Mnuchin urges swift aid bill; ex-Fed chairs want bigger deal

WASHINGTON (AP) – United States (US) Treasury Secretary Steven Mnuchin urged Congress on Friday to quickly enact a new pandemic relief package targetting hardest-hit swaths of the economy, as lawmakers race to stand up federal aid in the face of the latest spike in coronavirus cases across much of the Sun Belt and persistent severe unemployment.

Deadlines loom as the extra USD600 weekly benefits provided by the federal government to tens of millions of unemployed workers are set to expire July 31. Mnuchin, the Trump administration’s chief negotiator on economic relief, told a House hearing that Congress should pass a new rescue package by the end of the month. Set for partisan negotiations next week, it would be the fifth virus relief bill since the spring, when Congress dispensed and US President Donald Trump approved nearly USD3 trillion in emergency aid.

“We anticipate that additional relief will be targetted to certain industries, smaller businesses and lower- to middle-income families that have been especially hard-hit by the pandemic,” Mnuchin said. “Our focus will be on jobs and getting all Americans back to work.”

With the economic picture bleak, former Federal Reserve (Fed) Chairs Ben Bernanke and Janet Yellen urged Congress to do more to help the economy deal with the devastating pandemic, such as extending increased unemployment benefits and providing assistance to hard-hit states and local governments, something many Republicans oppose.

The two former Fed leaders, making their first appearances on Friday before a congressional panel since leaving the central bank, praised the efforts already made by the Fed and Congress but said both should be ready to do more given the severity of the shock the economy has endured.

Democrats and Republicans on the committee clashed over the Trump administration’s response to the virus, what the next package of support should look like and whether schools should be required to re-open in the fall.

Yellen and Bernanke, in a joint statement, said the new measure should provide substantial support to state and local governments. The administration and many GOP members of Congress are arguing for spending restraint, saying the federal government should not be bailing out states.

But Yellen and Bernanke said, “The enormous loss of revenue from the recession, together with the new responsibilities imposed by the pandemic, has put state and local budgets deeply in the red.”

United States (US) Treasury Secretary Steven Mnuchin speaks during a House Small Business Committee hearing on Capitol Hill in Washington. PHOTO: AP