The hearing followed the release of a report, which found that the Treasury Department has spent just $37.5 billion out of the $500 billion Congress allocated in loans for businesses and local governments…
This marked the first time officials were questioned by the Senate Banking Committee on the results of the $2.2 trillion-dollar CARES Act—and the first time being done remotely to abide by social distancing rules. The hearing follows the release of a report from the Congressional Oversight Commission, claiming the Treasury Department has spent very little of the $500 billion dollars allocated in loans for businesses and local governments.
To that, Treasury Secretary Steve Mnuchin said they are still planning to allocate all of the money, they just haven’t done it yet. He was also questioned on the accusations that larger corporations are receiving aid first, while small businesses are still waiting for relief.
“Companies such as Boeing, that I had expected would need to borrow from us on a direct basis, were able to borrow $25 billion dollars in the primary markets. So, I would say, in the best-case scenario, the markets open up and they don’t need to use these facilities. In the case of Main Street Facility, the municipal facility, which we expect both to be up and running by the end of the month. We expect these to have a big impact on both those markets,” Mnuchin said.
That Main Street Lending Facility he referred to is a $600-billion-dollar program for small and mid-sized businesses that do not qualify for previous programs. But while it is expected to be up and running by June, it’s not clear when those businesses will actually see the relief they desperately need.
More than 36 million Americans have filed for unemployment since the coronavirus lockdown began, and members of the committee voiced concerns for the countless Americans who are still expected to pay rent. Federal Reserve Chair Jerome Powell has estimated that unemployment could go as high as 25%, and he argued the major goal right now should be getting Americans back to work.
“Long periods of unemployment can really affect people’s ability to go back to work because they lose their networks, they lose their skills, they lose their contact with the job market, so I think anything that keeps people in tact is hopefully in their job. But in the meantime, keep them out of solvency and things like that, should the expansion start later or take longer to get going,” Powell said.
It’s also important to note that, according to the latest reports, an estimated 44 percent of Americans who have applied for unemployment still have not received benefits, or have been denied.
The senators on the committee expressed concern for the service industry workers who have stayed on the job because they are essential, but have still been paid low wages despite a higher risk. Senator Sherrod Brown of Ohio argued that simply saying “thank you” isn’t enough.
“They put their lives on the line for very low wages and they’re still worried about paying the bills. Is that fair?” Brown asked.
“Mr. Senator, I just want to thank all of the essential workers, whether it be the healthcare people…” Mnuchin responded.
“Thanking is great, but these are people—is it fair that our economy pays the essential workers so little in such work conditions?” Brown interjected.
Mnuchin argued some essential workers are getting paid enough, and Powell insisted the focus should be on increasing the safety of the conditions they work in.
As for the $3 trillion-dollar stimulus package that was passed by the House, the focus appears to be on making sure the money from the last stimulus package is actually used before they move on to the next.