The Treasury Secretary Steven Mnuchin appeared at a hearing of the Senate Small Business Committee today, telling the Committee that he supports additional aid to large and small businesses that have been hit hardest by the coronavirus pandemic. “I definitely think we are going to need another bipartisan legislation to put more money into the economy,” he said at a Wednesday hearing of the Committee. “Whatever we do going forward needs to be much more targeted particularly to the industries and small businesses that are having the most difficulty reopening.” Mr. Mnuchin gave few specifics however, only stating that the additional aid could include tax credits or direct funding.
The Committee hearing focused much of its discussion on the Paycheck Protection Program (PPP), and its role as the centerpiece of the federal government’s response to the COVID-19 pandemic and the disruption it has caused to the economy. The PPP has distributed more than $500 billion in forgivable loans and Mr. Mnuchin told the Committee that he expects that most businesses will not be required to repay the funds. “I think the majority of this money is going to be forgiven in the next few months and that is our intent.”
Ms. Jovita Carranza, Administrator of the Small Business Administration (SBA) also reported to the Committee and faced questioning regarding the Economic Injury Disaster Loan (EIDL) program, a separate aid initiative aimed at small businesses. Ms. Carranza assured Senators that the SBA was working to make progress on the significant backlog of applications for the program. Small businesses have reported a lack of communication about the status of their EIDL applications, among other problems.
“I’m very pleased to announce that by next week all of the EIDL loans will be in the process in the loan portal,” Ms. Carranza told the Committee. “Those loans will be processed and we will be over with the EIDL. I’m really encouraged by that,” she added.
Senators urged both officials to investigate further efforts to provide more aid to struggling businesses, and suggested speeding up EIDL loans and supporting additional funding in the future. Senator Jeanne Shaheen (D-NH) expressed concern to Mr. Mnuchin that the unemployment rate was still too high, despite falling last month. Mr. Mnuchin agreed, saying “this is all going to be about getting people back to work.” Senator Tim Scott (R-SC) commented that “Survival was the key and the focus, but now we have to turn from survival to recovery.”
Senators had been requesting Ms. Carranza to appear to testify for several weeks and Wednesday’s session marked a rare appearance for the Administrator. Normally Mr. Mnuchin had been the primary public face of the PPP. The appearance by Ms. Carranza and Mr. Mnuchin likely resulted from a move by Congress last week to make it easier for the loans to turn into grants. That legislation lowered the percentage of the funds that must be spent on payroll to 60% from 75% and tripled the time frame borrowers have to use the funds to 24 weeks.
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