Treasury Secretary Steven Mnuchin identified priority areas for additional support as he urged Congress on Friday to work with the Trump administration to pass the phase 4 stimulus package by the end of the month.
Testifying before the House Committee on Small Business, Mnuchin called for lawmakers to act quickly to provide supplemental relief to further blunt the impact of the pandemic on America’s economy, including more funding for the Paycheck Protection Program (PPP).
“A next phase of relief should extend the PPP, but on a more targeted basis for smaller companies and those that have been especially hard hit by the pandemic, such as restaurants, hotels, and other travel and hospitality businesses,” Mnuchin said.
Mnuchin said America’s economy continues to recover from the pandemic, noting a labor market recovery that has come in far above expectations.
“For the second month in a row, the jobs report vastly exceeded forecasts, with a record gain of nearly 5 million jobs when experts predicted 3 million,” Mnuchin said. “This brings our two-month total gain to approximately 8 million jobs, meaning that 34 percent of jobs lost due to the pandemic have been recovered.”
He credited bipartisan efforts among lawmakers and the Trump administration to provide liquidity quickly to workers and markets.
“The PPP is keeping tens of millions of employees connected to their jobs. Economic Impact Payments are also helping millions of families and workers to make it through these challenging times,” he said.
Still, with unemployment at historically high levels, Mnuchin said there was a need to monitor economic conditions closely and identify areas in need of more support.
“Certain industries, such as construction, are recovering quickly, while others, such as retail and travel, are facing longer-term impacts and will require additional relief,” he told lawmakers.
Mnuchin said talks would continue on a phase four relief bill that he said he hopes will clear Congress by the end of the month.
“We anticipate that additional relief will be targeted 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.”
The treasury secretary also said policymakers should consider blanket forgiveness—coupled with some form of fraud protection—for all smaller businesses that received Paycheck Protection Program loans.
Some business and banking groups have pushed for blanket forgiveness for all loans under $150,000, arguing the requirements for applying for forgiveness under the program are too complex.
Roughly $100 billion remains in the PPP, a forgivable loan program created by the initial stimulus package, which is set to expire on Aug. 8.
Mnuchin added that he would also support applying some sort of “revenue test” to future PPP loans to make sure the remaining funds go to businesses that need it the most. The PPP has come under criticism after wealthy and larger companies secured loans under the program, which was billed as relief for small businesses.
“This time, we need to have a revenue test and make sure that money is going to businesses that have significant revenue declines,” he said.
He also said he would support efforts to set aside a portion of remaining PPP funds for minority-owned businesses, amid concerns from some lawmakers that those businesses were struggling to secure funding.
Mnuchin also said the next aid bill to provide a “significant amount of money” to help K-12 schools reopen safely.
The Trump administration has been pushing for schools to reopen in the fall, which would allow many parents to return to work and help revive the economy.
Reuters contributed to this report.