Transcripts For CSPAN3 Treasury Secretary Mnuchin Federal Reserve Chair Powell Testify On... 20240712

Been configured to maintain 6 foot distances between senators, witnesses and other individuals in the room necessary to operate the hearing, which we have kept to a minimum. For those joining remotely, a few Video Conferencing 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 you ask questions. If there is a technology issue, we will move to the next senator until its resolved. Again, remind all senators and our witnesses that the fiveminute clock applies. Those of you remote should have a clock on the screen showing how much time is remaining. Well try to give you a gavel reminder when your time is almost expired. To simplify the speaking order process, senator brown and i have agreed to go by seniority for this hoogerheide. With that we welcome our witness steven t. Mnuchin, secretary to department of treasury an honorable jerome powell, board of governors of the Federal Reserve system. 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 support the Federal Reserves 13 3 programs and facilities that support and facilities that facilitate liquidity in the marketplace and support eligible businesses, states, municipalities and tribes. So far approximately 195 billion of funds under the title 4 cares act have been leveraged to provide trillions of dollars in liquidity back into the markets, supporting credit flow and helping to stabilize the economy through the primary market and secondary the term asset backed, the main Street Lending program and the Municipal Liquidity facility. That leaves around 250 billion in funding remaining under title iv of the c. A. R. E. S. Act. Theres been Significant Interest in exploring ways the Lending Program, which offers support to small and mediumsized businesses and nonprofits can be improved to expand access and utilization earlier this month the Banking Committee held a hearing on the status portfolio 13 3 facilities where witnesses made the case and provided recommendations for the change of the lending Street Program to broaden its access and use to address commercial and real estate markets. In that hearing the president on the committee of Capital Market regulations shared his view that small and medium sized businesses will need Financial Support for several years to recover from the impact of the covid19 pandemic. He continued, while our economy is improving, given the depth to which it failed there is still a long way to go. Small Business Revenues continue to be well below prepandemic levels, and the recovery has stalled since july. A key part of this Financial Support should come from the main Street Program authorized by the c. A. R. E. S. Act. In the same hearing, the president and ceo of the real estate round table painted a bleak picture of the condition of the commercial real estate market. He said it is 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 stress in pools for mortgagebacked securities and threatening to result in countless commercial property foreclosures. The situation must be addressed. In july i sent a letter to each of you, secretary mnuchin and chairman powell urging you to expand access to the main Street Lending program, including by setting up an assetbased Lending Program and addressing the commercial real estate market. In addition to expanding the main Street Lending program theres been meaningful interest in opportunities to allocate remaining c. A. R. E. S. Act funds. In august House Financial Services Committee Ranking member mchenry and i sent a letter to each of you urging you to implement the remaining funds under title 4 to work to the fullest extent, including by expanding the main Street Lending program to further support main street businesses, their workers and the american economy. The Federal Reserves 13 3 facilities play a Critical Role in strengthening the economic recovery. Its important to continually assess what areas of the economy and Financial Markets continue to be in support and identify options for providing additional needed support whether through expanding existing facilities or creating new facilities. In july i sent a letter to the federal banking regulators urging each of them to extend and expand critical c. A. R. E. S. Act relief where there is expression including relief from Community Bank ratio from december 2021, the troubled debt restructurings to january 1, 202 2022 and expected credit losses to at least january 1, 2023. Since that letter ive heard additional concerns from both banks and Credit Unions. Not only have banks and Credit Unions experienced a significant flow of deposit in flow of deposits during this pandemic but Congress Also has tasked them with supporting the economy, particularly through the paycheck protection program. Their role and these unique circumstances threaten to cause key regulatory thresholds to be breached, and a ratcheting of regulation that would otherwise not occur that could keep them on the side linelines. The Regulatory Framework should account for these unique circumstances and enable banks and Credit Unions to continue to support the economy. Continue supporting the recovery. Title iv contains robust oversight provision. Section 4026 is what brings us here today, and it also established the Congressional Oversight Commission which has held two public hearings and issued four reports today. And the special Inspector General for 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 c. A. R. E. S. Act has benefitted the American People and the economy. An update on the status of the 133 emergency facilities including an assessment in the opportunities for and expand the main Street Lending program. Steps the fed and trashy have and treasury have taken and will continue to take to provide transparency into the loans, loan guarantees, and other investments under the c. A. R. E. S. Act. Opportunities to utilize any of the 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 role of the financial institutions, and whether congressional action is needed. Although there have been positive economic signs in recent months, americans continue to struggle with feel the effects of the covid19 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 toward a realistic package that can actually get passed and signed into law would best serve the American People during this difficult time. I appreciate the work of both secretary mnuchin and chairman powell in response to this horrible pandemic to support Financial Markets, businesses and the economy. Thank you again to each of you for joining the committee today. Senator brown, are you with us . I am, mr. Chairman. Thank you. Its a pleasure to be here again. Im disappointed this hearing wasnt held fully remote. Im glad to see masks in the hearing room. Chairman powell, i want to thank you for your leadership in calling for a National Mask mandate, something no other republican im aware of has done. I know many of my colleagues, republicans and democrats, cringe when they see these trump rallies, when they see people packed together shouting, not Wearing Masks. We should be trying elected officials from the president to the rest of us should be trying to stop this virus not spread it. Today there are more people out of work than there were during the 2008 financial crisis as if you wouldnt know it the way President Trump and secretary muchan act as if were through this crisis and well on the road to recovery. Thats what happens when you measure the health of the economy only through the stock market. Their continue to be only about 1,000 deaths per day from the coronavirus. That doesnt show up in corporate Quarterly Earnings reports apparently. In 22 states, coronavirus cases are surging rather than receding, and scientists and Public Health experts predict it will only get worse as fall and winter begin. Families are under unbearable stress. Most of my colleagues know that. Most of you have children and grandchildren trying to either educate their kids at home or worrying as schools open without sufficient plans to protect children and teachers and cafeteria workers and security guards and custodians. That doesnt even include our sons and daughters and the risk they face at colleges and universities. You wouldnt know any of that if you looked at corporate profit forecast. The president and this administration continue to act like everything is business as usual because for them it is. The coronavirus isnt really affecting them or their wealthy friends or their comfortable jobs. Ceos arent the people working the cash registers or cleaning hospital beds. They arent risking their lives every day to keep food on the table. Most ceos dont live in the neighborhoods where black and minority owned restaurants and businesses are shutting down. All of us should think for a moment of the anxiety with the essential worker, the stress she faces. Think about coming home at night worried you might have picked up the virus at work, and you might be exposing your children and your family. Clevelands a pretty good barometer for the country long before the great recession, our trade and tax policy essentially bipolar disordered the industrial midwest. Communities lowatched factory after factory close with no plans to rebuild our local conmiss. Entire neighborhoods, entire towns hollowed out. My zip code 44105 had the most closures in the United States at the beginning of 2007. By the next year thousands of cities across the country were suffering, millions of families lost their homes. The story of our zip code became the story of the whole country because the government took care of wall street, took care of the biggest banks, it failed to take care of everybody else. Just 10 years later we had yet another crisis where cleveland is a bash harbinger of whats happening across the country. Propublica illustrated it pretty recently. They covered a big Company Called trancedine that has offices in downtown cleveland. Its gotten plenty of help from taxpayers to get through this pandemic. The company is borrowing money at regard low Interest Rates and collecting yet more tax breaks while at the same time its laying off its workers. 3,000 workers in cleveland are going to lose their jobs during the pandemic while the companys executives keep making money. The ceo of transdine, the chairman made at last count 60 million a year and this is happening all around the country. Government help is readily available for big corporations while Small Businesses struggle to survive and workers are on their own. Millions have lost job at the beginning of august, 6,000 jobs in my state. Workers lost their 600 a week unemployment payment. Because this president and my republican colleagues allowed it to expire. The 600 a week kept more than 12 Million People out of poverty. What are these families to do . How are they going to make rent or their mortgage payment on october 31st . You cant tell them, oh, just go out and get a job. There are no jobs, because the president hasnt controlled the virus. Millions of people are stuck inside their homes, separated from loved ones to stay safe, trying to avoid contracting this disease. Black and brown communities including nativeamerican tribes have been hit the hardest by the pandemic, still dont have equal access to the Federal Reserve lending facilities or ppp loans. We know it would not have been this bad if back in february and march the president of the United States had done his job. We all know that, republicans and democrats alike. We werent shocked by the quotations of the president and the discussion of the president when he talked to the Washington Post reporter. But imagine if the president instead of lying to us, the president treated the American People like adults and leveled with us . Imagine if he wore a mask, the president wore a mask and practiced social distancing . Imagine if he had a real plan to mobilize all of americas vast ingenuity and scale up production of tests and Contact Tracing and protective personal equipment. More Small Businesses would be open. Our children would be back in school safely, almost all of them. Workers would still have their jobs, and tens and tens of thousands of grandparents would still be alive. We know that. But now americans are watching the stock market surge, and then the president and his economic advisors saying the economy is just great. Theyre wondering what great economy theyre talking about. The ohioans i talk to, and anyone who understands economics, know workers are the foundation of our economy. They know all too well what happens when you let wall street run things and ignore main streets across the country. Ohioans have watched for decades as factories closed, investments dried up, storefronts were boarded over and communities that once were thriving. They know what its like to wake up one day and no health care, only jobs in big box chains, no paid sick leave and no power over your schedule. These ohio workers know what its like to be treated as expendable by large corporations, and too often by this government. And remember as ohio goes, so goes the nation. Today americans are waking up and realizing they have a president who thinks much of the country is expendible. And no, not everyone in government feels that way. The chairman of the fed has said over and over we need more access, more money to help families with their rent and mortgage. In short we need the government to actually lead and use our countrys vast resources to avoid a catastrophic recession. In our last hearing in this committee, all the expert witness, the one chosen by the minority, the two chosen by the majority, they all agree to one thing, people need their government to actually step in to support our families, something the Senate Majority has failed to do. Seems the only people that arent getting this message that we need government to step up in a big way for unemployed workers, for emergency rental assistance to reopen our schools safety, the local governments, the postal service, the elections, it seems the only people who arent getting that message are President Trump, secretary mnuchin, sitting in front of us today, and republican senators scattered around the room. Its not as if republicans arent taking action, Mitch Mcconnell moves heaven and earth to do huge favors for big corporations. Look at the tax giveaway. We spend 2 trillion making the richest people in our country richer. Not even close. He promised workers could get a 4,000 raise. None of that helped. It was incredibly unpopular, but mcconnell got all his republican senators, as he always does, to vote for it. Trump wanted it, then mcconnell wants it. Senator mcconnell has made sure trumps corporate judges are improved. Hes bent over backwards for a s more that will gut the Affordable Care act. Almost half the people in my state have preexisting conditions. He always sides with corporations over workers. And now we know hes even willing to reverse his own position to confirm yet another Supreme Court justice. When it comes to doing the bidding of wall street and wealthy Mitch Mcconnell can whip the senate into action. He thinks Everything Else can wait. Most americans cant afford, mr. Chairman, to wait any longer. Were up against a Global Health crisis that will spiral into a Global Economic crisis unless we act now. We face a challenge that requires this government to be at its best to Work Together to do big things. We need an economic rescue package for everyone, to help keep families in their homes, protect workers in their jobs, keep seniors and veterans and students who are at risk, give them help. We need it fast. Democrats are ready to meet this moment. House democrats passed the heroes act five months ago. President trump and Senate Republicans move heaven and earth to help their wealthy friends, when will they do the same for everyone else. We will now move to the testimony of our witnesses. Secretary mnuchin, you may go first. Please proceed. Can you hear me, chairman . Its on now. Chairman, Ranking Member brown, and members of the committee, i am pleased to join you today to discuss the critical steps the department of treasury and the Federal Reserve have taken 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 households. We are fully committed to getting every american back to work as quickly as possible. America is in the midst of the fastest economic recovery from any crisis in u. S. History. The august jobs report showed the economy had gained about 10. 6 million jobs, nearly 50 of the jobs lost due to the pandemic. The Unemployment Rate reduced to 8. 4 , a notable achievement considering some people had expected it as high as 25 . Thanks to the programs provided by the c. A. R. E. S. Act, we never got close to that figure. I believe we will see a strong Third Quarter growth fueled by strong retail sales, housing starts, existing home sales, manufacturing growth, increased business activity. The blue chip survey projection for Third Quarter gdp is 24 . 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 3 unique 13 3 lending facilities. Economic reopenings, combined with the c. A. R. E. S. Act, have enabled a remarkable economic rebound. But some industries, particularly hard hit by the pandemic, do require more relief. The president and i remain committed to providing support for American Workers and business. We continue to work with congress on a bipartisan basis to pass a phase 4 relief package. I believe a targeted package is still needed and the administration is ready to reach a bipartisan agreement. I would also encourage the senate to pass promptly the bipartisan continuing resolution that was passed in the house. Treasury has been working hard to implement the c. A. R. E. S. Act with transparency and accountability. We released a significant amount of information to the public on our website, treasury. Gov and usaspending. Gov. We have released more information than is required by the statute. The Federal Reserve has also posted more information on its website regarding the lending facilities. We have provided regular updates to congress, this marking my seventh appearance before congress for c. A. R. E. S. Act hearings. Additionally were cooperating with various oversight bodies including the new Inspector General, the treasury Inspector General, the treasury Inspector General for tax, the Oversight Commission and gao. We appreciate Congress Interest in these issues and the devoted significant resources to inquiries. We remain committed to working with you to accommodate Congress Legislative needs and the whole government approach to defeat covid19. Id like to thank the members of this committee for working with us to provide critical economic support to the American People. Thank you. Thank you, mr. Secretary. Chairman powell. Thank you. Thank you for the opportunity to update you on our ongoing measures to address the hardship wrought by the pandemic. The Federal Reserve along with others across government is working to alleviate the economic fall out. We remain committed to using our tools to do what we can for as long as it takes to ensure the recovery will be as strong as possible and to limit lasting damage to the economy. Economic activity has picked up from its depressed Second Quarter level when much of the economy was shutdown to stem the spread of the virus. Many Economic Indicators show marked improvement. Household spending looks to have recovered about three quarters of its earlier decline likely owing in part to federal stimulus payments and expanded unemployment benefits. The housing sector has rebounded, and business fixed investment show signs of improvement. In the labor market roughly half of the 22 million payroll jobs lost in march and april have been regained as people returned to work. Both employment and Overall Economic activity, however, remain well below their prepandemic level and the path ahead continues to be highly uncertain. The downturn has not fallen on all americans. The rise in joblessness has been especially severe for lower wage workers, for women and for africanamericans and hispanics. This reversal of economic fortune has up ended many lives and created great uncertainty about the future. A full recovery is likely to come only when people are confident trz safe to reengage in a broad range of activities. The path forward will depend on keeping the virus under control and on policy actions taken at all levels of government. Since midmarch we have taken forceful action implementing a policy of near zero rates, increasing Asset Holdings and standing up 13 emergency lending facilities. We took these measures to support broader financial conditions, and more directly to support the flow of credit to households, businesses of all sizes and state and local governments. Our actions taken together have helped unlock more than a trillion dollars of funding, which in turn has helped keep organizations from shuttering, putting them in a better position to keep workers on and hire them back as the economy continues to recover. The main Street Lending program has been of Significant Interest to this committee and the public. Many of the businesses affected by the pandemic are smaller firms that rely on banks for loans rather than public credit markets. Main street is designed to facilitate the flow of credit to small and mediumsized businesses. In establishing the facility, we conducted extensive outreach, soliciting Public Comment and holding indepth discussions with lenders and borrowers of all sizes. In response to feedback, weve continued to make adjustments to maple street to provide greater support to small and mediumsized businesses and to nonprofit organizations such as educational institutions, hospitals and social service organizations. Nearly 600 banks representing well more than half of the assets in the Banking System have either completed registration or are in the process of doing so. About 230 loans totalling 250 billion are either funded or in the pipeline. Main street is intended for businesses that were on a sound footing prepandemic that have good longerterm prospects but have encountered temporary cash flow problems due to the pandemic and are not able to get credit on reasonable terms as a result. Main street mommies may not be the right solution for some businesses in part because the c. A. R. E. S. Act states that these loans cannot be forgiven. Our Credit Facilities have improved Lending Conditions broadly including for potential main street borrowers. Most small and mediumsized business can get loans from private sector financial institutions. Many of our programs rely on emergency lending that require only unusual circumstances. By serving as a backstop to key credit markets, our programs have significantly increased extension of credit to private lenders. However, facilities are only that, a backstop. They are designed to support the functioning of private markets, not to replace them. Moreover, these are lending not spending powers. Many borrower will benefit from these programs, but for others a loan that could be difficult to repay might not be the answer. In these cases direct fiscal support may be needed. Our economy will recover fully from this difficult period. We remain committed to using our full range of tools to support the economy for as long as needed. Thank you. Thank you, chairman powell. For my first question, id like you to keep your answers to this as brief as you possibly can because i want to get onto a few others, but i want to talk about the need for additional relief in terms of further Coronavirus Relief legislation. I think both of you have said that what weve done so far has been very helpful as having the results that you talked about, but some more is needed. And i believe both of you have said that we need to in this next legislation be more targeted. Is that correct . That is correct. Chairman powell, correct . Yes. I would defer to the secretary and you on the actual contents of the legislation. Sure. And i understand that. Theres clearly a big gap between the house and Senate Negotiations and the positions on the next covid19 relief. That being said, there is also a very significant amount of agreement in specific areas where i believe if we were to pick up those specific areas where we do have relief and pass those, then we could have a significant positive impact. And id just like to ask each of you to comment on whether you believe and i realize you have a hard time, mr. Chairman, talking about what congress should do. But would it be beneficial to our relief efforts if we were able to pass at least the agreements that we have already reached . If we could take those targeted areas where we do have agreement in congress and move forward on them . I believe there is significant bipartisan support for legislation that supports kids and jobs. Particularly for extending the ppp to those hardest hit industries that need a second payment. And yes, i think that would be very meaningful for the economy broadly and for those most impacted as a result of covid. Thank you. You want to say anything, mr. Chairman, on that . I just would briefly add that i do think its likely that additional fiscal support will be needed. And i think these are great areas to be looking at. And in terms of targeting how we approach this, on july 31st i sent both of you a letter regarding expanding the main Street Lending facility to allow for Asset Based Lending and for commercial real estate facility. Yesterday i met with the restaurant many of the Restaurant Owners from idaho. There is a bill, as youre probably aware, to establish targeted legislation to deal with our restaurant industry. Youve both responded to me there is some difficulty putting together the kind of relief for asset lending and for the commercial real estate markets. Could both of you expand quickly . Weve got a minute left for each of you on my time. As to what the difficulties are there and how we may proceed to targeted areas . Mr. Chairman, i think as it relates to commercial real estate the kmarman and i have spent a lot of time on this. There are structural issues because in many cases these loans are in commercial backed securities that have prepayment penalties and dont allow for additional funding behind them. But we continue to look at solutions. I would just say as it relates to the restaurant and broader hospitality industries, we think those industries dont need more debt, what they need is Economic Relief because theyre shutdown as a result of covid. So that would be more of a forgivable loan or grant program. More ppp money. Again, targeted to businesses that have decreased revenues would be very important to saving jobs. And would you both agree that the ppp Program Needs to be made even more flexible . I think the good news is theres strong bipartisan support around both flexibility on ppp but also additional funds that are highly targeted. All right. Chairman powell, you want to add anything to that . Not right now. All right. Let me conclude by saying i agree with the need to move forward. I think the comments youve made halt the fact that there is a you are the one who is negotiating in most of the arenas here, secretary mnuchin. You were probably surprised to hear the attack today that you arent negotiating, that we arent negotiating, but the fact is, there is broad bipartisan support for many major efforts that need to still be taken and i believe that your testimony highlights the fact that that is something we ought to be able to get Going Forward on. We ought to do what we can Reach Agreement on and get it done soon. With that, senator brown . Thank you, mr. Chairman, secretary mnuchin. President trump said with regard to the coronavirus, quote, i think we did a great job. Do you agree with that . Do you think the president has done a great job with the coronavirus . I do. I think weve made tremendous progress on testing. We just committed to 150 million im sorry to cut you off. I just hope that you and the president dont dislocate your shoulders by patting yourself on the back saying good job. We are 4 of the worlds population, 22 of the worlds deaths. You bragged about the economy growing so fast, your words, our Unemployment Rate is significantly higher than germany, significantly higher than france, twice what taiwans is, almost three times what south korea and japans is, much higher than australia, twice what britains rate is. Twice what new zealands rate is. I mean, inyou think the economy is doing well but if youre talking to your wealthy friends on wall street, but things are pretty bad for most working americans and going to get worse unless you come up with a real package. Let me talk about the package you just discussed. Senate republicans as you know offered a paltry some called emaciated piece meal coronavirus bill. You and the president said you wanted a bigger number than the 500 billion which republicans offered, so if you want a bigger deal, they came up with something so small, which republicans are opposed to going higher . Mr. Secretary . Let me clarify. I am not bragging about the economy. What i said is weve made a major recovery from a shutdown but we have more work to do and thats why the president and i want more support. I probably have spoken to Speaker Pelosi 15 or 20 times in the last few days on the cr and weve agreed to continue to have discussions about the cares act. I would encourage like we had bipartisan support in this senate 960 and 1000 we are very proud and i specifically worked with you on many pieces of the legislation. I want to go back. The senate offered a paltry 500 billion plan. Economists all over the country wanted three and four and five times that amount. You and the president said you want something larger so why the president of the United States typically sorry for the cliche when he says jump Mitch Mcconnell and republicans typically say how high. The president said he wants something bigger. You said you want something bigger. What is the hold up . Look at the tax cut. Trillion and a half, way more than a trillion dollar tax cut and 70 went to the richest people of the country. That is what you wanted, that is what your cabinet wanted, that is what your president wanted. You got all the Senate Republicans to go along with that though it blew a hole in the federal budget. You knew that. Why cant you get Senate Republicans to go along on a bigger number than the 500 billion package . What gives here, mr. Secretary . Again, i would just emphasize i think you know this but this requires 60 votes in the senate and i would encourage the democrats in the senate to work with us. I think there are areas of support. Lets pass things we agree on quickly and we can always come back and do more. So it is less of the issue of what the absolute number is and im sure you and i agree on that there are areas that need to be passed. Mr. Secretary, i know youll say pass something minimalist that doesnt, mostly affects wall street and doesnt much affect workers and then well come back. Considering senator mcconnell for four months after the house passed a bill that would matter for schools, for local governments, for unemployed workers, for the postal service, for people who might be evicted, senator mcconnell said there is no sense of urgency and in all of his fine republican colleagues went along with it. You know that. And you went along with it. Let me ask it a different way. Millions of people lost their jobs. Another 800,000 workers filed for unemployment this week. The 600 Unemployment Insurance came every week. It kept literally studies show 12 Million People out of poverty. That is 600 a week. That evaporated in early august. You know that. It evaporated because the Senate Republicans refused to act. The house had done it. The Senate House Republicans refused to act. Workers obviously cant get a loan or grant through any facilities and i appreciate the work the chair of the Federal Reserve has done but those people who lost their 600 that could face foreclosure, what do you suggest they do . What do you suggest those people who lost their 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 . What are they to do, mr. Secretary . I think as you know because that expired the president was forced to move forward with z executive action so we are still providing those people. You are providing i would encourage the democrats and the republicans to sit down together. There is an agreement on extended unemployment. Im sorry. My time is expired. The president wasnt forced to do that. 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 act like the president was forced to do something. You simply didnt step up for these workers. 600 a week. 600,000 people in my state lost their Unemployment Insurance. And you essentially you and senator mcconnell and the president are saying to those 600,000 ohioans sorry youre on your own. That is a gross misstatement and exaggeration. If the democrats are willing to sit down im willing to sit down any time for Bipartisan Legislation in the senate. Lets pass something quickly. If i could just add you could get 47 democratic votes for 600 a week this afternoon if you are willing to do it for every one of those workers. We all know what that means in our states and wed all vote for it. Bring it forward. Before we go to senator shelby i would just add as the secretary was saying this is one of the areas i was talking about in my questions. We have the ability to move forward on this if we have a willingness to move forward on pieces of this plan that we have agreement on. Senator shelby. Thank you, mr. Chairman. First of all, i want to, i believe i can change hopefully the tone and the substance of where we are today. Mr. Secretary and chairman powell, i want to tell you i want to commend you for what youve done, the leadership under difficult, difficult circumstances. And what you want to do and your candor with this committee about a lot of things. Mr. Secretary, my first observation is youve talked about this and thats the economy. Were all interested in it. Weve seen the jobs unemployment number drop and unemployment go up. In my state of alabama for example we were in double digits and now were at about 5 . Wed like to go to about 3 or 4 . We know it takes a while to do this. It takes years sometimes. But we have made a lot of recovery. Thanks to a lot of the leadership that you two working together with the financial situations we face. Chairman powell, you are not only the, you know, run the monetary system, you are the regulator of our largest banks. Tell us here today, i ask you this i believe in february here, what are the what is the basic conditions of our Banking System from your perspective and how does this change and contrast with 2008 . Id say it is completely different and a much better 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. Our banks so far have really been a source of strength. Theyve been able to absorb deposits. Considering all of the problems were facing right now theyve shown resilience, have they not . They have. Now, of course it is early days. We cant be declaring victory but so far they have been a source of strength. Youve talked about different views from the fed as far as deflation, inflation, and basically saying we need a little inflation and we do when were trying to deal with recovery. What is your outlook on that . Because we deal with price stability, were dealing with the job market, everything that goes with it. So of course for many years the problem was too high inflation. We both remember that very well those days and it was very important for the fed to get high inflation under control. We did. Todays challenge is a little bit different. There are disinflationary pressures widely around the world and you see in europe and in japan for example extremely low Interest Rates, very low inflation, and the central bank because rates are so low and inflation is so low the central bank really doesnt have as much fire power as it would like to respond. So we just want inflation to be 2 on average not much higher. Just 2 on average. Thats what we want. That will give us the ability to have significant ability to cut rates when the economy turns down. Mr. Secretary, we made great strides. You talked about it. I dont think you were bragging. Youre just stating whats happening here which we all know. The data is there and you have to face and play with it and face it and youre doing a good job there. How do we move to the next step . Because i believe were on the threshold maybe of a robust and sustained economic recovery. That maybe we havent seen. People are saving money. Theyre staying home. Retail sales are down but people ultimately are going to get out and buy and push this economy i think. What is your belief on all that . I think the progress well make over the next few months on testing and vaccines will create tremendous encouragement for people to feel confidence. Confidence. By the way i want to personally thank you for your work on the c. R. Thank you. Youve been instrumental. We worked with you. We want to keep the government going at whatever cost. I think its important. You do, too. Thank you. I would support more targeted relief for particularly Small Businesses who through no fault of their own have been shut down or have government or state restrictions because of covid. I think we should act quickly because they need the support now. They dont need the support next year. Thank you. Thank you both for your service. Thank you, senator. Senator reid. Thank you, mr. Chairman. Welcome, mr. Secretary. Welcome, chairman, for your presence here today. Chairman powell, youve indicated that we cant succeed economically until we defeat the disease and youve stressed the need for social distancing, Wearing Masks, etcetera. Could you elaborate on the economic effects of Wearing Masks and doing things that are in Public Health . Yes id be glad to. So Everyone Wants to i think unanimously wants to reopen the economy and get back to full employment as quickly as possible. But doing that is going to go hand in hand with doing things like Wearing Masks and keeping social distancing and that sort of thing. Thats what will help keep the spread of the disease in check and thats what enable more and more parts of the economy to reopen. Im thinking particularly of parts of the economy where theres close personal contact. So its very important, in fact, doing those things is very much aligned with a fast reopening, as fast as sustainable. I find it interesting that your comments are almost identical to the head of the cdc, centers for disease control, and yet they are not being accorded any weight at all by the president. He effectively is rejecting both medical advice and economic advice. I think that is a phenomenon that continuing to see us ineffective in dealing with the disease. I hope it changes. You also indicated that there are Downside Risks particularly outside of wall street on main street. Situations where Small Businesses and their customers, mom and pop landlords, state and local governments. Can you elaborate on the consequences of the continuing to fail to provide real support for these entities through a stimulus package . Yes. Let me say i think the cares act provided great support and should get a lot of the credit for the recovery so far which has been faster and stronger than most forecasters anticipated, certainly faster and stronger than i anticipated. The risk Going Forward is that people now are spending because they have they got money in the bank even though theyre unemployed. They may have saved part of the checks they got or the Unemployment Insurance. The risk is that theyll go through that money ultimately and have to cut back on spending and maybe lose their home or lose their lease and so that is the down side risk of no further action. We dont see much of that yet but it could well be out there in the not too distant future. Well, with respect to rentals and mortgages we know there is a tsunami brewing because through federal and local legislation has been a ban on evictions and foreclosure but that ban will end one day and itll come. Unless we move in dramatically now and provide resources to help. One of the key actors in the whole process is state and local governments. In the package we provided resources. I think they could be used more liberally. The secretary could by rule expand access and flexibility, indeed, including a taking care of lost revenue. The facilities the Federal Reserve has used are sort of stopgap measures and havent worked out well, for example municipal facilities for example dont recognize that most states require legislative approval of a bond issue and indeed mu municipalities have to go to voters to get approval. That is very difficult. With respect to the nonprofit functions asking for significant revenues versus other aspects. It makes it difficult. Can you comment on it seems almost destined not to work. We need direct grants to the states and localities. These loans cannot replace direct grants at all. They are to provide liquidity and state and local governments are not allowed to borrow to fund deficits. Whats happened is since we announced our facility borrowing among state and local governments has been at record levels and the rates that theyve been borrowing at have been record low levels and that goes right across the yield curve and right across the rating spectrum. I would say that the Municipal Market is now working pretty well and has accomplished what we can accomplish as a liquidity provider. We cant do transfers and that is why our facility is structured the way it is. Just a final point. It seems that your tests of their assets and liquidity, which if they had those they wouldnt be borrowing from you. I think again this is not the right approach and there is a lot of money involved but it isnt going to get to state and local governments. As you just said they need the grants. Thank you. If i can just say in the municipal facility we go by the ratings not any particular financial requirements. We have a transparent set of requirements and that is what dictates access. Thank you. Thanks very much, mr. Chairman and mr. Secretary, and mr. Chairman thanks for joining us. Just as a quick followup i think it is important to keep some context in mind when we talk about direct grants to state and local governments, moodys analytics estimated that the grand total of lost revenue and additional expenses incurred by states and municipalities will end up between 250 billion and 600 billion the latter only likely to occur if there is a very severe further outbreak of the coronavirus this fall. We sent 500 billion to state and local governments with the last bill. Probable, quite possibly already covering the full amount of the lost revenue and added expenses. Why we would be talking about sending still more at this point is not clear to me. I want to return our focus to the 13 three facilities themselves. I hear a lot of criticism about these facilities that seems to reflect a view that if the facilities havent been drawn down to a great degree then therefore that is evidence they have failed. I really think we need to remember what the purpose was in the first place. The whole purpose behind setting up these facilities and making them available was to allow private markets to function again. Back in march we had frozen Capital Markets, inability to access credit. We had the risk of a very frightening and very, very damaging catastrophe because credit wasnt able to flow. What these programs were meant to do in my view is get private markets functioning again. They were not meant to replace the private market or systematically bail out companies or at all. They werent meant to be a substitute for fiscal policy or subsidies for business and municipality but to stabilize markets and make sure credit worthy borrowers corporate or municipal would be able to access credit. When you look at what has happened since then certainly whether youre looking at Macro Economic data which as the treasury secretary pointed out and the chairman also has come back faster and more robustly than most of us thought it would. But even more importantly when i look at the private Capital Markets, theyre functioning. In fact, theyre functioning at record levels. Record levels of volume of issuance both in the Corporate Market and in the municipal, nearly record low Interest Rates, and so i think the rational conclusion to come from here is this has been remarkably successful. There are some sectors especially some narrow categories where weve still got some problems. Asset backed lending weve talked about. I would like to ask the treasury secretary and chairman of the fed both to just comment if you would on the availability of credit for credit worthy borrowers. What are the Capital Markets like, the lending markets like . Are credit worthy borrowers in america able to access credit . I would agree with exactly what you said and remind people the chair an executed the first two facilities even before the cares act was passed when the markets were literally shut down. These are emergency facilities not intended to be subsidies and the best success is us not having to use them. So in many cases the mere announcement and commitments unlocked the markets as ive said in the past. Companies like boeing were able to borrow 25 billion in the private markets and not have to come to the government. Many of the Large Airlines turned down the loans. So i think theyve been enormously successful and in the areas where they have not worked it is primarily entities that really need subsidies and not just a lack of financing. I agree with all of that. We havent made a single loan to a corporate directly and Something Like a trillion dollars in financing has happened. So clearly for corporates the Financial Market is working. The same is also true. I think it is 250 billion in issuance among the municipals including some of those that accessed our facility have also been able to access the public market. So the Public Markets are out there and working and i think those two, the market based facilities and earlier ones precares act have all done their jobs well. Thank you, mr. Chairman. Thank you. This is a very important clarification and appreciated. Senator menendez. If senator menendez is not available, senator tester. Thank you, mr. Chairman. I want to thank secretary mnuchin and chairman powell for being here today. This question is for you, secretary mnuchin. The chairman referred to this a couple weeks ago when we heard from three witnesses with daring views and what needs to be done to move forward but they were all in agreement that what is happening now is insufficient. The 500 billion treasury slush fund this has already been pointed out. The workers and families are those who need the most assistance. Ppp is long gone. Many Small Business employees continue to struggle. Theres been help for airlines which i agree with but what the about the restaurants, gyms, seasonal businesses, and others who are bearing the brunt of this crisis . The health and economic crisis is still there. These folks still need our help. I see a lot of big names and those businesses may need some support but the only montana lenders able to use the facilities are for ppp no, i repeat no montana businesses have benefited from the program. My question to you, secretary mnuchin, is what are you doing to help the real main street businesses that are in distress . If this was a treasury slush fund i could use however i want i would reallocate it to help those businesses immediately but unfortunately i need Congressional Authority. I have encouraged congress that wed be willing to give back 2 200 billion of unspent money to be repropose rated. Theres also 130 billion of unspent money in the ppp. I would encourage that we Work Together in a bipartisan basis to specifically help the types of Small Businesses you are referring to. Have you asked for Congressional Authority to move that money to main street businesses . Ive asked for Congressional Authority to reallocate that. That is in the most recent proposed legislation. Ive also repeatedly asked for the ppp to be reauthorized so we could use the 130 billion that is sitting there. That will help main street businesses. Once again and i say this for the senators on this call, look, we had a proposal by senator mcconnell a week ago that had poison pills in it to privatize education, and to put impedements on our legal system. My god, why this cant be brought to the flore or the Congressional Authority at a minimum makes no sense to me and i will tell you democrats are not holding that up. Chairman powell, i have been told that the reason the stock market looks so good is because the fed has been buying a lot of bad debt. Could you enlighten me on what kind of bad debt youre buying and how much money the fed has put out to buy bad debt . Well, that must be a reference to the secondary market Corporate Credit fund which i think has bought, its in the range of 10 billion in total. We have bought no debt from any Large Companies in the primary Corporate Credit fund, which was the main facility. So of those of that 10 billion weve bought in the second tri market, almost all of that will be investment grade. I think weve bought very, very little noninvestment grade debt. We have bought some and we bought it in the form of etfs as well as in regular bonds. But it, in terms of the broader Financial Markets, it would be a drop in the ocean. So you dont agree with that statement that that is why the stock market is performing as well as it i dont agree with the premise that weve bought a lot of socalled bad debt. I dont want to comment on the level of the stock market directly or indirectly but it just isnt the case that weve bought a lot of socalled bad debt. We havent. Okay. Secretary mnuchin after the first cares act oversight hearing i submitted questions to you and chairman powell and while i received answers from the chairman i finally received yours last night. They were inadequate to put it gently. So youre here. Ill give you another opportunity. What measures has the treasury put in place to prevent another travel coronavirus data breach from occurring . Im sorry. Could you repeat that . I had a hard time. Im sorry. What measures has the treasury put in place to prevent another tribal Coronavirus Relief data breach from occurring again . Im sorry. I could not hear. Something about a data breach. I apologize. What was the question . Holy shit i thought we had Better Technology than this. What measures has the treasury put in place to prevent another tribal Coronavirus Relief data breach from occurring again . Im going to have to look into that. Im not familiar with the tribal data breach that youre referring to but i will get back to you quickly. Well, well remind your staff. Thank you very much. Thank you mr. Chairman. Thank you. Senator scott . Are you with us . Okay. Ill start with a question for chairman powell. On 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 hcs that serve the middle market. Senator cinema and i introduced legislation late last week. I am optimistic the senate will act on this legislation soon. However, i do not believe congressional action should be necessary given you have the authority to resolve this issue immediately. What are your plans to level the Playing Field in your facilities for nonincumbent nrsros . We actually have broadened the circle of those who included to include those who have a fairly broad business, those whom the Capital Markets rely on in particular areas, so weve done that. We started off with three nsros and now i think were at six. We could look at we could come back to you on that. We could look at broadening that. Its not something we looked at recently. That would be helpful, sir. I appreciate you getting back with me. Secretary mnuchin i thank you for your hard work on the 14 three facilities. I think we need to create more flexibility where we see more folks having access to those resources that would be helpful. Next question, as you both know, ive been fairly outspoken on this kmutcommittee about the gof Building Access to credit and creating Economic Opportunity for minority businesses and given my passion on this issue it is especially tough to witness the seismic impact this pandemic has had on black owned businesses. When i see reports like the one released last month by the u. S. Claim ber of commerce which found that 66 of minority businesses are concerned about having to permanently close their doors. And 13 of minority owned businesses that have applied for a loan to help survive the economic downturn have failed to secure funding. I am really shocked at how dire these statistics are. Couple that with the ceo of wells fargo Charlie Sharps recent comments that he cant find talented, black individuals to be employed at wells fargo. I perhaps better understand the plight of so many minority owned businesses if the ceo of wells fargo believes that he cant find enough talent. That is stunning. And if he needs any help, please have him guff ive me a call. It is imperative our most vulnerable and under served communities are not left out of the economic recovery by making sure those businesses can have access to the full benefits of the cares Emergency Assistance program that it sought to provide. Can you, chairman powell, describe some of the actions the fed has taken to address the disproportionate impact this pandemic has had on black owned businesses and minority businesses as well . Sure. Let me agree this is very troubling. More heavily the pandemic is falling on minority and other groups. So we have done quite a lot of outreach to minority depository institutions, mdis and tried to pull them in and make sure theyre taking part in the ppp liquidity facility and eligible to lend into main street. Weve done the same thing with the Community Development financial institutions. And again, weve held webinars. Weve had lots and lots of outreach to make sure they are included in the program. In terms of the loans were making, our loans are broadly available to everyone who qualifies. But these are loans main street is for, you know, somewhat larger companies. Mid sized businesses and larger. I think thats larger than a lot of minority businesses and i do think ppp is also an excellent solution there. I do think, chair powell and secretary mnuchin would agree with this that the utilization of the mbbas to help market smaller businesses under 300 or 500 employees to the ppp using mbdas has been an effective strategy. There are few not many but few small, minority businesses that qu qualify for the main Street Lending program. I would certainly love to see more success in figuring out how to connect the dots and i would imagine that if im discouraged by the comments of the wells fargo ceo that many entrepreneurs and Small Businesses, minority businesses see the entire financial industry with a bit of a raised eyebrow on the access to that when you see that 13 of those Small Businesses were unable to get the credit necessary even though we are the guarantor of those loans that become grants. Thank you very much. Thank you, senator menendez. Thank you, mr. Chairman. Thank you to both of our witnesses and secretary mnuchin i just want to say i appreciate your responsiveness. I dont know necessarily i like what i hear but i appreciate your responsiveness and in this business no one ever says that, so thank you for whenever weve called you youve been very responsive. So, chairman powell, secretary mnuchin, is it a good idea for states to raise taxes and send hundreds of thousands of essential Public Workers off the front lines and to the unemployment lines during a pandemic and a recession . No, its not a good idea. Chairman powell . I would agree. Not a good idea. So you both agree despite facing an historic 3 trillion deficit this year as well fiscal austerity is bad Economic Policy which would cause additional pain during this recession. Is that a fair statement . I think we have to be careful but i am supportive of additional fiscal measures as ive noted earlier. I just would add i think there is a time coming when were going to need to get back on a sustainable fiscal path but i wouldnt prioritize that in the very near term when we are still in the middle of the pandemic. And i agree. Thats my point. Its while were in the midst of a pandemic. I would just note that moodies once again the latest calculus shows that states and local governments are still somewhere in the 500 billion area of need. And like the federal government our local communities are facing skyrocketing costs and declining revenues due to the pandemic but unlike the federal government they cant borrow money to get through the crisis. Instead they are being forced to do the unthinkable, layoff hundreds of thousands of teachers, nurses, firefighters, and other essential workers at a time when we need them the most. There is bipartisan support to avoid such a disaster. The 500 billion included in the smart act which i authored and introduced with three republicans and three democrats back in may mirrors the bipartisan house bill that exists and even President Trump said he supports and i quote, Something Like the 1. 5 trillion bipartisan proposal. So, mr. Secretary, as lead negotiator for the white house, are you optimistic about getting Senate Republicans to support President Trumps call for a much larger stimulus package that includes state and local funding . Well, the president has expressed flexibility to give more money to state and local governments. Also flexibility for the money weve already sent. As i said before, i look forward to sitting down with both democrats and republicans to see if we can agree on bipartisan support that is very necessary across the economy targeted. I appreciate that. I think that your bigger challenge is going to be with those in the Republican Caucus of which senator mcconnell, himself, has said theres about 20 members of his caucus who dont want to vote for anything more. And i think there isnt any economist i have seen that suggests that not doing anything more in the midst of this pandemic is going to meet the challenges of families, Small Businesses, and getting us back in shape. Secretary mnuchin, in june chairman powell issued a statement on racial equality that said, quote, everyone deserves the opportunity to participate fully in our society and in our economy. These principles guide us in all that we do from Monetary Policy to our work to ensure fair access to credit across the country. And on tuesday before the House Financial Services committee he stated, quote, the rise in joblessness has been especially severe for lower wage workers, for women, and for africanamericans and hispanics. Mr. Secretary, would you agree with those statements . I would. So ive heard from a number of minority owned businesses and i know in a previous answer there was a suggestion that ppp well, there are minority owned businesses in the 500 plus category. For example, in our nation hispanic broadcasting which serves an essential, an essential need in informing a large part of American Society would be in that middle market. Theyre just some. I think we have an opportunity right now to demonstrate our commitment to serving minority communities in your implementation of the main stream program. So, mr. Secretary, could you commit to reviewing the terms of the main Street Program to identify what changes could strengthen minority owned business participation and share that analysis with me . I will. Let me just say i know senator werner has been working on and ive spoken to senator crepo and senator scott and others about reallocating some of our money and committing 10 billion to cdfis that could be leveraged to 100 billion of immediate lending into those communities that are especially hard hit. So i would encourage this committee to continue to look at that proposal. Thank you, mr. Chairman. Thank you. Senator sass . Thank you, chairman. Thanks to both of you for being here. Chairman and secretary. Secretary mnuchin, when im home in nebraska every weekend the most common question im getting in this space is about the ppp forgiveness simplification issue for loans under 150,000 and im curious as to whether or not you see a simplified forgiveness form coming and given that we a are approaching the sixmonth deadline what should Small Businesses do if we dont have certainty on that answer yet . We did create an easy form. I know there is bipartisan support for going much further which we think we need legislation for. And we would support if there is legislation to have loans under 150,000 have a presumption but allow for us to audit them as needed. I know that is something thats been discussed. Thanks. Do you have any views on any of the specific proposals on, a, where your Regulatory Authority ends and where you need legislation but then on the specific legislative proposals . We need additional legislation to simplify it beyond what weve done but would want to maintain as i said fraud protection. I completely agree with you on the fraud protection. So is it your view though that Small Businesses, given what you know about where we are in the negotiation and all the hard work youve been doing in that space as we get under six months from deadline, would you recommend the businesses that took 145,000, you think they should fill out the current, whats called medium length form . Your easy form but not really the simplified yet . Yeah. I would. I would encourage them. The portal is open. I would encourage them to move quickly and fill that out and not wait for legislation but if we can get legislation to help them that would be great. Thanks. Id be interested in both of your views on the implications for the real estate markets of the transition to home, remote work that weve seen over the last six months. Chairman powell, maybe if youd start im interested in both housing and the commercial real estate markets. There are clearly going to be significant implications. We dont know how long theyll last but for now, you know, the prices of hoechls in the suburbs and second homes have gone up and if you own an apartment in downtowns of a lot of cities right now probably the value has gone down. It is going to be hard to say. Well probably some of this will be sustained. People will work from home more. Its hard to say though if we think ten years ahead will it be different than it would have been otherwise . Maybe at the margin. It is something well be watching carefully. Secretary mnuchin . I think there is no question on the commercial real estate markets particularly in the big cities. There is going to be an impact and perhaps the only good thing thats come out of this is that many businesses and us in government have figured out that we can actually part of the economy sometimes can work effectively remotely. So i think partial remote work is here to stay. Thank you. I was in a conversation with fortune 500 ceo and an entity with a lot of commercial real estate property, maybe six weeks ago, and he was saying that during the height of covid time, precovid they had 70 any given day. Youd have some people sick, some people on personal leave, some people on work travel or some people who might have been on vacation or sick or Remote Working but when they came back post, being at o occupancy post covid they came back and started at about 29 and then the experience they had is so many of their folks that were in their commercial real estate spaces were still having to zoom and engage telefby telephone in remote situation that they dont see themselves getting back to anything like the density potentially ever. I appreciate your point, chairman powell, that we cant see into a five or tenyear crystal ball but i think it is important for us to keep conversing article one and article two as youre learning about this that you would keep our committee here giving our housing purview in this domain as well. The chairman had to step out. I was supposed to call on someone. But he has returned. Thank you, senator sasse and the next is senator werner. Thank you. I again want to welcome our witnesses. I want to step back for one moment and weve got differences but i want to commend chair powell, secretary mnuchin, and frankly members of this committee. I think we rose to the occasion back with the first couple cares acts. We made historic investments. I think history will treat us well. I appreciate the no Ranking Member and the chairman and i and others were in several sessions with the secretary with the approach we took. I think we desperately need to get back to that approach. Ive never seen a bigger disconnect between the stock market and the real economy than right now. I also want to echo what senator scott and senator menendez have said and want to thank them for being part of this jobs in neighborhood assistance act the secretary referenced. I want to thank the chair and Ranking Member as well for their willingness to work on this legislation. This would take billions of unallocated funds from the cares act and directly invest into mdis and cdfis which the secretary explained would dramatically leverage those dollars and help minority businesses that as senator scott has so accurately pointed out have been disproportionately hurt. Black owned businesses shut down and we can and must do better and chair powell i know weve gone back and forth on this i would argue, i know you said erl whier in the week in your testimony that you were concerned about main street going smaller below 250 and the feds capacity to deal literally with hundreds of thousands if not millions of loans. I would argue the way to deal with that or at least one tool to deal with that would be the direct equity infusion into those mdis and cdfis thats goal and purpose is to end to these smaller institutions. You wouldnt have to necessarily grapple with all the individual loans but you could make these kind of i think investment and fed support programs for these institutions that service that community. I again just really am very hopeful that well come to an agreement and make that additional covid relief package. I do want to get to a question but i want to the question ail start with for chair powell is, you know, two predecessors, a series of both liberal and conservative economists came forward, said we need to make substantial Stimulus Investment that is in the trillions of dollars. I echo my democratic colleagues that when the majority leader put forward a plan that was onethird of the size of what even the Trump Administration suggested that that was not a good faith effort. I would strongly urge all of my colleagues that we ought to not break. We ought to get another covid package out. It is essential. People in my state are hurting. I agree with senator sasse we need to give the secretary the presumption on those loans, 150,000 and under, that they can be presumed to be grants and really make that form shorter. Secretary powell, can you address again this issue that we desperately need this larger relief and that targeted relief does not mean small . It just means we need to target those most affected. Sure. Ill leave the details. It is not appropriate for me to express a view on the particular details of that but i would say that the recovery weve had so far owes in significant degree to the cares act and the support congress provided in conjunction with the administration and i think while the economy has been doing better than expected i think there is down side risk to that if there is no further fiscal support. The people who are theres still Something Like 11 Million People whose payroll jobs have not theyve not gotten their jobs back. Those people are able to spend now because of the checks they got and because of the Unemployment Insurance they got, the enhanced Unemployment Insurance. There is down side risk to the economy probably coming if some form of that support doesnt continue. Im down to 35 seconds. Id ask both you, chairman powell, and secretary mnuchin, is the risk to the economy long term greater or less if we under shoot versus over shoot . Im asking you to simply say, you know, should we under stimulate or over stimulate when were at this critical point . On the margin recognized. Again i would just say were going to have to. We will come back to a place where we need to get the u. S. Federal government on a sustainable fiscal path but again i wouldnt prioritize that now when were a he in the middle of a pandemic. Secretary mnuchin . What i would say is forget the long term. The issue is now. I would just say some is better than none. So i would encourage again bipartisan support. And again, let me also recognize this committee and the great work they did and chairman crepo if you and the Ranking Member and other members want to sit down id be willing to come here any time to continue to work with you. Thank you. Senator . Probably of people who work in almost any workplace in america the members of this Committee Like the hundred senators of the United States senate have been traveling as much as anyone on airlines going back to may and i think weve all probably had the experience ive had multiple times of Flight Attendants or pilots or agents asking me about the status of negotiations related for additional relief for the airlines. Just this past weekend flying back to washington i had a Flight Attendant literally come up and hug me in my seat because she recognized me. Quickly apologized for violating physical distancing protocol but it is okay because we both had our masks on and it was brief to tell me she had been working for over 20 years with this airline and was afraid shed lose her job in early october and it would be the first time in her life she had gone on unemployment. I told her were still working to do everything we can in washington to avoid that fate because not a Single Person in the Airline Industry or any of its ancillary industries or for that matter in any business in america from the front line workers all the way up to the ceo and the board is responsible for the fate these businesses and industries find themselves in. It is a responsibility for the Chinese Communist party and incompetence animd malignancy covering this up from the very beginning. What is the status of trying to find some relief for the Airline Industry in particular . I know you and the president and others have been meeting with the leaders of the companies as well as the leaders of their employees unions. Id just like to hear what you have to say and im sure those workers would like to hear what you say as well. Thank you. First of all i just want to say the work that was done in the first bill was extraordinary and literally saved the entire industry. I know senator wicker and others have proposed extending more payroll support payments in return for not having layoffs and the president and i do support that approach. Is there anything that you have under existing authorities that either the cares act authorities or prior law that could help the Airlines Avoid these coming layoffs . Unfortunately, there is not. But again, we are encouraged there is a lot of money in the loan program we are not going t. And reallocating that. Thank you. Chairman powell, you just noted theres still 11 million americans who have not gotten back to work. Almost as many who have gotten back to work who lost their jobs at the height of the uncertainty about the pandemic in the spring. Obviously, the airline and related industries are one big one. Could you give us a sense of the other industries and the kinds of businesses in which those 11 million americans who are still out of work are concentrated . Yes. There are big numbers of people still unemployed in the businesses that involve a lot of contact with the public. So its hot hotels, its entertainment, its retail, its restaurants, its bars. All of theaces places where you getting people in groups toge together andt facing them face face. Itt but that sof is a big chunk of the remaining unemployed. Yeah. And i think again elected prob officialsab probably experiencey this as much as anyone in america given the amount of time for travel and time we spend ins hotels or used to spend in publ public venues speaking. Am i for one am very mindful and i know most of our members are ase well about the impact this vird has had on them. The in those industries. O is the single best thing we can do to get a vaccine and get the virus under control, putting ide aside what kind of fiscal or roe monetary relief we may provide just given the nature of the travel and hospitality and tourism and Event Industry is c the vaccine the single best thing we could get . Yes. Long in the long run i think that iso what it is going to take to getk Business Travel back to near he where it was. It okay. For example. Final question, chairman powell. Youve cited a couple times as well as in your written in yo testimony the 13 different programs the Federal Reserve hau stood up. Grams which of those programs in your opinion has performed the best t given its stated objectives . Nk e i think the original ones that dealt withth the funding te markets stopped prettyd quickly what was a budding run on shortc terming wholesale financing mars very early on. Those success seeded. Facilit id also cite the corporate he credit fass ult for opening up a the market without making a at,i single loan. After that i would cite the pplv was very successful in letting small banks makesm their ppp loo and get them off the Balance Sheets so they could make more. Loans. I think the municipal facility h hasat worked in the sense we ha a quarter trillion dollars in is muni issuance which is much higher than last year before thc pandemic and at an attractive rate. I think there is a lotothink of success and also some difficulties. For example main street is muchh harder and much more difficult. Thank you. Thank you. Senator warren . Thank you, mr. Chairman. E the pandemic and the recession it created have hit communities color the hardest. T. And and ive said i before that i l believe we need a policy nowled response that acknowledges thati but it is equally important to recognize that racial inequalitq wasua amplified by the pandemic. It was not created by it. Even during periods of strong no Economic Growth measures of economic well being for brown and black americans has lagged f far behind those for white l, americans. Now, chairman powell, the last time you were before this committee you told me that the persistent, economic gap betweea black and white americans was an unhealthy feature of our econo economy. Is that still your view . Yes, yes, it is, senator. Good. And i agree with you on this. Since it was created in 1913, hs congress has spelled out in laww the mission of the federal rese reserve, to keep unemployment ay low as possible and make sure u that we have a stable financial system. The twin goals ofsys the fed. Now, you have policy tools at r your disposal to accomplish thoe those goals. For example, your decisions gag affect how much a family pays on a mortgage or aor car loan. D your decisions determine how quickly someone gets credit in their bank account after a paycheck is deposited. But as you and i have discussed before black and whitete famili face very different economic realities in this country. Fed that means decisions from the fed affect those families the differently. So the fedtly t recently took an in the rightg direction by makil it clear that fulfilling its mandate means keeping interest o rates low long enough to allow growth to reach all households not just those doing well this already. This is especially important because historically in a time o of crisis black unemployment nd jumps faster and takes longer to go down. The fed shouldnt slow economic stimulus before black workers see real economic gains. This updated statement interpreting your mandate is a good first step. Ed i believe the fed could be doin more. And thats w whyhy i ive introi bill with chair waters and gillibrand to require the fed to use all its tools to close racial economic gaps. Y so, mr. Chairman, when you were here three months ago you said a the fed wouldt be looking for ways to use your economic tools to do more to address racial disparities. I want to follow up. Have have you identified a co comprehensive list of policies the fed can pursue in order to make good on these commitments . What is on your list, mr. Se chairman . The i think you see on our part a heightened focus on economic disparities including racial economic disparities and you see that if you look on our website, on the front page we have all a the things were working on in o that area and it has become a broad set over data and research and things like that. The reason we do that is you go, give us maximum employment as ay goal and maximumme employment wi nown view in our new framework s a broad and inclusive goal which means were not just looking at the aggregates but at differentt democratic groups and differentu measures so i think the things we are doing with the tool to address these issues of es. Disparate economic outcomeses ig think the stronger and far more important tools are not those o the fed. Nonetheless i think we are and should be using our tools to tht extent we can and actually justt close by saying that all of thae has been taking place over a. Current legislative mandate and t i dont think you need to change the law to do this. Were doing it already i appreciate that, mr. At yo chairman, that you are trying to do doing it already. Is i appreciate that, mr. Chairman, that you are trying to do this. But i asked you two things. The first one is, just name a couple of the specific things youre doing. What did you put on your list in the last three months . Okay. I appreciate you say you have given focused attention. Or attention on this. What changes did you make . The first and most important one is the one sorry, the one i mentioned, which was to define our maximum employment goal as a broad and inclusive one. I mentioned that one. What other things . What other things . You know, i would point to the fact that we have been outspoken at the fed on our commitment to diversity and to racial justice. I appreciate that, mr. Chairman. But you know, words arent good enough on this issue. Every Economic Policymaker, including the fed, should be taking steps to confront racial economic disparities head on. And frankly, this cant just be a onetime exercise. I appreciate that you say its important to you, but the fed needs to focus on this issue. During your tenure and during the tenure of all future Federal Reserve chairs. And thats why i have legislation that would require the fed to talk about these gaps as part of its regular reporting to congress. And my legislation would also insure that the fed uses everything in its tool kit to eliminate those racial disparities. You know, there is so much more the fed could be doing. Consider access to credit for black borrowers. When evaluating merger applications, make sure that payments hit Bank Accounts faster. Use the fed Lending Facility to prevent layoffs in state and local government. I get it, the fed cant solve every economic problem on its own. But the fed is not a helpless bystander. Its decisions matter, and they matter most in our vulnerable communities. And its time for the fed to step up on this responsibility. Thank you, mr. Chairman. Thank you. Senator rounds. Thank you, mr. Chairman. Thank you to both of you for joining us today. Despite the challenges that we have faced in standing up the payroll Protection Plan in the first place, south dakotans have been overwhelmingly supportive of the relief that the ppp brought to Small Businesses. Recently, however, i have started to hear concerns from dozens of Business Owners and bankers who have experienced challenges with the ppp forgiveness portal. Senator sasse began this line of questioning and comments, and i want to add some emphasis to it because i think the message that we have received back has been considerably different than just simply having a little bit of time to fill out these forms. And what i would like to do, one lender in particular sent me a note, and hes pretty direct on it, but i would like to share because it kind of points out the frustration that our lenders have in terms of helping these Small Businesses. This is a quote that they sent to me. The forgiveness piece of the ppp is a disaster. I have 750 loans out of 1381 under 20,000. 50 are under 2,000. They have 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 it and says it takes a borrower 15 hours to complete it, and the lender, an additional 75 hours to process. Our borrowers are not happy. Nor are we as bankers. This is not what we signed up for in order to get disaster payments to our customers. We are trying to hold off those borrowers under 150,000 but they are getting anxious. We busted our tails off to get this money out, and were getting absolutely screwed by the process. Lenders feel as though they have really been let down. There is more than a little fatigue. Mr. Chairman, i would like to ask unanimous consent that additional statements that i have received from south dakota bankers expressing frustration with the ppp forgiveness process to also be entered into the record. Without objection. Thank you. Secretary mnuchin, i understand that youre limited in terms of what you can do with regard to forgiveness. But simplification should be something that i think we need to take a second look at. And i would just ask, if you would work with us to see if there isnt a way to find a path forward in the near future, even if we cant get any more legislation out of congress, to find a way to simplify this for both the small borrowers and these lenders who really did go above and beyond to try to get this set up in the first place, and ditd a marvelous job of getting the money out. Thank you, and we will work with you. Again, as i said before, we would support legislation that simplified this. It doesnt cost any money. And we would still retain our right to have the sba audit as appropriate. You know, and mr. Chairman, or mr. Secretary, i agree with you. I think in whatever number we put together or whatever simplified form we put together, the ability to be able to go back and to audit at a date in the future is critical. We dont want to have fraud involved. But it looks to me like theres a huge amount of work out there that were expecting lenders to do that basically theyre not going to get done in a timely fashion, and we will have a problem that well have to address if we dont find a way to resolve this particular issue. Chairman powell did you, mr. Secretary i was just going to say im going to go back and, again, address this with the sba this afternoon. Thank you, mr. Secretary. Chairman powell, i understand the focus in the near term needs to be on getting our economy back to a place where its firing on all cylinders. But can you briefly discuss how youre viewing the evolution of the feds Balance Sheet . Recognizing that this is a different type of a situation than we had back in07,08, and09. We talked a lot back then about what ozonwas on the Balance Sheet and how it would be moving around. Can you share with us briefly the philosophy you would like to follow with regard to the Balance Sheet today . Sure, so the Balance Sheet continues to grow because of our asset purchases. It turns out that the volume of loans that were making under the programs is much less than might have been the case, which isnt to say the facilities havent worked. Just that we havent had to buy a lot. And we are a buy and hold investor, after the financial crisis, we allowed assets to mature and run off on their own. That would be certainly, by the way, were a long way away from that at this point. We wont start doing that until way down the road, but then we will. And the economy will grow, and the size of the Balance Sheet relative to the economy is really the metric, and well be able to get that down over time. But its not something well be focused on in the near term. Thank you. Thank you, mr. Chairman. Senator van hollen. Thank you, mr. Chairman. Ranking member, and i want to thank chairman powell and secretary for being here. I have been listening to the testimony, and mr. Secretary, i understand that both you and the chairman agree that additional fiscal help is needed to help working families and the economy. I also hope we would all agree that we should provide that relief in the most effective way possible for working families. And the Congressional Budget Office just issued a report on september 18th about the impact of the c. A. R. E. S. Act on Economic Impact. Have you had a chance to review that report, the cbo report . I have not yet had a chance, but will do so this afternoon. Thank you. I encourage you to do that. We had a Budget Committee hearing yesterday, and i asked the republican appointed director of the cbo about the provision in the report that indicated that aid to state and local governments was among the most effective tools for helping working families and boosting the economy. So i really encourage you to do that. Youre aware of the fact that during the negotiations over the c. A. R. E. S. Act, the original proposal put forward by senator mcconnell on the floor of thesenate did not include a penny of appropriations for state and local governments, right . Well, it provided money to education, which would have saved state and local governments significant amounts of money. So in essence that was. Mr. Secretary, that goes directly to education departments, which is good, and of course, we increased that at the time, but there was not a penny and subsequently, when this issue came up, senator mcconnell talked about letting states and local governments go bankrupt. And of course, the most recent proposal, he put on the floor of the senate, does not include a penny of money for state and local government, even though the cbo report indicates thats one of the most effective ways. But as i understand your testimony, you agree that additional state and local support would be helpful, right . Yes. We do support some additional aid. Got it. So i would like to ask you about a statement you made on National Television a few weeks ago, on september 6th, and im quoting what you said. You said, i think before we got into covid19, i thought the debt was very manageable. We were having extraordinary growth. We were creating growth that would pay down the debt over time. That was the 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 that we were creating growth that would pay down the debt, he simply said that was untrue. Just the budget did not show that. It was flat out wrong. But i want to focus on the part of your statement where you said that prior to the pandemic we were experiencing, quote, extraordinary growth. Because in 2019, before covid19 hit, Economic Growth was 2. 3 . Is that the, quote, extraordinary growth that you were referring to in that tv interview . We were on track for significant growth, beyond that. And that is correct. All right. Mr. Secretary, you are not on track for significant growth. You have overestimated the growth repeatedly. You know, President Trump has talked about 4 growth. And the reason i ask is that during the second term of the Obama Biden Administration, the economy grew at 2. 4 per year. In fact, slightly higher than the Economic Growth you were talking about just before the pandemic. So by your definition, those four years of the Obama Biden Administration experienced extraordinary growth, is that right . Again, i would be happy to go through my projections with you offline. But we were beyond all of our projections, and again, we had projected 3 over time, which is something that has not been done in years. And we believe the economic mr. Secretary, its simply the difference between projections and reality. And reality is that Economic Growth over, you know, the four years of the Obama Biden Administration was actually slightly higher than Economic Growth in 2019, which you called extraordinary growth. Let me ask you now about President Trumps payroll tax deferral proposal. Where workers dont have their Social Security taxes taken out of their paychecks through the end of the year, but then they owe the money and have to pay it back. As you know, the private sector really wants nothing to do with this. It really is a shell game. But i wrote to you about this along with a number of my colleagues. We sent a bipartisan letter simply asking you this, that with respect to folks in our military and our federal civil servants, that you at least give them the choice as to whether or not to participate. That you dont force folks in the military or federal employees to participate if they dont want to do it. Could you give us a brief answer, mr. Secretary . Could you, and when were going to get an answer to the letter and also what your answer is. I would be happy to follow up with omb, who is responsible to have the agencies. I think thats a reasonable issue, if people dont want to participate, but let me follow up with them. Thank you, mr. Secretary. Senator perdue. Hes not here . Okay. I think im next. Mr. Chairman, can you tell me how much money is left not without leverage, in the main Street Lending program . Im sorry, without . Without the leverage. Without the leverage . Yes, sir. I think that would just be the equity. Right. I think you committed 75 billion, so most of that. Is left . Yes. With no leverage. Okay. Assuming that were not going to use that in the next six months, of all of our alternatives to try to stimulate the economy, whats the single highest and best use of that money . I think well use some of it. We are using some of it even as were speaking. How much do you think youll use . I think the total loans might be, i dont know, 10, 20, 30 billion by the end of the year. Thats with leverage. Lets suppose we have 50 billion left, then. That will not be well, let me put it another way. Is there a higher and better use of that money than the main Street Lending program, given what we know about the program right now . Well, this is really i have a strong desire to not get too deeply into these specific fiscal questions, but i would say there are some things you have talked about today that would be directly whats the single higher and better use . To me, it would be ppp, and it would be ppp and then after that, i would Say Something more for those who remain unemployed. Okay. Mr. Secretary, do you disagree or agree with that . I do agree with that. Not just that money, but the 200 billion that i have on the sidelines. Okay. So if we could agree to take 50 billion of equity from the main Street Lending program and commit it to, for example, ppp, you think that will help the economy . I do. On top of the 130 billion thats sitting there unused. Right. Do you agree with that, mr. Chairman . Well, i do. There is this 200 billion, though, that i would take that first rather than taking it directly from main street. Right. The part that has not been allocated at all is 200 billion. I understand. Mr. Chairman, whats going to happen if we dont pass another coronavirus bill . Well, i think the risk is that spending will weaken and these 11 million and change people, and actually, there are money more than that whose working lives have been disrupted, but 11 million in the Payroll Survey that are unemployed. And some of those are going to have a hard time getting back to work because they work in those difficult areas of the economy, and so they have money in the bank now from the checks they got and from the Unemployment Insurance, and i think theyll go through that. So well see sooner or later, probably sooner, we will see that the economy has a harder time sustaining, you know, theseen. Thats the risk. Okay. Mr. Secretary, if we in the senate along with our colleagues in the house could agree to do one thing to improve our economic situation, what would you recommend that we do . I would allow us to spend the 130 billion thats sitting in the ppp, money thats been appropriated by congress and allow us to send second checks to those businesses that are hardest hit, and Small Businesses. And that would be your number one priority . That would be. Okay. Im about to run out of time so i want to slightly change the subject here. Mr. Chairman, rather, mr. Secretary, i know youre part of the president S Working Group on china markets. Is that correct . Yes. And i appreciate your good work on that. Two of my democratic friends in the house have told me that Speaker Pelosi has decided not to move any senate china bill that is sponsored or cosponsored by a republican. How do we address that . Im not aware of that. But again, would be happy to work with you and followup. Could you bring that up with the speaker . Id be happy to. Thank you very much. Thank you, gentlemen, both, for your good work. I want to associate myself with my leagues remarks, complementing you. Youve had to do it with with happy thoughts and spit and duct tape, but youve held this thing together. And i want to thank you. Senator cortez. Thank you. Gentlemen, thank you for being here as well and i, too, i want to thank you for your responsiveness always and so appreciate that let me talk about something i know i talked to both of you over the phone and in person about is the hardhit tourism and Hospitality Industry. In april almost 8 million jobs in the leisure and hospitality sector were lost. You both know that. Workers in the leisure and Hospitality Industry experienced a peak decline in employment of more than 52 . Nevadas economy cratered, nevadas Unemployment Rate is more than 13 , more than 300,000 people continue to claim Unemployment Insurance and in a recent survey from the American Hotel and lodging Association Nearly three quarters of hotels will have to lay off employees if they do not receive additional government funding. In las vegas and reno employment in our hospitality and leisure sector sector, its down by nearly 25 most among all sectors. Start with you secretary mnuchin. Weve had this conversation and i know you appreciate how hardhit our industry is. You talk about there needs to be an additional targeted relief. Can you identify what that targeted relief would look like, specifically for this industry . Well, i think the. Pp ppp is the most effective way to get targeted relief to the jobs you refer to. We would put a revenue decline test to make sure that it was allocated to the businesses that really needed it. But it hasnt been. Live, i just heard the senator say ppp wasnt working in his state and it hasnt worked in nevada. Clearly, too many of our businesses are still suffering around the Hospitality Industry as well from live events to restaurants. So what do we need to do to target it . Thats what im looking for. My concern is a comment made earlier that some sort of relief is better than nothing. So i am not about picking winners and losers and i think that comment is, unfortunately. I dont see how you can identify an individual or business that gets relief when some dont. I dont know how you can identify that maybe the Airline Industry who needs relief and those workers need relief when were not giving direct payments to those that are unemployed and still working on the unemployment and how we still dont target funding for state and local governments, how we still dont target what is necessary right now around the health care industry, because we all know thats the cause of our economic woes right now, and we should still be funding that. All of the things that i have seen put form in this skinny bill they dont fund any of those things. Dont we really need a comprehensive package . Let me ask you both. Isnt that what we need here to stimulate and continue to stimulate our economy to get out of this . A comprehensive package so nobody is left behind . I want to clarify my comment on some relief better than no relief was implying we should have is a kpree mize and have bipartisan support. With no legislation, that do any good and also just say i think the ppp has helped those industries enormous amounts, theyve just run out of money and need a second check. Right. No. I dont disagree with you there. We still have to target money to Small Businesses. I absolutely agree and think thats thats part of the concern here is that by the conversation that im hearing is that we are looking at only lifting up some within the communities and not everyone. And i guess my question again to you is, dont we need comprehensive relief here . I do think we need comprehensive relief. Not a question of some versus none. A question of, right now were stuck, because the democrats have a commitment of, if its not less than 2. 2 billion theyre not willing to sit down and talk, and well, listen, secretary, listen, secretary mnuchin, i can debate this with you all day but the people, public doesnt care right now. The American Public want relief arn you can talk about democrats, talk about republicans, look. We can also talk about the fact republicans instead of negotiates with democrats in the Senate Behind closed doors put together a skinny package threw it on the floor of the Senate Without going through committee and without negotiation, and that, in Mitch Mcconnell ownwords, theres 20 of his members who dont want to do anything. We can debate that all day long but it doesnt get us where we need to be. Which is too many people across the country are suffering and it requires us to come together and do a comprehensive package. All im looking from you. Youve done it before. Did it four times before. I just need the commitment youre still there to do a comprehensive package with everyone . You have my commitment, available any time. Reiterate, this committee is very effective. Mr. Chair, if you and other members of this committee on a bipartisan basis want to sit down im available anytime. Thank you. Thank you. Thank you, senator cortez mast masto, and thank you, secretary mnuchin. Your commitment to trying to put together the kind of package we need, a comprehensive package is unmistakable. Your commitment is solid and i appreciate your restatement of that commitment to sit down with us and try to work this out. Next is senator mcsally. Thank you, mr. Chair. Good to see you, secretary mnuchin and chairman powell. Thanks for your work, secretary mnuchin. We worked together on putting together additional covid relief i voted yes on, a few weeks ago. Just for a review, that included 257 billion secondround of ppp targeted for the smaller mom and pop shops and the hardest hit Small Businesses likeable of them in arizona. Theyre grateful for the first round of ppp but some still struggling and this would have really been a life line for them. Common sense liabilities protections for schools, hospitals and businesses to protect them from an epidemic of trial lawyers coming of them while they follow best practices. The extra 200300 in unemployment for those still unable to work as we defeat the virus and move forward. I champion for child care providers, so they could reopen, stay open. Particularly important for working moms, to be able to balance, get that safe place for the kids to have child care while they can safely return to work. Also i thought to extend the deadline to september 30th, 2021 for spending of the already appropriated money in the c. A. R. E. S. Act for states, tribes, local governments under the Coronavirus Relief fund. Something weve heard from communities especially the tribes. Its so important to extend that. Great to see that in the bill. S 3ds 1 billion for vaccine therapeutic diagnostic development, vaccine distribution, restocking strategic stockpile. S 20 billion additional pharma assistance going out to farmers and ranchers and growers who need that support and 105 billion for schools to get students safely back to school, both higher education, k12 with School Choice and support to the post office. Postal service. I know im hearing from Small Businesses. Doing everything they can. Grateful for ppp and this was a targeted, strong relief package to get relief out the door. People are tired of hearing the blame game going on in d. C. This was going to get needed relief out the door. Secretary mnuchin, can you share with that 257 billion as we see the economy, status of the, economy and a lot of Small Businesses still struggling, how many Small Businesses could we have saved if that 257 billion was out the door now and helping Small Businesses across the country . I dont have the exact number. An awful lot. Yeah. It is. In arizona alone, 86, over 86,000 Small Businesses took advantage of ppp and 1 million jobs saved. Just this second round would really be impactful. I mean, if you can just share your views on the economic recovery and how important this second round of ppp would be . Look, vote on that on the floor. Just continue to vote on things we can agree upon. We should be moving this relief out to Small Businesses. Share your view and chairman powell of the importance of getting this out the door to support these Small Businesses . As i said earlier i think the single most impactful area and again, just emphasize, this doesnt even require additional funds to be appropriated. We can have the 130 billion there, and allocate some of the money were not going to use on the fed facility and not cost an extra penny. Exactly. Chairman powell, do you have anything to add on the importance getting additional relief out to Small Businesses like i voted yes on a few weeks ago . Not much. I just would agree that this is something that would help the economy. Great. Thank you. Followup on the extending deadline. Again, not additional money. Money that was already sent out. Tribal relief fund, which i championed, 8 billion out to tribes and resources out to states and local governments. We were able to include into that legislation voted on in the senate extending that a year. In the military, see we have to spend money by end of year, often use it or lose it, best things you could spend it on, not the best things. Heard from the navajo tribe who have a plan to invest it, but if youre talking about infrastructure projects, water, things that really would be impactful to address underlying challenges theyve had dealing with coronavirus, they just cant get there by end of the year. This is not one additional dollar. Just an extension. Could you share again, secretary mnuchin just your support or your views on i strongly support that as well, yes. Great. Thank you. And just one last question, and almost running oucht of time. Followup. Small business took advantage of ppp or couldnt but theyre struggling related to managing their bills, managing their debt and i appreciate being engaged on this in response to the, this pandemic, the trouble debt restructuring provision in the c. A. R. E. S. Act, and so the Statement Issued by, directly by the fed encouraging lenders to work with customers experiencing Financial Hardship to try and help them restructure if needed and not have it be a ding on them. Unfortunately im out of time but would like to hear what youve seen in regards to uptake and implementation of this policy and what other actions regulators or vendors are taking to ensure individuals and businesses across arizona and the country are where there are options beyond ppp or the main Street Lending program to help give them relief here . So look forward to following up on the record. All right. Thank you, senator mcsally. Yield back. Senator jones . Thank you, mr. Chairman. Appreciate this opportunity. Thank you to both the witnesses. Really appreciate that being present here. Also, you know, i just listened to a review what was all in the bill that was voted on a couple of weeks ago. Unfortunately, time does not permit me to go through all of the inadequacies of that bill and they are legion. The fact of the matter is that that bill was less than half of what was being floated out there in august, and this majority leader had to reduce that in order to get members of his own caucus to join it. Clearly, more of a partisan bill. More of a partisan vote, rather than any effort at all to reach bipartisan agreement. I would like to associate myself somewhat with senator menendezs comments about city and local governments. My home town of fairfield suffered, had to file bankruptcy. Just this last friday in birmingham 150 Library Employee hs to be furloughed. Mr. Chairman, id like to submit for the record a chart detailing the loss for 60 alabama cities of 40 million theyve not been able to recoup. Ask unanimous consent that be submitted for the record. Without objection. The Alabama League of municipalities says 46 for lomping taxes. A lot we can do, i think senator menendez kovcovered that appropriately. Secretary mnuchin, let me ask you quick about the stimulus checks, because while i also hear about ppp and Small Businesses i hear from a lot of folks about a next round or the 150,000 alabamians that have not got their money from the c. A. R. E. S. Package. The g. A. O. Report released this past monday shows nearly 9 million americans, 150,000 of those in alabama, that still have not received their 1,200 stimulus checks. These are folks that dont make enough, dont file taxes, and i understand that there is, was a letter going out in september about urging people to do that, but also theres an october 15th deadline that i am afraid a lot of people are not going to make. Will you, can you commit to extending that october 15th deadline for a month or so . Maybe until december in order to get these folks their checks now rather than waiting on some kind of tax credit that may or may not even work for them . Yeah. Let me go back and see if we have the ability to do that. Yes. Okay. That would be great. I think you do. You do have that ability, but if you could get back with our office about that i would very much appreciate it and i agree with senator menendez about your responsiveness and really appreciated that during the course of this. Chairman powell, briefly, i think by now folks recognize that the stock market is not always the best indicator of where the economy is going. We have seen its been like one of my favorite roller coasters down in georgia. The Great American scream machine. Its up, its down. Depends how the day traders look on it end of the day. Not that its bad but not the only one. During the pandemic many hardworking americans lost their child care with day cares closing and elderly relatives worried about exposure to illness. Without the flexibility of working from home many had to cut back on hours and some cant work at all. Which this means smaller paychecks or no paychecks whatsoever. Hardesthit folks, i think, in my view, not just those that, if you go to one demographic, single moms. In alabama more than 25 of alabama households, 25 , of alabama households, are headed by single mothers. Of those, 50 of those are women and children who live in poverty. Without some kind of deal that includes a stimulus check or the ability if they havent got one already to get it, how are these single moms going to put food on the table . Pay for necessities . My several question, chairman powell, what impact will consumers with less discretionary spending, like these folks have, what impact will that have on the economy Going Forward . Let me just start by agreeing with you that the burdens of this pandemic have fallen hard on people just like the ones you describe. If people start to run through what resources they have, theyre at risk of losing their homes, having to move out of the place they rent. Move back in maybe with family. And those things are not necessarily good for controlling the spread of the virus. In addition, of course, they cut back their spending. And, again, just point to the c. A. R. E. S. Act, really did a lot of good, in putting money in peoples hands and keeping them in their homes and keeping them spending and in one piece. And you know, Going Forward more that may be needed. Right. Thank you, mr. Chairman. Thank you, secretary mnuchin. Appreciate you both here. Thank you mr. Chairman. Thank you. Senator smith . Are we there . Yes. Senator smith. Is that you . Yes. Can you see me . Sorry. Yes, we see you now. Go ahead. Thank you, mr. Chair and Ranking Member brown. Also i thank secretary mnuchin and chair powell for being here. Chair powell, start with you. I sit in the seat that was once held by senator hubert humphrey, a champion for full employment, and in fact his name is on the humphreyhawkins bill with the mandate for the fed of maximum employment and stable prices and that youre charged with implementing. You noted several times, i appreciate your comments how covid has not been the great equalizer, just disproportionately is affecting people in lowwage jobs. Essential workers often women, of women and women of color, black and brown people, indigenous people. My question is this as you think about your mandate at the fed and think about the decisions that you make around Monetary Policy, could you just talk a little bit about how you see this, the impact of Monetary Policy on supporting households of color . What can you we know fed research has shown workers of color tend to recover their lost wages more slowly, for example. Im interested in knowing how you think about this and how you might want to bake that more into your work Going Forward. So the single best thing we can do is support a tight labor market, a strong labor market. We saw in the last few years of the last long expansion that the gains began to go more and more to people at the lower end of the income spectrum, more and more to minorities and women and so that was, we think, significantly because unemployment was very low. Companies were having to look hard to find workers, and it just, its a state of affairs that wed love to get back to. I just would add, though, you know, it took us eight years to get from the Global Financial crisis to that tight labor market. It just takes a while. I think there are other tools to help in the meantime. Those are really the fiscal tools. Not a good strategy to wait for unemployment could get really logan, although that will work ultimately. So thats the main thing that we can do. Of course, we also have tools where we, we supervise banks and to make sure that there isnt discrimination on racial lines and things like that. By far the most important thing we can do, seek maximum employment and in doing so, take account of all groups, of disparate demographic groups, not just the headline number. And what about the relationship between low Interest Rates and how communities of color do . Whats that relationship like and how do you see that . Low Interest Rates support higher Economic Activity over time and that supports lower unemployment. Higher employment and lower unemployment. So also supports higher inflation as the economy gets closer and closer to full employment, and to full capacity. Youll see inflation rise a little bit. Not a lot. So its a virtue that over time helps everybody. Now, in the short run, of course, the people, if youre relying on interest on your bank account, it doesnt help you much there, but over the medium and longer term it supports job growth and Economic Growth generally. Thank you. Chair powell, i appreciate that and i hope that you will continue to look at how, keep workers and especially lowwage workers and workers of color in the forefront as you think about monitoring policy and as well fiscal policy. Secretary mnuchin followup on something i wrote to you about recently, just received some information back from you late last night. This has to do with how the Treasury Department is working to get Economic Impact statements, or obtainments, pardon me, out to folks that are, that are homeless. People and in minnesota are living, all over the Country Living in shelters and encampments and cars a large tent encampment a few blocks from where archie and i live in minneapolis and those folks are not getting their Economic Impact payments. Would you just tell me what youre doing . You said in the letter that, the information received last night, you have special tools that youre working on. Of course, i know about your nonfilers website but a lot of the folks that i am talking to dont have access to that website. What are you doing and especially what are we doing with this deadline approaching in a few weeks . Well, i mentioned earlier on the deadline, well go back and explore that, see what we can do. Appreciate that. As you said, we need to help the homeless. I think the best way to do that is work with Community Organizations that locally can help them, and facilitate obviously for us to be able to do this. And do you have any information about how many folks who are experiencing homelessness have been able to get their checks . How youre doing with, what results youre getting . On that specific issue, ill followup with your staff and try to get you some statistics. Okay. That would be helpful, because its getting cold and in minnesota, and i dont know whats going to happen to those folks living, literally, dont have a safe place to call home right now. Thank you. Thank you. And i believe we have senator cinema with us by telephone only. Senator . Naunkthank you chairman crapo and witnesses for being here today. We saw positive job growth last month in arizona a significant part of those gains appear to be government jobs we knew would return. Specifically arizona teachers returning to schools. Private sector job Growth Continues to be slow due in large part to the coronaviruseffect on business operations, Consumer Spending and most importantly Public Health. One of the emerging issues is housing pain cording to the kren Census Bureau over 3,000 arizona families missed july rent payments. Twothirds of those are families with children. This experimental survey last taken when arizona was still providing an 600 additional of enhanced Unemployment Insurance. Now thats no longer available its all but certain the situation has gotten worse. A reminder, arizonas Unemployment Insurance tops out at 240 per week. The Second Lowest rate in the nation. When you cant make rent you risk getting evicted. The National Low Income Housing Coalition projects 770,000 arizonans are at rick of evictione risk of eviction by end of year. Have either of you ever experienced eviction or foreclosure . I fortunately have not. Let me just say we support rental assistance. Ive spoken to chairman crapo and others and as part of other legislation wed look forward to working with you. For me, just a, no. I havent. Well, as you may know, i was homeless for a number of years as a child. And i wouldnt wish it on anyone. I know the challenges that sfamilies are facing and its important for those in washington to understand. In Elementary School my dad lost his job and my parents divorced. We lost our car and home and were homeless almost three years. We lived in an abandoned gas station without Running Water or electricity. This might sound like an extraordinary story, but its actually much more common that you would think. And its something that millions of americans could face in the coming months. Receiving notice of eviction or foreclosure and having your home taken from you, forced to abruptly pack up all of your familys possessions not knowing where youll go next are incredibly difficult and painful experiences and hard to explain or understand until youve done it yourself. Understanding evictions and foreclosures in strictly economic events, but in arizona, we know that losing your home does more than hurt your credit. It does more than jeopardize your financial standing. It takes away your dignity. Its personal. And at times can seem like its impossible to get back on your feet. We have an interest in minimizing evictions whenever possible, but especially during a pandemic. While the cdc recently halted evictions until end of year, the decision simply prolongs the inevitable. Without rental assistants for fatherinlaws it shifts the burden but provides no means of paying for it. Unfortunately arizonas rendle assistance riddled for months with delays is completely out of money. Arizonas situation will go from bad to worse if we see mass evictions and record homelessness during a Public Health crisis. This could destabilize our real estate market, hurt redetail businesses further depressing Consumer Spending and tighten access to credit all when arizona families and businesses can least afford it. Chairman powell, if Congress Fails to pass rental assistance and hundreds of thousands of arizonans are evicted come january, do you anticipate those it evictions would have a positive or negative impact on arizonas economy . Clearly, a negative impact. I agree. One working with senators on this committee to provide targeted rent, mortgage and utilities assistance to keep arizonans safely housed during challenging times and working with sdpri partners and Housing Affordability advocates to build broad bipartisan support. These proposals could be included in the next Coronavirus Relief package. As we work to give businesses in our economy back on their feet im pleased to have worked with a number of republican colleagues on these efforts, we cannot forget that families are struggling. We should have taken action months ago. And now the needs are more urgent than ever. Arizona families face tough choices right now and its Time Congress recognize these challenges and take action. Thank you, mr. Chairman. Thank you, Ranking Member brown. I call on us to find a solution for arizonans and for families struggling across the country. I yield back. Thank you, senator. That concludes the questioning for todays hearing. Senator brown asked for a minute or two for an additional statement and then we will wrap up the hearing. Senator brown. Thank you, mr. Chairman for always giving me an opportunity end of the hears to ask one more question of the witness and make a short statement. I first want to thank the senator for bringing up importance of renting assistance. We asked for money that is the pandemic goes on barely covers the assistance we need. My question, mr. Secretary for you briefly. I mentioned an article, how Small Businesses in propublica, Small Businesses sufzerring and big conversations benefit from did you read the article that we sent you . I did, i looked at it very quickly on the way up. I did not have a chance to read the whole thing, but i saw it briefly. I hope you will by no busy, i know you are, way more busy than any other. I hope that you will pay some attention to how risky over Leverage Companies can benefit from a government backstop. To keep budgets, to see profits up and bolster their stock prices. I hope you read that and really take it to heart. Just a statement, and closing mister chairman. Thank you, i agree that both of you, i speak more obviously to chair powell, but both of you are always responsible members of the senate and to our staff. So thank you for that. Secretary mnuchin, you agree we need a large aggressive comprehensive bill to keep the economy working, we cant do it piecemeal. You know how this place works by. Now it takes months to get a bill, done math as we know six months since un the president and makers need to bring republican senators to the table supporting your ideas and our ideals in a bigger package. Get your act together, tell Mitch Mcconnell he needs to put, even if he has 20 people in his caucus who dont want to do anything. They need to put a serious bill forward, because we will get all the democrats to work with the republican congress. If we dont get direct funding on this, with others to the republican witnesses in the end we can have another great depression. Another rise in the stock market does fine but mainstream businesses and restaurants are shutting down. Black and brown businesses and communities are taking a huge hit for the second time this tech decade. Airline workers are doing well, some are facing job costs. We can do better it comes down to who side are you on as you know mister secretary mister chairman. Frankly not seen the country through the eyes of workers, which is so important. And they havent really tried the house passed the heroes act in may, in june july september. Almost all of september the president s and republicans have taken up or come up with their own comprehensive not skinny, but comprehensive package. To help working families thank you for the two of you for testifying. Thank you, thank you for your indulgence and cooperation. Thank you, ive just been notified that one of our senators, senator kramer, maybe joining us remotely and would like to have an opportunity to ask his question. If you are with us senator kramer, please let us know and you may ask your questions at this point. It sounds like senator kramer has not been able to make that connection. So we will conclude the hearing, i would just 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 congress, to put a strong fully effective relief package together. At this point, i personally believe that we have not had the willingness from the other side to engage in a reasonable package. The demands continue to be our way or the highway. Frankly, i believe, that there are many items that we have already reached agreement on. Or which we could Reach Agreement on very rapidly if we would take them up. If we had the willingness to simply take them up and do them. Individually. And and so my hope is while we continue to work on a meaningful comprehensive package that we also recognize that we need to act and we need to act now. And there is a significant amount of good solid relief that we can put forward rapidly. If we can just get agreement to move forward to do what we can do and continue working on putting the rest of that package together. I want to know those electronic sounds to me that senator kramer has been able to join us. Senator kramer you with us . All right with that then that concludes todays hearing. Four senators who wish to submit questions for the record, those questions are due to the Committee Thursday october 1st. To each of the witnesses we ask that you respond to those questions as properly as you can in our response to this coronavirus crisis. This hearing is adjourned. Thank you mister chairman. Weeknights this month were featuring American History tv programs as a preview of whats available every weekend on cspan 3. Tonight, a look back at the 1960 president ial elections with the Nixon Kennedy debates. The first ever president s president ial studies director of the university of virginias mother center, talks about how the debates came to be. The issues, the candidates, and how the debates created public expectations for later president ial campaigns. Watch tonight, beginning at eight eastern, enjoy American History tv this week and every weekend on cspan 3. The first president ial debate between President Trump alltime and former President Joe Biden is tuesday night at nine eastern, from cleveland. Watch line on cspan