Steven Mnuchin Says White House Considering Second Round of Stimulus Payments
June 11 2020 - 2:40PM
Dow Jones News
By Kate Davidson and Richard Rubin
WASHINGTON -- The Trump administration is weighing a second
round of stimulus payments for Americans as part of an
economic-relief package Congress is likely to consider next month,
Treasury Secretary Steven Mnuchin said Thursday.
Mr. Mnuchin said he had discussed with President Trump the idea
of additional stimulus payments, though no decision had been made
yet on whether to advocate for them in the next bill.
"It's something that we're very seriously considering," he told
reporters during an online question-and-answer session
Thursday.
Congress provided an initial round of onetime payments of $1,200
for most adults and $500 for children under age 17 as part of the
Cares Act enacted in March. The Internal Revenue Service said it
has distributed payments to all eligible Americans for whom it has
sufficient information, totaling $267 billion.
That money helped households fill holes in their budgets and
propped up consumer spending as the economy struggled in April and
May. The House of Representatives voted for a second round of
payments last month as part of its $3.5 trillion economic-relief
package. Those payments would be larger, offering $1,200 each for
up to three children instead of $500. The Democratic proposal also
covers groups left out of the first round of payments, such as
college students, adult dependents and households that include
undocumented immigrants.
Mr. Mnuchin also said it is extremely unlikely that parts of the
U.S. economy will need to shut down again, despite a surge in
coronavirus cases in some parts of the country. Mr. Mnuchin said he
expected officials will make sufficient medical progress between
now and the end of the year, including more widespread testing and
effective viral treatments, that will support safe reopening of the
economy.
"Could there be some rare, extreme scenario that occurs that,
based upon medical advice, the president does" close down the
economy, he said. "I think that's extremely unlikely."
The Trump administration and lawmakers are weighing how much
additional support to provide in the months ahead, a decision that
depends on how quickly the U.S. economy snaps back this summer.
Recent data, including an encouraging May jobs report and steadily
falling initial jobless claims, suggest an upturn has already
started, though many economists expect a long, slow recovery.
Mr. Mnuchin emphasized that economic relief in the next measure
should be targeted at industries and businesses that face a more
difficult recovery. But his comments suggest the administration is
sympathetic to the idea of more aid for struggling workers and
families, despite concerns from some Republicans over additional
spending that would push deficits even higher.
Congress has already provided about $3.3 trillion of spending
and tax breaks, including the stimulus payments, emergency
small-business loans and enhanced unemployment benefits.
Mr. Mnuchin said it was premature to speculate on the overall
size of the next relief package.
"Before we rush back and spend more money, whether that's a
trillion dollars or whether that's more, we want to make sure we're
careful in knowing how much more we need to spend," Mr. Mnuchin
said.
One potential flashpoint in negotiations over the next bill is
the extra $600 in weekly jobless benefits set to expire at the end
of July. The additional payments were aimed at covering workers'
lost paychecks while businesses across the country were closed.
Many workers have made more money from benefits than they did on
the job, and Republicans have warned it might discourage them from
returning to work.
"If we continue enhanced unemployment, we're obviously going to
need to fix that," Mr. Mnuchin said, "so that we don't end up in a
situation where workers are paid more on unemployment than they are
to go back to work."
"I'm very focused on how do we create the right motivation," he
added.
Mr. Mnuchin said the use of retention tax credits enjoyed broad
support in the Cares Act. "I could see expanding that in some type
of rehire tax credit that is perhaps even more impactful," he
said.
Congress included the retention credit in the March legislation
and it is effectively a government wage subsidy. It covers up to
50% of wages and benefits up to $10,000 for employers suffering
from closures or significant revenue declines. Smaller companies
get the break for all workers; larger firms get it for paying
people not to work.
The House legislation includes a $194 billion expansion of the
credit, and it has bipartisan support. That version would cover 80%
of costs up to $45,000 and add a credit for fixed expenses such as
rent.
Mr. Mnuchin also said the Treasury is considering easing the
criteria for participation in a loan program aimed at companies
regarded essential to national security. The Treasury is focused on
processing applications it has received so far for the $17 billion
loan pool, which Congress authorized in the Cares Act, but is
considering whether to broaden the definition of which companies
are deemed critical to national security.
"If for whatever reason we don't have enough demand, we may go
back to Congress and ask them to reauthorize that for other areas,"
he said.
Write to Kate Davidson at kate.davidson@wsj.com and Richard
Rubin at richard.rubin@wsj.com
(END) Dow Jones Newswires
June 11, 2020 14:25 ET (18:25 GMT)
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