Chinese Government has been stealing American Intellectual property for decades to fuel its economic rise. Ignited companies for espionage for theft of property, we have really seen any sanctions for these crimes. For instance, they built the business side of the organization by stealing ip. This is hooked into military intelligence. Why do we treat them as if they are really private Sector Companies. Its a matter of policy. I dont comment on future sanctions or do i comment on specific sanctions on specific happenings. Huawei, werelated to do coordinate. Ive worked very closely with the ambassador on the china agreements. Major a issue were going to combat. Officials of both administrations for two decades talk about agreements that are going to have teeth. They almost never do. That has been a bit of a pit bull on this. Same ast really the pushing to help huawei and their statebased actors understand this has real consequences. Im glad its a top discussion. I know i met time. The Intelligence Community in theht committee anislature, this is increasingly bipartisan issue that republicans and democrats believe is important to hold them to these private Sector Companies to more account and not just say eventually we will, the stairs. Worth, the article one perspective is serious. Thank you. I want to thank both secretary mnuchin and chairman powell for being on the call. We see was transferred over the last couple of months. My question is quite simple. Can i get both of your that you would provide any information to them . Good. How from youre perspective how active is the Oversight Commission . Ive seen thehin recent report. I cant comment on what theyve done on that. Assume. Ld secretary mnuchin i see no reason why we wouldnt. I value that and i appreciate it. The president has a different opinion. Said aboutby what he the values of the inspector general. You think is right to remove Public Servants at their job as independents holding the government accountable . Secretary mnuchin if you are referring to the removal of the know that ive heard the president say. Even if they are doing their job . Secretary mnuchin again, thats an appointed position. He has the right to withdraw. I have a different perspective on that. He could remove yourself. If you are doing your job in clearase, i think its a misunderstanding of the three branches of government. I talked to you about reporting to the igs. Half of the dollars and allocated have either been spent. , we need more transparency in these programs. I think you would agree with that. More information about who is getting the dollars . 5 we negotiated this deal. Secretary mnuchin we have an transfer precedented unprecedented transparency. I dont do why you have seen that. Everything is posted on our website. We take great pride in the transparency at that weve agreed to. Youre saying the information about who is getting the dollars and who is getting the money is already posted on your website . Ivetary mnuchin what said is every said goal commitment weve made is listed on the website. Every dollar that is gone it has been posted on the website . Secretary mnuchin within the cares act with the fed, we review individual transactions through them. They are listed. I look forward to seeing that list. I am going to search it. See as youbear and said is with this program, as a member of the banking committee, im not seeing any of it. I see general numbers. We will deal with that the later date. 3 trillion has been put out. Can you give me an idea how many dollars with the levering the fed does has been used . Senator, thell big facilities to which the equity has been committed are really just coming online. Its all out of this. We will be taking some time to set these facilities up so the amount that has gone out so far is in the context of the economy. We have made commitments to disclose all the borrowers and the amounts. Appreciate that. There is 200 billion that would be leveraged to 2. 3 trillion. Chairman powell potentially. We leverage their equity at that. Thank you very much. The look forward to find information online. Take care. Thank you, mr. Chairman. Thank you both for being here. I want to speak about the primary and secondary facilities. Those facilities are available to companies that have public ratings. Expensivee an process. Some people dont want to go through the rigmarole of getting those ratings. Privately owned, sometimes family owned. Arkansas thatn are employing thousands of workers. Maybe all 50 states have companies that are in this category. Oftentimes they sell loans directly to the Insurance Companies like life insurers that are rated by the National Association of insurance commissioners. Those ratings are highquality. What is the possibility of opening up those facilities to companies that are selling these kinds of loans with those Credit Ratings from the naic . Secretary mnuchin i appreciate the opportunity that you brought this to our attention. Suggested, im working with the fed closely to see if we can accommodate using those ratings. Need, there is some private rating that can be done on a level that is not to the companies. We are committed to make sure they can use these facilities as well. Can i get your perspective . Chairman powell if i understood your description of the company, it sounds more like main street companies than primary or secondary credit markets. If i misunderstood, im sorry. Limitation is the employee cap. It would be similar. I would echoll what secondary secretary mnuchin said. Any thoughts on when that decision might be made . There might be a brandnew facility . Secretary mnuchin i will commit to try to get back to you within the next week. That theremake sure are companies that slipped through these two facilities, we will Work Together to make sure we deal with those issues. Thank you both for that. Thank you for your work. Especially the last couple weeks. ,he Paycheck Protection Program its a very specific question. I suspect many have the same question. The note we received said we are ppp versions of fda forms for the guidance and format of the report. Where reaching a critical point in time. That can be timeconsuming and tedious. We ask for a little more detail. Extract the data points from the software system. This will require programming in inspectired formats to for accuracy. This will take many days to produce. Tuesday, theis is deadline is friday, was a prospect of getting more guidance as soon as possible or push the deadline back . I believemnuchin weve already pushed that date back. I will check on that and confirm that. If there is a specific institution of has a problem, please let me know the name and we will figure out how to accommodate that. We want to get the information. There are small banks that have issues and we are trying to figure how to accommodate them. For youryou again willingness to work with all of us these last two months to iron as thise wrinkles applies to so me different situations. I yield back my time. Thank you. Can you hear me . Great. Thank you. I want to start with chairman powell, some the comments youve made that i want to reinforce. We understand that losing a job at any point in your lifetime is an enormous challenge. Losing it in the midst of a recession or depression could be devastating. A survey the fed put out said americans makeow less than 40,000. They had their jobs disappear between february and march. We know 36 million americans were unemployed. I think the statistics have shown losing your job during a timesion could incur long income losses up to 19 over the coming decade. Minute toou to take a devastation, of would this report disproportionally hitting low income americans, can you speak to us about the result and the longterm scars this presents if we dont take aggressive action . Chairman powell i would be glad to. There is clear evidence that we have a situation where people are unemployed for long periods of time, it can weigh on their careers and their ability to go back to work and way of the economy for years, equally with Small Businesses. That is the jobs machine of our greatest comic. If we allow unavoidable solvencys after a disaster, that will discourage families. It will weigh on the economy. Those are things to keep in mind. This is the biggest response by congress ever. This is the biggest shock. Air,uestion looms in the historically, governments tend to under shoot. We have 36 million americans without work and 40 of people losing their work. One of the reasons i want to turn it to you secretary, we discussed this with a number of colleagues on both sides. We did some aggressive things for people in the airline industry. Market at the main street facility, i have concern that we need to be very aggressive with that. You outlined some of the ideas. Earlier thation you were willing to have some of that money at risk in this facility. Can you speak to that a little if youe, especially build out the baseline of this facility, how much risk and capital did you expect to lose . Can the fed chairman echo if he will look at some of the penalty that are not legislatively mandated. Secretary mnuchin first of all, i want to thank you for the time you spent with us during the legislative process and helping to craft these different pieces and your availability since then. We appreciate your thoughts and we will continue to work with you. Riskinglates to capital, almost by definition anytime the fed thinks its a risk to us, we have different scenarios. Theave continued to adapt program to let more and more companies into it. We refer to it as one program, it has three subprograms. Scenarios where we could lose all of our capital. We are prepared to do that. Make a small amount of money. Secretaryfferent than paulson during the tarp time. Intend toion is we sake some losses on these facilities. That is our best case scenario. You want to discuss the penalty rate . Chairman powell what we are doing with these programs is where making loans where markets are not working. The purpose of central banks. What rate should we charge . We charge the rate that is a little bit higher than the muchl rate, in most cases less than what the market provides. Need credit. E who if markets are functioning well, we dont want to replace them. We want to be a backstop to the markets. These are extraordinary times. I hope you will lean into this as much as possible. Thank you. Thank you, to chairman. I appreciate the work you have as wellmaking this work as it has in a short amount of time. I would ask first of all to our localmnuchin, lenders have a number of questions coming in. Sections two different where we asked these local loans be divvied out and accepted within 10 days of the time of approval. A junes that relate to 30 date of completion . I dont find where there is a date. 0 and date end can you talk a little bit about your options or the flexibility you have with regard to the ppp that so mene 30 date people have concerns about . Secretary mnuchin let me comment. The concern people have is bigger. There is the 10 days to disperse it, we give the bank and other 10 days to set back the documents. Issues notre having necessarily with being able to use it. They dont want more money. They want flexibility that they can use it in longer than eight weeks. We are happy to follow up with your staff to talk about where that fits into the bill. Powell, they recommend Congress Give regulatory discretion described by the plan. That . Share what measures do you think congress and the fed should pursue . Chairman powell i do share that. Unusualily during this time in history, banks have been strong, theyve been making loans. Because of the growth in the they areheet, constrained by some of these regulations. They are taking very low risk assets. We want them to be able to do with they are doing. I do support that. We have done a number of things and we will let you know about the adjustments. Thought, in the middle of this pandemic, we have a from taxpayers about the amount of money we borrow and what we are going to do about it. Wes is a key role in how roll out that repayment plan. The toolsalk about available to you, specifically in regard to treasury bonds. I know its a hot topic. About how you plan to lay out the strategy to best accommodate our needs for immediate liquidity, and also recognizing youve got some tools available. With these low Interest Rates right now, it may work to our benefit to draw this out over an extended period of time. Secretary mnuchin its very important. I would answer prior to this, we spent time working on 50 and 100 year bonds. There wasnt enough demand to make it worth it. We did get advice on a 20 year. We added the 20 year. That gives us the opportunity to expand the duration and raise money. To borrow antion lot of money. We want to expand our financing in 2030 year bonds. I would like to lock in very low Interest Rates so the money we borrow. Thank you. Thank you, mr. Chairman. Since this takes place in the worst economic crisis in lifetime, the unemployment is it Great Depression levels. 40 of people making less than 40,000 lost their jobs in march. Businesses have shattered and they may never reopened. Act and halfares 1 trillion worth of taxpayer gotten money in your hands . Ppp, half athe trillion dollars for giant corporations. I want to talk about where that money is going. Writeve the authority to rules determining which Companies Get taxpayer relief. Weeks, theyveew been putting out these rules. Numbers said the jobs will improve. On fox news, you said we will better Third Quarter and a better fourthquarter net year its going to be a great year. To make that happen, people are going to need jobs. Will you require companies that receive this money from taxpayers to keep their workers on payroll . Secretary mnuchin let me just comment. Think thed again, i jobs numbers will get worse before they get better. I want to be very clear. I think june will be a difficult quarter. As a relates to the cares act, i take great pride on these bills. These specifics were negotiated on a bipartisan basis. Fulfill thetent to spirit and the details of the law. Different facilities have different requirements. Thats not quite right. Youlaw specifically gives the specific authority to determine the terms on which these loans are made and who can get them. Question, you say the economy is going to recover. Is are you to know going to require companies that received money from this half trillion dollar slush fund to keep people on payroll . Yes or no . Secretary mnuchin our number one objective is keeping people employed. I want to concentrate on it. Thats my question. Secretary mnuchin we negotiated very significant restrictions on employee compensation, on dividends, on ipaqs. Provision where we expect people to use their best efforts to support jobs. Im sorry. I know we have a time limit. In all the facilities that are not the main street facilities, there are no requirements for payroll. The main street facility has a reasonable effort to be able to maintain jobs. If a corporation fires a bunch of people, you are fine with that. Andhey take taxpayer money it doesnt work out commercially, then they can fire people. Question, to my whether or not you are going to require the terms of the loan. Hat people be kept on payroll is that right question mark right . Secretary mnuchin that was discussed by people on both sides of the aisle. About your term sheets you are putting out. Youre not going to require that. Let me ask one more question. Youre not going to require to keep a Single Person on payroll. There are some rules in the term sheets as you identified earlier. They will be able to double depth. They are going to have to sign an agreement certifying they are in compliance. This is what i want to know. Will there be a certification process that assures executives are held personally liable and are subject to criminal penalties if they provide false information or misleading ale out funds . Bailout funds. We will review that. Secretary mnuchin programs like , theirline Program Requirement was to keep jobs. The rest was left up to you. What you are saying is you wont do it. 35 million americans of applied for unemployment. We are charging half 1 trillion. Andare boosting wall street leaving americans behind. Secretary mnuchin i think thats a very unfair characterization. These were discussed with both republicans and democrats at the time. These were completely discussed. You were given the authority to you were given the authority to determine the terms you are setting yourself. Those sheets do not require that a Single Corporation getting dollars in taxpayer money retains one job. Chairman crapo sen. Perdue. Senator thank you, mr. Chairman. Thank you both for being here today. I look forward to your quarterly updates. Chairman powell come out you took your responsibility, that was about 4 trillion on the Balance Sheet when the covid19 crisis hit. With the debt being at 23 trillion and about two thirds of what we have done so far in the 2 trillion relief package, it looks like goes to debt and with the potential of more movement, that would take the balance potentially 13. 5 trillion. It is around of of the 7 trillion today. It could go north of 14 trillion is main street programs level up. How do you put this genie back in the bottle . Help us understand how you are thinking about demand for capital and what it might do to Interest Rates in the shortterm and longterm implications of what we have just done. All. Is not criticism at i would just love to get your thoughts on how we should be thinking about the Balance Sheet, given china, japan, though yo e. U. Are doing something similar. Mr. Powell we expanded our Balance Sheet, we bought a lot of treasury securities to get working. As these facilities grow, we will also expand our Balance Sheet. That expands the money supply. Time, expect that over but time will probably not be very soon, but over time, the assets we have in no up the street from these era we have in our Balance Sheet from the off. Era, it will roll but that is some years down the road. Senator how hard it was to get 3. 8, and the4. 1 to consternation we had both politically and economically, so you are confident that over time we will be able to manage the Balance Sheet . Mr. Powell what matters is the size of the Balance Sheet relative to the size of the economy. That came down significantly from the end of 2014 until 2017, just by holding or Balance Sheet constant. So it can be done in a way that is passive and gradual, and it was for three years. Tocame down from 25 of gdp 16 or 17 of gdp. So it can be done. In the meantime, i would say, it doesnt have implications not saying there are limits to this, but it is not something that raises Financial Stability or inflation concerns today. Senator i just want to thank you and echo what was said earlier about your availability through this crisis. I know that you are recently married. I dont know where your wife is these days, but congratulations to you and her and thank you for all the sacrifices you are making. I want to correct the record. We have been told in this meeting that there is no data there but i went ahea but i want to highlight some numbers. The bill killed 4000 company to banks, a bipartisan bill done in 2018 that modified parts of the bill and send our community banks. They are the rock stars in this process. In the p. P. P. Program, anyway. Over 800 banks were approved in the system prior to this. They made 5. 3 billion in loans. Way, 99. 8 of the 520 billion went to companies who did what we wanted to do. 93 of those loans are 250,000 or less. My problem is i think we have on that isls, one happening now and what we have done here, is that we have this incentivized people to come back to work. My estate is beginning to open up safely. My state is beginning to open up safely. It gives me great confidence we can open the economy up. The unemployment premium is keeping people from coming back to work. There are employers in my state who want people to come back to work, but they are saying, what would i do that . I will enjoy this remembering now, calming back in a couple of months. Second thing is a lot of small employers actually encouraged their employees to go on unemployment, even though they were getting money, and they were hoping that when the revenues dotted when they opened up, they would begin to bring people back and use the loan to pay stories then. Help us think about how to deal with that. The Labor Department had one point said it would put some rules out about this premium. If an employer once an employee , theme back to work stripper should not be given employment insurance. Could you address that. Chairman crapo if you could be brief, please. Mr. Powell let me just say we are aware of the technical problem here and we want a technical fix on unemployed insurance. But if you upper back if you offer back a worker and they dont take that job, they will be required to notify the local Unemployment Insurance agency because that person will do longer be eligible for unemployment. Senator thank you. Senator thank you to all of the and to fires testifiers analysts. Chairman powell, i want you to take us through those go scenarios. The first is, if Congress Takes no additional action in the next couple of months, and the other is if Congress Steps into the fiscaland passes another policy bill. Tonow that you are loathe weigh in on specific policy considerations, but i want you to talk in terms of the overall economy on the impact of quarters three and four should we decide to say that the bills we have passed are enough. Mr. Powell it depends on the path of the economy, honestly. As i said, my concern has been the risk and possibility of longer damage to the economy through unnecessary insolvency on the part of households and businesses and longterm unemployment, and if we find ourselves in that place, we may have to do more. Senator according to census data, about half of Small Businesses are going to run out of cash within a month. Reopening slowly their economies, but Consumer Behavior is not going to rebound to normal within one month. Do you think there is going to be a Strong Enough rebound in Economic Activity in the next 13 months for that alone . From what we have already done alone, to prevent thousands of Small Businesses from going under, or do you think there is a need for additional fiscal policy . Mr. Powell i think we are going to see here fairly quickly how the reopening goes. It is very hard to know. We havent done this before. No one has done this before, so i think you will you getting a lot of information quickly here in terms of what is needed. I am reluctant i make my comments on fiscal policy at a general level. I am reluctant to talk about timing and specific provisions. We tried to stick to our senator i will try to give you an openended question. Please provide the panel with comments about the importance of fiscal policy the next 69 months. Mr. Powell it is a combination of a couple of things. First, as i mentioned, the risk of lasting damage to the productive capacity of the economy. To the labor force because of longterm unemployment, and avoidablenecessary insolvencies on the part of small and mediumsized businesses. Those things create a real risk. We address liquidity problems, not solvency problems. We have lending powers, not spending powers. Over time, and this is not a certainty but a possibility, over time, solvency problems emerge from the credit problems from liquidity problems. It depends on the path the holds, how well the economy grows, and which path we find ourselves on. I think what congress has done to date has been remarkably timely and forceful. You could say the same about what we have done. I do think we need to take a step back and ask, over time, is it enough . And we need to be prepared to act further. I would say we are if the need is there. Chairman crapo. Senator seems to. Senator me the distinction between a solvency problem and liquidity problem applies to biggest additions, big corporations and even government, but when talking about a Small Business or family, there isnt much of a difference between having a cash problem and simply being flat broke. Seems to me that that distinction, which you are able to make as head of the Federal Reserve is a rather abstract one for the companies that are 8 person, and the families that are at the economic deaths door. They dont distinguish between a solvency problem and a liquidity problem, they run out of money. Section 4114chin, of the cares act states that carriers receiving payroll grants shall, refrain from conducting in voluntary furloughs or reducing pay and benefits until september 20, 2020. But on april 1, United Airlines received 4. 9 billion, and on may 1, united announced it would reduce 28,000 workers from fulltime to parttime within two weeks. Was that announcement in violation of the terms of the Payroll Support Program . Mr. Mnuchin within the right now they are in compliance with the program. Senator were they violating this when they first announced it . Mr. Mnuchin again, i dont want to go through specific situations with specific companies. Right now, we believe they are in compliance with the agreement. Senator thank you. Senator senator tillis. Senator thank you, mr. Chairman. Chairman powell and secretary mnuchin, thank you for that i think, heroic work your team are doing under immense pressure. One thing i want to go back to that was mentioned by two of my colleagues, i like the fact that the administration is going to cover legacy. I personally believe real estate and isr severe stress likely to go through more until we get positive growth from the economy. One thing i am concerned with, secretary mnuchin, is that right now it looks like we have about 15 from the american , and association percent from the cmbs service providers. I think that is low given the circumstances right now, and given what we may need to do to get the servicers and borrowers to the table. Mr. Mnuchin it does seem a bit low to me as well. Have a structural problem of loans that are in securitizations and how they have to be dealt with with a special service. That banks have much more flexibility but this is a technical issue. We mean it took him back to congress to work with you on a technical fix. Senator thank you. I think we need to do it. I am gravely concerned with their retail shopping, the Hotel Lodging industry, industries that are largely going to lag. Ehind some of the businesses i would be interested in your feedback. Awas also curious about program for other areas where we should expand. I am thinking about new issues, and development loans. Have you thought about that . [indiscernible] secretary mnuchin we have thought about all of those. I want to thank the people in the fed and treasury who work around the clock to get these facilities up and running. Prioritized these. As the chair and i have said, we will look at all of our options to make sure we support jobs across the spectrum. Senator i would particularly be interested. You dont have to expand on it here, but on new issues, i am very interested in that, what you think is within the realm of possibility. Chairman powell, do you have anything to add to that . Mr. Powell just our commitment, as a secretary suggested, to look at those facilities as we learn more. Senator secretary mnuchin, i have one question for you then a final question for the both of you. The taxnking more about burden right now on middleclass households. Do you think any of our future work here could include maybe a reduction in tax for middleclass households and whether that would be helpful . Mr. Mnuchin i think that is something that should be seriously considered. Senator the final one that i i chairman, i will keep have a growing sense that you have a bit of a donut hole. Some businesses that are not quite with the Paycheck Protection Program because of their size. To be eligible for the upcoming mainstream lending facility. Secretary mnuchin, i appreciate what you said about the eightweek coverage period. All of that, we need to look at. We know the coverage period will take congressional action, but when we massage the p. P. P. , it may fix the problem for some of these businesses in the doughnut hole. We dont have the full information on the mainstream lending, but i get a sense there will be some people caught in between. What are your thoughts about what we need today there . That final question is for both he and secretary powell . Mr. Mnuchin i will say our objective is to make sure people do not fall in between. Between the p. P. P. , the eidl loans and the mainstream program, it is our objective to cover as many of those companies as possible. Mr. Powell that is one of the reasons why we went to a smaller minimum loan level on the main street facility mainstream facility in the last term of the term sheet. Senator thank you. I also look forward to seeing mainstream lending act mobilized in the coming weeks. Thank you, mr. Chair. Senator senator van hollen. Senator thank you, mr. Chairman. Secretary mnuchin, chairman powell recently acknowledged the need for additional fiscal securing a response from senator menendez that state and local the layoffs of police, firefighters, First Responders and teachers will make a bad Economic Situation even worse. You agree with that assessment . Mr. Mnuchin i recently provided guidance on the 150 billion recent to the state that they state, we sent to the s that they can use that money without restriction, so i hope there would be no layoffs as a result of that relief. That was our objective. Senator but in addition to them that just moves the burden under other Public Service providers, including teachers, Health Care Workers and Public Health care workers. Wouldnt you agree that layoffs of those workers or any workers takes a bad situation and makes it worse . Mr. Mnuchin it does. But the question congress and the senate needs to address is who should pay for that, which taxing authority . Whether it is the states or the federal government . I look forward with working with the senate on a bipartisan basis. Senator you said which taxing authority. You know states have balanced budget requirements and the federal government doesnt. Need to takee we action here to prevent a bad situation from getting even worse. Let me ask about the p. P. P. Program. A Bipartisan Group of senators have spoken to you about some of the unilateral and unnecessary conditions the treasury regulations imposed on p. P. P. In fact, the Small Business Administration Inspector general recently said that 25 limit on forgiveness for fixed costs is, not aligned with language in the statute. Once that are raised another flaw, which is the design in the statute, in my view, regarding the june 30 deadline for qualifying for forgiveness. The house, in the heroes act, reformed both these provisions. Do you agree with the changes the house made in the heroes act with regards to p. P. P. . Mr. Mnuchin i am not familiar with the specific language. But i do want to comment on the 75 issue. The s. B. A. Wrote back to the ig to disagree with that. I have spoken with both senator cardin and sen. Rubio this. The program was designed for eight weeks. Senator mr. Secretary, i know what your position is. I just wanted to highlight the position of the aspect of general of the s. B. A. You cant find that 25 limitation anywhere in the statute, i challenge anyone to take a look and find it. I would ask you to take a look at the rebuilding main street initiative. Get bipartisan support, and i look forward to your responses there. Let me turn to chairman powell and just say that i believe overall, the fed has acted quickly. For the most part, necessarily and appropriately. But i have serious concerns about the actions you have taken with respect to the secondary market facility, with respect to junk bonds. Heresponse to senator sasse, emphasized that at least with the health program, you were essentially helping those with aaa ratings, but when you look at the secondary market facility, you have purchased junk bonds, and we have this strange situation where w the same day we had unprecedented damage in terms of unemployment numbers, the stock market was, in fact, going up. You pointed out that most of the are thoseng hurt earning less than 40,000 a year, in fact, 40 of them have lost jobs. It is not clear to me why putting money into junk bonds is helping folks on main street. A fact, it puts the public in firstloss position behind even the most subordinated bondholders and uses public bus to take on decades of future cash loans with a price risk. Can you respond to that concern . Mr. Powell thanks. I would be glad to. Only highyield bonds weakened by are those of companies that were Investment Grade on march 22, but were downgraded, socalled fallen u. S. S, in many cases, companies with many thousands of employees. We made them eligible for the credit facility. We dont want to have a cliff where the Investment Grade markets are working well, but the leveraged markets and nonInvestment Grade wor markets are not. So we did a very narrow list of actions to support Market Action in those markets, including Exchange Traded funds. That has had an effect to improve market function. Even better, they can borrow themselves now. A that has been happening and that is a really good that is kind of why we did it. It is an error intervention. We are not buying junk bonds it is a narrow intervention. We are not buying junkbond across the market at all. Senator i think those junk bonds were already in trouble before the intervention. The trouble was not directly pandemic. The and if you could get back to me and show me where the fed has authority to purchase this kind gradeinvestment instruments, i would appreciate it. Thank you. Senator senator kennedy. , do you chairman powell believe that states and cities are going to experience revenue shortfalls as a result of the economic lockdown to try to contain the spread of the coronavirus . Mr. Powell yes, senator. That is what we are seeing. Senator do you think they will be substantial . Mr. Powell yes i do. Senator is your Municipal Liquidity facility set up . Mr. Powell yes, it is. We are probably two weeks away from it actually being operational. Not quite yet. Senator as i understand it, you shorttermill buy paper like revenueanticipation notes from the states, which will allow those states to issue that shortterm paper at a lower interest rate, am i correct . Mr. Powell they will be able to issue it at all in many cases, so, yes, we are supporting market function there. That should support market fashion across municipal markets in longterm market function across principal markets in the longterm. Senator do you know how many states are limited . Mr. Powell i think for and states have a balancedbudget requirement. Senator in the state constitutions, some states are prohibited from borrowing money to operate government. They can borrow money to build things that not operate government but not to operate government. Are you aware of that . Mr. Powell i thought most states could borrow during the course of the year for maturities of less than a year to smooth out the inflow of cash, revenue anticipation notes and tax anticipation notes. Senator have you heard of and inquiries about the Municipal Liquidity facility . Mr. Powell yes, we sure have. Senator ok. Secretary mnuchin, do you agree with what the chairman said . Mr. Mnuchin yes. Senator ok. Observation,you an mr. Secretary. I am not expecting you to comment on it. It looks to me like the game plan is to have senator mcconnell, senator schumer, leader mccarthy, speaker pelosi, and you, go off and negotiate a deal on the next package, if there is one. Then you will bring that deal back to the republicans and democrats in both houses. And if the past is any indication, the republicans and the mcgrath in both houses who dont get to participate in the andtiations, will moan grown and complain and then move and follow their leaders. I am not sure that is going to work this time. Ythink that whatever deal ll come up with will receive serious pushback from both democrats and republicans in both houses, for a variety of reasons. I could, of course, be wrong, but i doubt it. Allowuld we not agree to the 150s to use billion that we have already appropriated to them to address shortfalls in their revenue base as a result of the coronavirus . Mr. Powell senator kennedy, i just want to comment on the first thing. Mr. Mnuchin i have no intention of doing what you just described. Senator i dont want to debate, mr. Secretary. Its been done in the past. It was done last time. Mr. Mnuchin senator, there were senators, both30 republicans and democrats, but participated in the Detailed Analysis of the last bell. Senator i understand, but there are a lot more members in the house and senate. Critical. Eing i am just telling you that that is the way it works around here and we all know it. Supportiveou not be we have already spent 150 billion in the cares act. The states have. We know they will have shortfalls. We may not be able to pass bill, i think it is less than 50 chance of passing another bill. Why would we not allow states, without appropriating new money, to use that money to address revenue shortfalls that you and the chairman of the fed both agree are going to exist and be substantial, and why would we not do that today . Mr. Mnuchin senator kennedy, i appreciate your bill. I had the opportunity to meet with you and other senators and the president. If there is bipartisan support for that, i am sure the president and i would look forward to that. It take fort would you to agree to support it . Demonstrate bipartisan support . Mr. Mnuchin i have a phone call scheduled with you later today so i will be happy to talk with you about it, but as the president has said, if there is bipartisan support in the money has already been allocated, that is something i assume we would very seriously go along with, but again, there has to be bipartisan support7 [chairman bangs gavel] senator 60 votes in the senate, would you consider that bipartisan support. Senator be brief. Senator how much time do i have . Senator your minute and 60 seconds is over. Senator i am sorry. Would you as a but me, mr. Secretary and mr. Chair . Mr. Mnuchin again, i leave that to you you and the senators there. I appreciate the unanimous support we had previously. Senator i am sorry i went over, mr. Chairman. Senator no problem. Senator cortez masto . [laughter] senator thank you for joining us. Let me start with chairman powell. We had a conversation on the liquidity problem, i know that you have highlighted that some of the sectors, airlines and in roughty, are financial shape. Because i come from nevada and it is a hospitalitygenerated state where we get most of our revenue, can you speak to the challenges for hospitality in terms of the Tourism Sector right now . Mr. Powell i think sectors of the economy like about where the Business Model is to gather people in one place and entertain them, fly them around, whatever you do, those are places that will take some time for the public to return. It will happen, but it will take some time for the public to regain confidence and adapt to the new world and start traveling and taking vacations and going to restaurants. Senator that is one thing we have not talked about, is the notion that when we look to open and that is what we want, find a balance between opening our businesses in , but they are only going to be as successful as Customer Confidence that is there to patronize them. Not only true for the hospitality industry, that is true for all businesses. I know that the service and retail [indiscernible] my understanding is over 2 of those businesses have closed permanently already. How are we to address this Consumer Confidence issue . I know that is something you have thought about publicly, i think. What should we be doing . Mr. Powell it affects different sectors in the economy. The ones we talked about are the ones where it is most important, but other sectors may be able to recover much more quickly, and we certainly hope so. But the number one thing is people believing that it is safe to go back to work or go out, and that is about having a sensible, thoughtful reopening of the country, something we all want and something we are in the early stages of now. That is what it will take for people to regain confidence and resume their activities, again, at a different pace depending on the nature of the business and the nature of the activity. Senator and the health care piece of it. If they feel safe that they will be healthy and safe when they go , isnt that true . Mr. Powell yes, it will be a combination of getting the virus under control, development of therapeutics and a vaccine, all those things. It also helps seeing what your eyes are telling you. You can feel it already that people are doing things they would not have done two months ago. I think the process will take time. Senator until that happens, many people are relying on local governments and state governments. Lookinglling them to the state and local governments to tell them how they can stay safe, open businesses, where the Health Care Facilities are, the testing that is needed, contact tracing, isnt it true that that is where they rely, on local and state governments . Mr. Powell i think that is why are the decisions will be made, state and local governments, and also individual businesses. We talked to businesses, nonprofits and he does in all those areas, and certainly for the larger ones, there is a very thoughtful process going on. Ultimately, people will make their own minds. You can change the formal social distancing measures, but ultimately, people will decide what they should and should not do with themselves and their families. That will boil down to having pretty good confidence that it is safe to go out. Senator i agree with you. I also know, at least in my state, that many are waiting and relying on their state and local governments to weigh in and help them make those determinations and set those guidelines to make sure their committees are safe, that is why funding for state and local governments is so important. Not on the internet fiscal package the next fiscal package, but you also touched on municipal lending. I would like to see more of that available to smallerpopulated states and local governments. Nevada has 3 million population. There has to be a way to also give them the opportunity to get the liquidity and the funds they need to make sure they are providing that safety that social safety net. I know that my time is up. Secretary mnuchin, i have questions for you as well. I will submit those. Thank you both for joining us today. Chairman crapo thank you. Before i moved to senator mcsorley, i will announce that the vote started about 20 minutes ago and we still have a number left to go. Please Pay Attention to the clock. Sorry, it just turns out this way at these hearings. Senator mc sally. Senator thank you, chairman. Chairman powell am a good to see you. China unleashed this various on to america and the world, with a coverup, deception, continued propaganda campaign, costing now over 90,000 american lives. We dont know who patient zero is. They destroyed samples, sinus doctors and kicked out journalists silenced doctors and kickstart journalists. Their behavior continues to be at the would of this. This is why we are here today, talking about the economy, which is very strong and now really struggling. People all over arizona really struggling because of the calamity from this virus. Let meink anybody ask, i dont think any of you think there is any reason we should be rewarding china or Chinese State on enterprises or entities that one china to prosper as we implement massive initiatives to support the economy. Do any of you want that to thatn is it fair to say none of you want that to happen . Mr. Mnuchin but is correct . Mr. Powell that is really not an option. Senator none of us as americans want china or chinese owned enterprises prospering. I want to talk about a Company Called blackrock. March 24, the Federal Reserve bank retained blackrock as a financial agent to operationalize and transact with primary dealers in the primary market Corporate Credit facility, and the secondary market Corporate Credit facilities. They are for companies who sell bonds and loans during this downturn. Typically there is a Competitive Bidding process, but blackrock was selected for this one. As you know, blackrock is one of the leading investment banks in chinese bonds, including helping Chinese Companies list and go public in american stock exchanges. Chinese Companies Listed on american exchanges are perhaps for him it the Accounting Company and Oversight Board from reviewing their audit reports. Blackrocks website, they have a page titled 5 myths and realities about investing in china, according to them, one of the biggest myths is that Chinese State owned enterprises dont control their economy. Blackrock even tries to back it up with data. I will not going to all of it, but it is ridiculous. And doesnt mention anything about human rights abuses, the hong kong democracy protests, or even that the country is ruled by a communist party. The bank big ox to mention the fact that communists the bank neglects to mention that communists actually will china. My question is, how and why does blackrock get selected as a financial agent for these facilities, how much money do they stand to make as an agent, and what if anything will prevent blackrock from taking those profits they earn to invest in china and Chinese State owned enterprises . Mr. Powell i guess i will take that. We hired blackrock for their expertise in these markets. They are actually an asset manager which is active in the markets that we are concerned with, with the primary market and secondary market headed facilities. It was done secondary market credit facilities. We will review the contract as we, in practice, do going forward. The fees are a matter of Public Record and will be happy to supply those to you. What can we do to prevent any of their profits from this to actually benefiting china and Chinese State owned companies, in which they are invested in . Chairman powell all large asset securities. Chinese these are global asset managers. I am not here to defend or criticized him for that, it is just that it is not really relevant to the work we are trying to do. We are trying to create conditions in which u. S. Workers can return to their jobs and keep their jobs. That is our sole focus. We do not reach out to other Public Policy object to score to we are notthat trying to reach out to other Public Policy objectives or deviate from that. What is important is that we do everything we can to support [indiscernible] senator it is important for all of us. Thank you for your leadership to support the economy and to get our economy back on track. But it is also important we wake up as americans and hold china accountable, and they are not allowed to profit because of these investments taxpayers have made. I really think blackrock and others need to also wake up and do their patriotic duty. Communist china should not be profiting from unleashing this calamity on the world. That should be something that should unite all americans even if they work at blackrock. Chairman crapo thank you. Senator jones. Senator thank you, mr. Chairman. Quickly, a followup. I agree that we need to hold all people accountable, china, the w. H. O. , folks in this administration, Everybody Needs to be held accountable if they had deficiencies in what is going on with this pandemic. Assessry mnuchin, let me recently that the treasury is going to begin issuing debit cards for americans for their direct payments. You will recall that senator cotton and i sent a letter shortly after the passage of the cares act encouraging that, so i appreciate your willingness to do that. I think it will quickly get money to millions of americans that have not received those direct payments as of yet. I wanted to ask you about the payroll protection program. As we talked about early on in the first round of funding, there were problems with the banks, there were underserved communities not getting their funds. I think we tried to correct that better, but the s. B. A. Is issued a report in the wake of that, that recommended the agency start collecting demographic information on who loans. Ose can you comment to work with the s. B. A. Administrator to collect demographic information mandatory for these p. P. P. Loans so there is that muchneeded transparency . I can tell you, in the forms, the lenders are required there is demographic information. We have been advised to make that optional and not mandatory, but we very much hope people provide that. We are very much committed to making sure that we serve the underserved communities with the money we have left. Senator thank you. Chairman powell, you know, i also sawyers each and i read your comments saw your speech and i read your comments. Comments, judge taylor said, people will hear what they hear and see what they want to see. What i recall is a call to action from that. 40 of americans that have lost their jobs and how it is affecting our minority communities, not only in their health disparities, but what is being shown is the disparities in so many things. You mentioned how this pandemic can a exacerbate the existing gaps in wealth and ownership between minorities and even war people in general. We started the pandemic with 30 million poor people and it will get much bigger and much more across racial lines. What can we do to make sure the wealth gap doesnt get greater as we open back up this economy . The job lossesl, that have been happening have been happening in the service economy, particularly in those parts that are dealing directly with people. That is a loveless paying jobs. It is restaurants that is a wellpayingess jobs, restaurants, industries, retail. I recommend that report, which we just released. That is where those statistics come from and there is a lot in there. It is stunning how quickly households get into financial trouble, how little many low income households have in the way of resources. Problems. Longterm for now, this very much falls on us to do what we can to support the economy. As i mentioned earlier, you have 20 some Million People out of work, and we want to greater world where they can go back to their jobs or find new jobs. I think that is something a lot of us as policymakers should be strongly focused on. Senator thank you for that. It seems to be connected to your comments about also making sure that we keep people in their livelihoods, keep the unemployment numbers down. Standpoint, wer have been focused on both saving lives and saving livelihoods. And while we dont want to give folks incentives to stay on unemployment, we certainly do want to give incentives to businesses to open carefully. I would encourage you, if you havent, to look at the Paycheck Security Program that senator warner and others and i will be filing this week. I am assuming that the more opportunities we can give employers to keep people on payroll with benefits, it will aid in opening up the economy safely and trying to keep us from getting into that longterm recession. Would that be fair . Mr. Powell i would be happy to look at your latest proposed solution. Senator thank you, mr. Chairman. Thank you for coming. Chairman crapo thank you. Senator moran. Senator mr. Chairman, thank you. Had i had more time, i would have extolled the virtues of both the secretary and the chairman in their efforts in Public Service during this crisis. In the absence of that time, i hope you understand the sentiments that sentence expresses. I want to focus, secretary mnuchin, we have talked about p. P. P. And seen the positive consequences that have come from the program. There are large businesses, main street, in which the facilities are being developed to assist. But i am worried about other businesses. Not that i am lobbying for any company, an example that comes to my mind in kansas is yellow roadway trucking company. It employs almost 30,000 people. It is not Investment Grade. It has leverage, and it is a company that, in the absence of assistance, the jeopardy of its employees is significant. I think there is a lot of companies out there like that. A number of companies in kansas like that. I want to make certain that we are doing the things necessary to prepare to be of assistance. To them. I think senator toomey and senator warren earlier indicated that very few of us expect the treasury to not have to take losses, that there needs to be some risktaking here, and i want some kind of assurance that , thatthe b4 facilities these kinds of companies that are hugely important of the economy can receive some assistance with the facilities of treasury and the fed. Secretary mnuchin, is there some have . Of comfort i can mr. Mnuchin you have my assurance that we will look back at that specific company and see what we can do and get back to you. Senator i hope that it is more than that because it is not just that company, there is a number of Companies Across the country, not just in kansas. Mr. Mnuchin to be clear, Companies Like that, and i said before, we want to make sure there are facilities that companies dont that in our facilities, that companies dont fall through the cracks. Senator let me suggest to you that timing is of the essence, just as it was in p. P. E. The circumstances Companies Face today in laying off employees are present and around the corner, so i encourage the precipitous but awful action in addressing these circumstances. Let me see if i can get two other questions. One, do we have a timeframe, mr. Secretary, for further guidance bbcs loanhe d forgiveness . Mr. Mnuchin there is some guidance about just came out on loan forgiveness that we believe deals with most of the major issues. Senator second question, does plan to and s. B. A. Issue guidance that would allow 5013 c organizations to utilize the alternative size standards for eligibility . Mr. Mnuchin we are reviewing that specific request. We have that request and we are reviewing it carefully. Senator is that something that the decision is close to being imminent . Mr. Mnuchin we will decide one way or another whether we can do that, so the answer is yes. Senator thank you very much. Thank you, mr. Secretary and mr. Chairman. Mr. Mnuchin thank you. Chairman crapo thank you, and you get a gold star, senator moran, for yielding a minute earlier. Senator smith. Senator thank you, mr. Chairman and thank you, Ranking Member brown. Thank you both of you for being today. Chairman powell, you talked about how we will not be able to solve the economic crisis without solving the Public Health crisis, which i agree with. Secretary mnuchin, you said we need to reopen the economy in a thoughtful way, can which i also agree with. Seems to me the important part of being thoughtful is making sure americans have Accurate Information about what is going on. I have no doubt he will be surprised to hear that a lot of us were taken back when, a couple of days of so i go a couple of days or so ago, we heard eric trump, acting as a surrogate for his father, saying that they the democrats are taking away Donald Trumps greatest tool, to be able to going to an arena filled with 50,000 people every time, so that they will you watch, they will milk at every single day between now and november 3, and guess what, after november 3, the coronavirus will magically disappear and everybody will be input to reopen will be able to reopen. This is the kind of misinformation that concerns me greatly. Are you aware of any evidence that what eric trump said, that his assessment was accurate . Mr. Mnuchin i did not see his comments, nor do i think in this setting it is appropriate for me to comment one way or another. Senator i dont think it is accurate and i think it is exactly the kind of misinformation that is so damaging to, and undermining of both our economic approaches and our policy approaches here. Let me ask you, secretary powell, even before the covid19 minnesotans were struggling to find unaffordable place to live. I spoke with hundreds and hundreds of minnesotans and hundreds of Community Leaders about this challenge, and developers as well. They all told us that every part of the housing continuum, from housing for homeless people, support of housing, all the way up to a workforce housing, that this is a significant affordability challenge. Now we have this coronavirus challenge. I along with many of my colleagues on this committee have been pushing for support for housing, 11. 5 billion for homelessness assistance, 100 million for rental assistance, and money to stabilize homeowners. Can you talk about the importance of the housing sector in our economy right now and what challenges you see a had for us as we challenges you see ahead for us . The most important policy objectives should be to keep people in their home and keep bills. Ying mr. Powell these are longer running problems which are under pressure right now. A lot of the jobs are in big urban areas, that is rather job creation is, yet the cost of living in those races is higher and higher, very high in those places, is higher and higher. Very often, the people providing services have to commute very long times to be able to afford to live in a place like about. It is an issue that has been with us for a while. We cannot really directly they are important to our economy. Senator i realize you dont want to comment specifically on the specific policy issues we have confronting us here in congress, but in general, do you see a risk to the Housing Market as the economy continues to take a downturn in the months ahead . Mr. Powell i think there are multiple risks. Theis to the extent that forbearance doesnt do the job, you may have people losing their homes. Thats something, given this is a Natural Disaster in the way, that is something that it would be great to avoid. The also see the housing industry coming to a halt, or under great pressure. That is a lot of jobs right there. What it really comes down to is sensibly, thoughtfully opening up the economy in a way that keeps people safe. I think that is really important that we do that well, if we do, these other things will take care of themselves over time. Senator this is an issue i think we should continue to work on and talk about, the challenges people will have if they lose their home, the Ripple Effect of people not being able to pay their rent or mortgage, and the impact that has all the way through the housing continuum, i think, it is a great concern. If you dont have a safe place to live, nothing else in your life works. It is really important for us to address it in the next package. Thank you very much. Chairman crapo thank you, senator smith. We have been joined by senator cinema. Senator synema. She will be asking her question by audio only. If you finish in five minutes, i may be able to vote. Senator thank you for being here today. Arizonans from every corner of my state are worried about their health and their future, that is why our office has doubled our team to better serve arizonans. Our goal is to offer topnotch considered services, connecting them with resources and going the extra mile to make sure they get what they need. I am glad we are having this hearing, because robust congressional oversight is critical to make sure we know where the cares act money is going. It is also vital to ensuring arizonans are not bogged in government bureaucracy. I focus on cutting through red arizonans. P my question is for secretary mnuchin. Lets start with the disaster loans. I sent you a letter on april 17, outlining my concerns with how the it administration has run this program. I have not received a response. The cares act promises Small Businesses a 10,000 loan advance within three days of the application. I know arizonans who went through the process and none of them got, their loan advance in three days and no one received the full 10,000. Why arent they getting the full amount and why arent they getting it on time . Mr. Mnuchin first of all, let me apologize that you have not received a response. I will look into that after this and get back to you. As it relates to the eidl program, that is within the s. B. A. , but the s. B. A. Had significant systems issues getting it up and running. I thought the grants were doing much better than the loans, so i will look at that. On the loans, they are rebuilding the entire system. We have over 5 billion loans to process, but we will follow up with you. Senator as you know, the s. B. A. Is totally changed the policy of eidl the only issue 1000 loan advances for each employee up to 10,000. The original plan was. Company. 00 a who authorized the change . Mr. Mnuchin i believe the administrator made the change. I believe her thoughts on that was that there was limited money, and trying to spread it out amongst as Many Companies as possible. Senator she did not think to herself, lets go back and ask congress to authorize more funding to pay for that which they appropriated and called for in the legislation . Mr. Mnuchin there was additional money in the second phase, and we appreciate that congress reacted to that. Senator ok, but secretary, my question is, the s. B. A. Made this change without getting authorization from congress. If they are saying because they did it because it didnt have enough money, we could have give them more money. They still have not used it to give it to people as promised, the 10,000 in the original legislation. Mr. Mnuchin as i said, i am happy to follow up i am not involved in some of the direct specifics of that. So let me follow up with the office. Senator i appreciate that. The next thing about the eidl loans, my office is working on over 300 outstanding piece of s, some of them extended after march. What can you office due to get these to work through these quickly . Mr. Mnuchin that is not acceptable, so we will follow up with the s. B. A. For you. Senator i appreciate that. I have questions about the project Reduction Program as well. Small Business Owners in arizona are working on guidance on how loan forgiveness works. The lack of it has made it. Difficult for them to plan. We received some guidance last friday and there is more to come. Would you tell me why it is taking so long to get guidance for Small Businesses on the loan forgiveness . Mr. Mnuchin it is a very complicated program that we set up in a very short period of time. I thought the guidance we put out with all the issues, if there are specific issues you are hearing, we will follow up with you and provide clarity. Senator i appreciate that. As you know, the application to get a p. P. P. Loan was only one page long, but the forgiveness application is 11 pages long, and according to my staff, requires a minimum of three hours to complete. This is a real problem for momandpop shops in arizona. What efforts can be offered to assist Small Businesses in filling out the complex form . . R. Mnuchin businesses to get that we try as short as we could under the requirements of the law. We try to make it as short as possible. Senator i appreciate that. Mr. Chairman, i see my time is expired. I have many more questions. I will submit some of them in writing. Thank you. Chairman crapdo thank you. I appreciate that. I understand senator brown wants to make a 62nd statement. You can do so. Senator thank you. Another successful hearing. A canary in a birdcage, you all know the story of the mine workers who took the canary down to warn them. That is why we had the new deal with worker protections. A century later, it is feeling like we are back in the mines. Millions of American Workers dont have a union to protect them. Based on the responses we have heard today and from the president over the past few months, it seems workers dont have a government that cares enough to protect them. Look at how the government treats the central workers putting their lives on the line. Look who they are willing to spend money on. That is why Congress Needs to stand up for workers and workers need unions so we can fight back for Economic Security and protections and the dignity they deserve and american values. Mr. Chairman, thank you. Chairman crapdo thank you. I want to thank senator brown for your cooperation in working with us to have this hearing. The cooperative way in which we have been able to work on these hearings. Thatagree with the notion our secretary and chairman are not working very hard to make sure the support we have voted on gets out to those very people who have these lower paying jobs and those who are in the service industry, the Small Businesses and mediumsized businesses and those places that will be needed to stand up our economy as we have the opportunity to do so. We may have a different point of view on that, but i appreciate your support in getting this hearing set up and working. To our witnesses, secretary mnuchin, chairman powell, i appreciate your cooperation as we put together this hearing. We are plowing new ground in the senate. Cooperation in getting us through this hearing and getting your report to us is deeply appreciated. With that, i will say that for senators who wish to submit questions for the record, those questions are due on tuesday, may 26. I ask our witnesses to respond to those questions as quickly as possible. Earlier today, Federal Reserve chairman Jerome Powell and treasury secretary Steven Mnuchin testified remotely before the Senate Banking committee about the 2 trillion cares act, which passed in march as part of the government coronavirus response. Watch tonight at 8 00 eastern on cspan. New Jersey Governor Phil Murphy has a briefing today on the coronavirus. We will take you there live when it does start. The u. S. House swore in two new members today, tom tiffany, who election inl wisconsins seventh district, and mike garcia, who won a special election to represent californias 26th district. The new members had a chance to address their colleagues followed by a ceremonial swearingin with speaker nancy pelosi. Pray. Let us compassionate and merciful god, hank you for giving us another day. Inspire the men and women of congress during this time of to find ways ing of serving their constituents nation as best they can. May their efforts and with local work