If and when there is a next federal coronavirus economic stimulus package it should be targeted to help deeply-impacted businesses like travel and leisure, Treasury Secretary Steven Mnuchin told Sen. Marco Rubio‘s committee Wednesday.
“We’re going to need more money to encourage businesses to rehire people, especially in areas that have been most impacted. So whether it’s travel, leisure, restaurants, you can’t get hotel capacity back up to speed without hiring people first,” Mnuchin said.
His comments came during a Senate Committee on Small Business & Entrepreneurship hearing Rubio chairs, looking at whether the small business programs in the first three coronavirus crisis economic stimulus packages were effective and enough.
Universally, and in bipartisan fashion, the committee members rhetorically high-fived one another and Mnuchin over the Paycheck Protection Program Rubio created along with Republican Sen. Susan Collins of Maine, and Democratic Sens. Ben Cardin of Maryland and Jeanne Shaheen of New Hampshire.
The PPP program, though it has been criticized for glitches that have provided money to big businesses and left uncertainty about which businesses might have loans forgiven, has dolled out $511 billion to 4.5 million small businesses nationwide in a matter of weeks. Rubio called it an “extraordinary effort” and Cardin called it “a proud moment” for the Senate.
“The bumps in the road were and are the price to pay, unfortunately, for a program that in hindsight we now know is one of the most successful programs that the government has ever done to rescue the economy,” Rubio said.
There was less praise for another small business program, the Economic Injury Disaster Loan program, which has received $50 billion in federal stimulus money from one of the three CARES Acts that Congress approved and President Donald Trump signed in a flurry of bailout activity in March and April.
That package was geared toward very small businesses, with four or fewer employees, and sole proprietors. It has been slow to deliver and many committee members expressed annoyance at how the Small Business Administration is running it. Small Business Administration Administrator Jovita Carranza essentially acknowledged their complaints.
But the key issue on everyone’s minds seemed to be whether the three bailout bills had delivered enough, and whether and when a next round of stimulus would be needed. House Democrats approved a $3 trillion fourth bill in mid-May, but it was dead on arrival at the Senate.
Mnuchin talked about negotiations over the next few weeks, and possibly over the next 30 days.
“I definitely think we are going to need another bipartisan legislation to put more money into the economy. I think as we said we don’t want to rush into that. Because at this point we want to be careful in seeing how the money is in the economy,” he said. “And two, I think we need to be much more targeted at this point… particularly to the industries and small businesses that are having the most difficulty in reopening as a result of COVID-19.”
Mnuchin agreed with forecasts of a strong rebound late this year, but cautioned the committee that “there is significant damage in parts of the economy.