WASHINGTON, DC (NEXSTAR) — The heads of the U.S. Treasury and Federal Reserve testified in a virtual Senate hearing Tuesday about the state of the economy amid the coronavirus crisis and the status of relief funds Congress approved in March.
It was the first quarterly report on how they have distributed trillions of dollars.
“We have had to take unprecedented steps to shut down significant parts of our economy in the interest of public health,” Treasury Secretary Steven Mnuchin told the Senate Banking Committee.
In response, lawmakers have approved unprecedented amounts of spending to help those struggling during stay-at-home orders, mainly the $2 trillion CARES Act.
“While we are all affected, the burden has fallen most heavily on those least able to bear it,” said Federal Reserve Chairman Jerome Powell.
The legislation created a $500 billion loan program for businesses, airlines, and state and local governments, but a new report from the Congressional Oversight Commission found so far that money is barely being used.
Sen. Tom Cotton, R-AR, wanted to make sure companies in the corporate bond business have access to the funds.
“Any thoughts on when that decision might be made so some of these companies can get the certainty on whether they’ll have access to that facility, another facility or perhaps a new facility?,” Cotton asked.
“We want to make sure that if there are companies that slip through these two facilities [Primary and Secondary Market Corporate Credit Facilities], the chair and I will work together to make sure that we deal with those issues so they have funding,” said Mnuchin.
Sen. John Kennedy, R-LA, asked about the timeline for state and local government funding: “Is your municipal liquidity facility set up?”
“Yes, it is,” Powell said. “Well, we’re probably two weeks away from it being operational.”
Senators also took the opportunity to get the leaders on the record about pending legislation.
Kennedy’s bill would allow state and local governments to use the $150 billion Congress has already appropriated not just for coronavirus relief but also for operating expenses.
“If there’s bipartisan support for that, I’m sure the president and I would look forward to that,” Mnuchin said.
A bill Sen. Doug Jones, D-AL, plans to introduce this week would help business owners keep their employees on the payroll with benefits.
“While we don’t want to give folks incentives to stay on unemployment, we certainly do want to give incentives to businesses to open carefully,” Jones said.
“I’ll be happy to take a look at your proposed legislation,” Powell said.
Both leaders are expected to return and report again next quarter.