US Treasury Secretary Steven Mnuchin has held out hope for a Congressional compromise on a second COVID-19 pandemic stimulus package.
Speaking before the House Financial Services Committee on Tuesday, Mnuchin and Federal Reserve Chairman Jerome H. Powell said an economic rebound from the pandemic slump depended on a replacement for March's $2.2 trillion CARES Act.
“The president and I remain committed to providing support for American workers and businesses,” Mnuchin said. “I believe a targeted package is still needed, and the administration is ready to reach a bipartisan agreement.”
The treasury chief said President Donald Trump supported an extension of the Paycheck Protection Programme of loans to businesses to avoid laying off staff.
And he said the president backed redirecting $200 billion earmarked for Federal Reserve lending to medium-sized businesses to other programmes.
Powell acknowledged that most of the $600 billion for the 'Main Street Lending Program' had yet to be lent, with just 230 loans worth around $2 billion already made or in process.
Responding to a question from Democratic representative Maxine Waters on whether the programme could be expanded to help more firms, Mnuchin lemanted that "there's not much more we can do" and said he would rather Congress vote to "reallocate that money to better use.”
But Powell noted that “a big part of the good economic news that we have had results from the fiscal support that came with the CARES Act,” warning that “we don’t really know what will happen” if Congress fails to pass a replacement.
The Democrat-controlled House of Representatives and the Republican-held Senate have been deadlocked over the HEROES Act. Republicans will not agree to $1 trillion in aid to city and state governments, while Democrats are blocking $200 billion in help for small businesses.