Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell will testify remotely before the Senate on Tuesday (May 19) regarding the disbursement of coronavirus relief money.
The 10 a.m. ET hearing before the Senate Banking, Housing and Urban Affairs Committee is the first oversight review of the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March.
The Senate hearing comes a day after the newly-created congressional oversight panel released its first report on Monday (May 18) reviewing the supervision of small business loan programs. The report found that some of the $500 billion earmarked for struggling businesses, industries and local government have not yet been disbursed by the Treasury Department.
In particular, none of the $46 billion intended for the airline industry and businesses related to national security was disbursed, according to the report. Additionally, the Main Street lending program was not yet launched and the terms were changed to include businesses with up to 15,000 employees.
“Accordingly, the Treasury has not publicly reported and disclosed information regarding the loans, as it must do under the CARES Act,” said the report.
It is anticipated that Mnuchin will face tough questions from senators regarding the Payroll Protection Program (PPP) for small businesses, according to numerous media reports.
Mnuchin said in prepared testimony that so far, $240 billion was disbursed to provide direct relief to millions of Americans. In addition, almost $150 billion went to states, local, and tribal governments. Another $454 billion supported the Federal Reserve lending facilities.
“We expect economic conditions to improve in the third and fourth quarters,” Mnuchin said.
In his prepared remarks, Powell said the Fed will outline who received money and at what interest rates, including the names of the businesses.
“We are deeply committed to transparency, and recognize that the need for transparency is heightened when we are called upon to use our emergency powers,” Powell said.
At the end of April, economists warned that the economic downturn isn’t finished yet. The coronavirus pandemic triggered the biggest drop in the U.S. economy since the Great Recession, and the worst is still to come.
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