Statement of Secretary Steven T. Mnuchin, Department of the Treasury, Before the Committee on Small Business (July 17, 2020)

Summary

Statement of Treasury Secretary Steven T. Mnuchin before the House Committee on Small Business on July 17, 2020 on the Paycheck Protection Program and the economic recovery. He says the SBA had approved nearly 5 million PPP loans for more than $517 billion supporting over 50 million workers, with 27 percent of funds going to low- and moderate-income communities, and that a next phase should extend the PPP on a more targeted basis for smaller and hard-hit businesses. He reports nearly 160 million Economic Impact Payments totaling nearly $270 billion, $32 billion under the Payroll Support Program for aviation jobs and almost $200 billion in credit support for Federal Reserve lending facilities. He also describes Treasury's release of PPP loan-level data and its work with oversight bodies.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

                          Statement of Secretary Steven T. Mnuchin
                                 Department of the Treasury
                           Before the Committee on Small Business
                           United States House of Representatives
                                        July 17, 2020

Chairwoman Velázquez, Ranking Member Chabot, and members of the Committee, I am pleased
to join you today to discuss how the Department of the Treasury and the Small Business
Administration (SBA) are working together to provide relief to businesses and their workers
through the Paycheck Protection Program (PPP). We remain committed to making sure that
every American gets back to work as quickly as possible.

Economic Recovery

America’s economy continues to recover from the challenges posed by the COVID-19
pandemic. For the second month in a row, the jobs report vastly exceeded forecasts, with a
record gain of nearly 5 million jobs when experts predicted 3 million. This brings our two-
month total gain to approximately 8 million jobs, meaning that 34 percent of jobs lost due to the
pandemic have been recovered. Recent improvements in unemployment insurance claims
suggest that the job market has continued to strengthen in July.

While the unemployment rate is still historically high, we are seeing additional signs that
conditions will improve significantly in the third and fourth quarters of this year. The Blue Chip
Report is forecasting that our GDP will grow by 18 percent annualized in the third quarter, and
by 7 percent in the fourth quarter.

The U.S. Chamber of Commerce reported last month that 79 percent of small businesses are at
least partially open already, and half of the remaining businesses are opening very soon. Retail
sales rose in May by 18 percent, more than double the expected rise of 7 percent, and by 7.5
percent in June, higher than expectations and 1.1 percent higher than June 2019. Investors and
businesses have historically high cash positions, the highest level since 1992, indicating that
private capital is readily available to re-invest into commercial operations as communities re-
open.

We are in a strong position to recover because the Trump Administration worked with Congress
to pass legislation on an overwhelmingly bipartisan basis and provide liquidity to workers and
markets in record time. In particular, the PPP is keeping tens of millions of employees
connected to their jobs. Economic Impact Payments are also helping millions of families and
workers to make it through these challenging times.

We are monitoring economic conditions closely. Certain industries, such as construction, are
recovering quickly, while others, such as retail and travel, are facing longer-term impacts and
will require additional relief. We are also sensitive to the fact that certain areas of the country
are experiencing increased numbers of cases of the virus. The Coronavirus Task Force, working
collaboratively with state and local officials, is helping to ensure that people can work safely in
this environment. We look forward to continued conversations with you and other members of
Congress to address these critical issues.

Paycheck Protection Program

Turning to the PPP, the SBA and Treasury worked together to launch this unprecedented
program in record time. The SBA has approved nearly 5 million small business loans for more
than $517 billion to support the employment of over 50 million workers and greater than 80
percent of the small business payroll across the country. This is an extraordinary achievement.
We are particularly pleased that loans were broadly distributed and made across diverse areas of
the economy, with 27 percent of the funds going to low- and moderate-income communities,
which is in proportion to their percentage of the population.

As you might expect with a program of this magnitude, executed on a national scale very rapidly,
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 three subsequent pieces of critical legislation, including the
recent extension of time for borrowers to apply. We also reached agreements on a second round
of 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.

I look forward to continuing our bipartisan efforts. A next phase of relief should extend the PPP,
but on a more targeted basis for smaller companies and those that have been especially hard hit
by the pandemic, such as restaurants, hotels, and other travel and hospitality businesses.

Transparency

The Treasury Department is implementing the CARES Act with transparency and accountability.
We have released a significant amount of information on our website. We are also providing
information on the government-wide reporting site USAspending.gov, and in updates to
Congress. We are cooperating with various oversight bodies, including three inspectors general,
the new Congressional Oversight Commission, congressional committees of jurisdiction, the
Pandemic Response Accountability Committee, and the Government Accountability Office
(GAO).

Regarding the PPP, Treasury and SBA have regularly released data regarding loans, including
lender sizes, loan sizes, lending by state, lending by industry, funds remaining, and other
information. We released PPP loan-level data in a way that struck the appropriate balance of
providing public transparency while protecting the payroll and personal income information of
small businesses, sole proprietors, and independent contractors. In addition to these public
releases, we have released the complete set of loan-level data to the GAO, this Committee, and


                                                2
other congressional committees to assist them with carrying out their legislative responsibilities,
while maintaining the confidentiality of nonpublic personally identifiable information and
commercially sensitive business information.

On other programs, Treasury and the Internal Revenue Service have made data and information
regarding the millions of Economic Impact Payments available on their websites and to the
GAO. The Department has also posted on Treasury.gov documents and information about all of
the Payroll Support Program Agreements we have entered into, loans for air carriers and other
eligible businesses, and Coronavirus Relief Fund payments to States, local governments, and
Tribes.

We are also pleased that the Federal Reserve has announced plans to add to its existing public
disclosures about its liquidity facilities, by posting additional information on its website. Federal
Reserve Chairman Powell and I have had very productive initial discussions with the four
members of the Congressional Oversight Commission, and we look forward to continuing to
work with them.

CARES Act Program Implementation

In addition to the PPP, Treasury has been hard at work implementing other significant CARES
Act programs.

   •   Economic Impact Payments: We distributed nearly 160 million payments totaling
       nearly $270 billion in record time.

   •   Programs to Support Air Carriers and Other Eligible Businesses: We have
       successfully implemented the Payroll Support Program, which makes $32 billion in
       financial assistance available to support hundreds of thousands of aviation jobs. In the
       last two weeks, we announced a significant loan under the CARES Act to support tens of
       thousands of jobs critical to maintaining national security, as well as anticipated
       agreements on more than $20 billion of loans to air carriers. These funds will ensure that
       these strategically important industries will remain intact, viable, and poised to return to
       growth.

   •   Coronavirus Relief Fund: From this $150 billion fund, we have disbursed all of the
       amount appropriated for state and local governments and nearly all of the amount for
       tribal governments. In doing so, we have provided recipients with as much flexibility as
       possible under the statute. We are in the process of reaching out to recipients to receive
       updates on their current uses of the funds.

   •   Federal Reserve Facilities: We have committed almost $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


                                                  3
       businesses. We have over $250 billion remaining to create or expand programs as
       needed.

Phase Four

We will be having bipartisan conversations about supplemental relief legislation and hope
Congress will pass an additional package by the end of this month. Treasury has already been
entrusted with a tremendous amount of funding to inject into the economy. We are closely
monitoring the results of these efforts, and we are seeing conditions improve. We anticipate that
additional relief will be targeted to certain industries, smaller businesses, and lower- to middle-
income families that have been especially hard-hit by the pandemic. Our focus will be on jobs
and getting all Americans back to work.

Conclusion

I would like to thank the members of the Committee for working with us to help the American
people. I would be pleased to answer any questions you may have.




                                                 4


File and source

File

ppr-int-e7b7be729fac78cf-Meeting-Oversight-of-the-Small-Business-Administration-and-Department-of-Treasury-Pandemic-bdcc26c411.pdf

Size

58,012 bytes

SHA-256

a55a48079f7f9205d3a2b2856d820c785b1faf827a0e5a6ec658d271262f8dc9

Our copy

ppr-int-e7b7be729fac78cf-Meeting-Oversight-of-the-Small-Business-Administration-and-Department-of-Treasury-Pandemic-bdcc26c411.pdf

Original

smallbusiness.house.gov