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Second stimulus check: what did Mnuchin say in Congress testimony?

Steven Mnuchin, the US Treasury Secretary, appeared before the House Financial Services Committee on Tuesday to testify over coronavirus relief package impact.

U.S. Treasury Secretary Steve Mnuchin testifies before a House Financial Services Committee at a hearing on oversight of the Treasury Department's and Federal Reserve's coronavirus disease (COVID-19) pandemic response on Capitol Hill in Washingt

US Treasury Secretary Steven Mnuchin is an important player in the seemingly never-ending discussions over a new coronavirus relief bill and has been providing us with regular updates, at least from his perspective, on the situation over a second round of stimulus checks.

On Tuesday he testified before the House Financial Services Committee and among other areas covered by lawmakers, there was a focus on the current economic recovery situation amid the pandemic, and the outstanding relief package.

Here are the headline messages regarding the economy, the relief package and the potential for stimulus checks:

Mnuchin testifies to House Financial Services Committee

‘Continuing to work with congress toward a phase 4 relief package, believes a targeted package still needed’

‘Tremendous Q3 growth led by strong retail sales, housing activity, manufacturing growth’

‘Would be fine lowering main street threshold to $100,000’

US Federal Reserve Chair Jerome Powell and US Treasury Secretary Steve Mnuchin leave after the House Financial Services Committee hearing.
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US Federal Reserve Chair Jerome Powell and US Treasury Secretary Steve Mnuchin leave after the House Financial Services Committee hearing.POOLREUTERS

‘Expect losses on main street and working with Fed to improve program’

‘The next package should be more targeted’

‘Agreement to reallocate $200 billion from Federal programs to other program with congressional backing’

‘The right balance was struck on airlines package’

‘PPP could be revisited, assistance also needed for families with kids’

‘President Trump would support additional PPP money’

‘Structural problem with CMBS that inhibits main street from helping CRE borrowers’

‘Tried to offer state and local governments flexibility on relief funds to get money spent’

‘Do not believe we need additional congressional authorization to take additional risk but does need it to use funds in certain other areas’

‘Support long-term loans for businesses like small hotels as part of additional SBA appropriations’

Stimulus checks: Mnuchin eyes compromise

Last week, speaking in the more relaxed environment of CNBC’s Squawk Box, Mnuchin suggested a positive outcome on the Economic Impact Payments was still possible, despite Republicans and Democrats still struggling to find a compromise.

"There is a compromise if the [House] speaker is willing to move forward. I am somewhat concerned that she's afraid any deal would be good for the president," Mnuchin stated as he continued his messaging that party politics were a likely impediment to successful negotiations.

"I've told the speaker [Nancy Pelosi] I am available anytime to negotiation, no conditions," the treasury secretary continued.

With the Democrats pushing for a significantly larger outlay for the relief bill, many Republicans are concerned about the country’s growing debt, something Mnuchin was not interested in discussing right now.

"Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet.”

Mask or no mask?

The Treasury Secretary was also asked about the value of mask wearing, given that many supporters of President Trump continue to fight against it.

"I think it's better to wear a mask, than not wear a mask," Mnuchin said. "What we need to do is make sure we get the economy back to where it was before Covid - that is a combination of testing, vaccines and some more fiscal support."

Mnuchin: previous stimulus check comments

Back on 6 September, Mnuchin joined his friends on Fox News: “The president and I couldn’t be more pleased with the way the economic plan is working,” he began before going on to explain how talks on the relief package were going.

Speaking to the news channel’s chief political anchor, Bret Baier, on Fox News Sunday, Mnuchin pushed that “the president and I believe we should do more stimulus” as a means to getting more than 17 million people back into jobs and helping businesses. But asked where the sticking point came, he was clear about where to point the blame.

The speaker has refused to sit down and negotiate unless we agree to something like a $2.5 trillion deal in advance,” Mnuchin stated.

“The president and I believe we should do more stimulus”

Steven Mnuchin

Targeted, not ‘skinny’ bill

Baier posed the question if Senate Republicans would move for a so-called ’skinny’ bill in the coming week, something Mnuchin preferred to call a ‘more targeted bill’.

“As you know, we put $3 trillion into the economy when the economy was completely shut down and we’ve now reopened the economy. Let’s do a more targeted bill now and if we need to do more in 30 days we’ll continue to do more, but let’s not hold up the American workers and the American businesses that need more support.”

Government shutdown avoidance

Mnuchin was also asked about the agreement made with the Speaker on government funding for a continuing resolution (CR).

"We both don’t want to do a government shutdown so we’ve agreed that we are going to do a clean CR," Mnuchin explained. “We’ll do this separately from the CARES Act negotiations.”

“I hope by the end of the week we can can begin moving forward with that, because that’s important to the American people.”

Election stimulus | President Donald Trump has a vested interest in American households feeling positive about government actions.
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Election stimulus | President Donald Trump has a vested interest in American households feeling positive about government actions.Melissa Sue GerritsAFP

“We haven’t agreed on the specific details,” Mnuchin said when asked about how long it would keep the government going, but he believed that it would go "through the beginning of December.”

National debt management 'like a war'

As well as other topics up for discussion, including reports about Donald Trump calling fallen US troops ‘losers’, Mnuchin also considered the challenge of addressing the national debt.

"Before we got into Covid I thought the debt was very manageable," he said. "This is like a war. In a war, you've got to spend whatever you need to spend."

"Once the economy is back, we will focus on this issue."


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