Treasury Secretary Steve Mnuchin said the U.S. needs additional fiscal stimulus -- particularly for businesses struggling to reopen from coronavirus-related closures -- even as he said the economy has started to recover.
“I do think the economy is going to rebound significantly, but there is still significant damage in parts of the economy,” Mnuchin told the Senate Small Business and Entrepreneurship Committee on Wednesday.
A fourth round of fiscal stimulus should include help for travel, retail and leisure businesses, and possibly more cash for American families, Mnuchin said Wednesday. The Trump administration has discussed a capital gains tax cut but Mnuchin indicated it’s not the best approach.
Congress hasn’t yet reached any agreement on another round of stimulus as Democrats demand assistance for states whose budgets have been hit by declining revenue.
After social distancing to curb the pandemic collapsed the U.S. economy in March, lawmakers approved as much as $6 trillion in stimulus to help it recover. More than 40 million people lost their jobs through March and April as the government sought to contain the outbreak.
Bipartisan Praise
The unprecedented fiscal and monetary support contributed to a surprise drop in unemployment last month as the economy began to reopen. Mnuchin won bipartisan praise during a Senate hearing on Wednesday for helping the U.S. dig out of the crisis.
“I saw Secretary Mnuchin, many hours day and night, working around the clock,” said Maria Cantwell, a Washington Democrat.
New Jersey Democrat Cory Booker said “hallelujah” when Mnuchin agreed to ease restrictions on small business loans for those with prior felony convictions. Republican James Risch of Idaho said the Treasury chief made history in his efforts to aid small businesses.
Still, lawmakers pressed Mnuchin on proposals for the next round of stimulus as the jobless rate remains at 13.3%.
Struggling to Reopen
Mnuchin called for targeted assistance for industries and small businesses that are struggling to reopen because of reduced capacity and additional spending due to Covid-19. He said retailers lost more than 2 million jobs in April, but just 16% of those workers returned in May.
“We’re going to use all of our fiscal tools to work with Congress” to “restore this economy to where it was,” Mnuchin said. “I definitely think we are going to need another bipartisan legislation to put more money into the economy.”