Statement of Secretary Steven T. Mnuchin — Senate Small Business Committee, June 10, 2020

Summary

The written statement of Secretary Steven T. Mnuchin of the Department of the Treasury before the United States Senate Committee on Small Business and Entrepreneurship, dated June 10, 2020 and addressed to Chairman Rubio and Ranking Member Cardin. It opens with an economic outlook citing 2.5 million jobs gained in May and a personal savings rate of 33 percent of disposable income for April. On the Paycheck Protection Program, the statement says the program was launched in 6 days and supports approximately 50 million workers, and describes second round funding for over $300 billion. It then reports on other CARES Act programs: nearly 160 million Economic Impact Payments worth more than $260 billion, over $27 billion for airlines and other businesses, the $150 billion Coronavirus Relief Fund and approximately $200 billion in credit support for Federal Reserve facilities.

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                          Statement of Secretary Steven T. Mnuchin
                                Department of the Treasury
                                  Before the Committee on
                            Small Business and Entrepreneurship
                                    United States Senate
                                        June 10, 2020

Chairman Rubio, Ranking Member Cardin, and members of the Committee, thank you for this
opportunity to highlight the efforts of Treasury and the Small Business Administration (SBA) to
provide relief to businesses and their workers through the Paycheck Protection Program (PPP).
We are committed to working with you to ensure that every American gets back to work as
quickly as possible.

Economic Outlook

America’s economy has begun to rebound, and our recovery is underway. While estimates
predicted nearly 8 million jobs lost in the month of May, the actual data released Friday showed
2.5 million jobs gained—the largest one-month jobs gain in recorded history.

Several other indicators show that we are well-positioned for a strong, phased reopening of our
country. The U.S. Chamber of Commerce announced last week that 79 percent of small
businesses are at least partially open, with half of the businesses that remain closed planning to
reopen very soon. The personal savings rate for the month of April, released on May 29, was a
record high 33 percent of disposable income, indicating that people have built up cash reserves
during the pandemic and will be in a position to resume consumer activity as businesses open.
Likewise, investors and businesses have increased cash positions, with data indicating that over
$1 trillion has flowed into money-market mutual funds since February. This data point, among
others, shows the availability of private capital to re-invest into commercial operations.

This economic positioning is the direct result of the Trump Administration and Congress
working together to pass bipartisan legislation to provide necessary liquidity to workers and
markets. The PPP has kept tens of millions of employees connected to their jobs. The National
Federation of Independent Business found that 73 percent of its members surveyed rehired or
retained workers due to the PPP. Economic Impact Payments and enhanced unemployment
insurance are providing relief to millions of families and workers experiencing distress. The
announcement and implementation of Federal Reserve lending facilities are enhancing the flow
of credit for industries across the economy.

We continue to monitor conditions closely, as certain industries are rebounding more quickly
than others. For example, after losing nearly 1 million construction jobs in April, nearly half of
those jobs returned in May. By contrast, retail lost over 2 million jobs in April and 16 percent of
those positions returned in May. We remain confident that the overall economy will continue to
improve dramatically in the third and fourth quarters.

Paycheck Protection Program

Turning to the PPP, the SBA and Treasury worked together to launch this unprecedented
program in only 6 days. In less than two months, the PPP is supporting the employment of
approximately 50 million workers and more than 75 percent of the small business payroll in all
50 states. This is an extraordinary achievement.

As you might expect with a program of this magnitude executed on a national scale in record
time, we initially experienced some complications. We resolved them quickly. To implement
the program, our teams have worked with members of Congress on a bipartisan basis to issue a
series of rules and guidance to provide clarity to members of the public, as well as borrowers and
lenders. By standing up the program quickly, we were able to support tens of millions of
workers who may have otherwise been laid off or furloughed.

Aside from the Administration’s implementation efforts, we have worked closely with members
of Congress in both parties to pass two subsequent pieces of critical legislation. We reached
agreements on a second round funding for over $300 billion and on providing businesses with
more time and flexibility to keep their employees on the payroll, and ensure their continued
operations, as we safely reopen. Thank you, Mr. Chairman, and the other members of this
Committee for your work in building this program that is helping workers and families
throughout our nation.

Other CARES Act Programs

I would note that while the PPP is a very important program, it is only one part of the CARES
Act—the single largest economic relief effort in history. Treasury has been hard at work:

      Economic Impact Payments: We have distributed nearly 160 million payments worth
       more than $260 billion in record time.

      Programs to Support Aviation and other Eligible Businesses: We have approved the
       disbursement of over $27 billion to more than 500 airlines and other businesses to
       preserve hundreds of thousands of jobs.

      Coronavirus Relief Fund: We have disbursed nearly all of the $150 billion appropriated
       for state, local, and tribal governments. In doing so, we have provided recipients with as
       much flexibility as possible under the statute.

      Federal Reserve Facilities: We have committed approximately $200 billion in credit
       support for Federal Reserve lending facilities under the CARES Act, money that is going
       to promote the flow of credit to businesses, households, and state and local governments,
       as well as to restore liquidity and funding to credit markets. The Federal Reserve, in
       consultation with Treasury, has modified the terms of the lending programs since they
       were announced in order to ensure broad access to credit and liquidity for American
       businesses. We have over $250 billion remaining to create or expand programs as
       needed.

Conclusion

I am proud of the work we have done with all of you. We will overcome the unprecedented
challenges before us together, and make sure that every American gets back to work as quickly
as possible. I look forward to your questions.


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