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The Senate Banking Committee is examining spending under the massive CARES law for the first time, which Congress approved in March to provide assistance to individuals, businesses and local governments affected by the coronavirus pandemic.
Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin Expected To Be Pressed By Senators About Their Management Of Specific Aspects Of The About $ 2 Trillion Relief Program At The Hearing away from Tuesday.
The Senate hearing is scheduled to start at 10:00 am ET. Watch it live here.
Powell said that Congress could and should provide more economic assistance to help businesses and individuals cope with the economic fallout from the pandemic.
“We have the ability to borrow at low rates,” said Powell. 60 minutes on Sunday. “This is the time when we can use this force to our long-term advantage. “
Mnuchin, however, has been less open to new spending, saying federal lawmakers should wait to assess the effects of the four measures already approved by Congress before allocating more funds.
The hearing comes a day after a four-member panel appointed by Congress reported that none of the $ 46 billion allocated in the CARES law for loans and loan guarantees to the airline industry had been spent and relatively little of the $ 454 billion business and state and local government loan program had been disbursed by the Federal Reserve Board.
In his prepared testimony, Mnuchin seems to dispute the conclusions of the supervisory committee. He said the Treasury “committed up to $ 195 billion in credit support under the CARES law. We have the remaining $ 259 billion to create or develop programs as needed, while continuing to closely monitor various economic sectors. ” He also says that $ 25 billion in payroll support has been provided to the airline industry.
Democrats on the panel sent a letter to Powell and Mnuchin on Monday asking them to “further expand loan eligibility conditions, including quickly adopting a viable option for not-for-profit organizations facing acute challenges due to the virus “, and provide greater flexibility on the loan terms.
Senator Mark Warner, D-Va., Wrote that “all taxpayers will be better off as more businesses can access affordable financing, keeping doors open, paid workers and avoiding costly bankruptcies , during the rest of the public health stoppage. ”
Powell, according to his prepared testimony, will tell the panel that the Fed has made changes, including reducing the minimum amount and increasing the maximum amount of loans that companies can apply for, changes which he says “should help the program meet the needs of a wider range of employers who may need interim financing to support their operations and economic recovery. We will continue to adjust the facilities as we learn more, “he said.