Categories: Loans

Warren, Mnuchin Clash Over PPP

In the most contentious moments of the Senate Banking Committee’s inquiry into the $2 trillion CARES Act on Tuesday (May 19), Sen. Elizabeth Warren clashed with Treasury Secretary Steven Mnuchin over the Paycheck Protection Program (PPP).

“You’re in charge of half a trillion dollars, you're boosting your Wall Street buddies and you are leaving Americans behind,” Warren told the Secretary.

Mnuchin fired back, “Senator Warren, that’s a very unfair characterization.”

During Warren’s five-minute allotment for questions and answers, she asked Mnuchin multiple times if he will require companies that received PPP funds to keep those employees on the payroll past the end of the program this summer.

“I take great pride in the bipartisan support on these bills, and those specifics were negotiated on a bipartisan basis very clearly in each one of these programs, and it is our intent ... to fulfill the spirit and the details of the law…” Mnuchin said.

Dissatisfied with the response, Warren said, “I'm sorry, Secretary Mnuchin, that's not quite right. The law specifically gives you the specific authority to determine the terms of these loans and who’s going to be able to get them. I have a very simple question for you. You say the economy is going to improve; it’s going to take jobs in order for that to happen, so what I want to know is, are you going to require companies from this half-trillion-dollar slush fund to have to keep people on payroll? It's a simple question, yes or no.”

In response, Mnuchin said the administration's No. 1 objective is to keep people employed.

At that, Warren said, “Good, so are you going to require companies to keep employees on who are getting taxpayer money? That's my question.”

Mnuchin insisted that lawmakers negotiated limits on employee compensation, dividends and buybacks, and there’s a provision that the government expects businesses to use their best efforts to support jobs.

“I take it your answer to my question on whether or not you're going to require as part law that people be kept on, is no,” Warren said.

She used her last minute to ask the secretary if he would create a process that ensures executives are held personally liable and are subject to criminal penalties if they provide false information and/or misuse bailout funds.

“We will review that,” Mnuchin said.

“What you’re saying is that you won’t do it,” Warren replied.

Sen. Sherrod Brown, an Ohio Democrat, didn’t make it any easier for Mnuchin when he asked how many workers will die if we send people back to work if it’s not safe.

“I assure you the task force is using the best medical advice ... no workers will die and your characterization is unfair,” Mnuchin said.

Also on Tuesday (May 19), perhaps anticipating that Mnuchin would not take action, Warren asked the Federal Reserve Bank to create strict rules for corporate recipients of U.S. bailout funds and to prosecute executives who provide fraudulent information or misuse funds.

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