Treasury Secretary Steven Mnuchin said on Wednesday that he strongly supported further legislation to provide more relief to the economy but added that the aid must be more targeted to help specific businesses and industries that are struggling.
During a hearing with the Senate Small Business Committee, Mnuchin said that unemployment was still very high and that the administration wanted to work on further incentives to decrease it. The Treasury chief said he was open, for example, to changes to the small business relief aid known as the Paycheck Protection Program, as well as new tax credits.
“I definitely think we are going to need another bipartisan legislation to put more money into the economy,” Mnuchin said. He also said spending needs to be focused on businesses “that are having the most difficulty in reopening as a result of COVID-19,” such as the travel, leisure, and restaurant industries.
“We’re open-minded, but we absolutely believe small businesses — and, by the way, many big businesses in certain industries — are absolutely going to need more help,” he said.
The hearing was regarding the Small Business Administration’s Paycheck Protection Program, which was established to help struggling small businesses avert layoffs through $670 billion in refundable loans, funded initially by the massive $2.3 trillion CARES Act relief package that President Trump signed in March.
Senators from both parties said during the hearing that the small-business program played a significant role in the unexpected May job gains reported Friday. Mnuchin said the program has kept “tens of millions of employees connected to their jobs.” He also said he was “pleasantly surprised” by the recent jobs report because he “thought we were actually going to bottom in June and not May.”
Mnuchin also said that “we’re going to need to fix unemployment” insurance, referring to the $600-a-week boost to benefits that is set to expire at the end of July. According to the Congressional Budget Office, if the unemployment boost is extended, it could reduce the level of reemployment, as people would choose to receive jobless benefits over returning to work.
“We knew there was issues with the enhanced unemployment where in certain cases we were paying people more not to work than work,” said Mnuchin.
“I think we’ve seen from the recent numbers that didn’t have a big impact because people want their jobs. But we will have a significant amount of unemployment, and we’re going to need to look at doing something there,” Mnuchin added.
In addition, he said, officials will “seriously look at” whether “to do more direct money to stimulate the economy.”
Mnuchin said that although there are signs that the economy is going to rebound significantly, there is still significant damage in parts of the economy.
“We’re going to use all of our fiscal tools to work with Congress” to “restore this economy to where it was,” he said.
