Tag Archives: Treasury Secretary Steven Mnuchin

Mnuchin, Powell hone in on need to aid U.S. small businesses

By Howard Schneider

WASHINGTON (Reuters) – Top U.S. economic officials on Tuesday urged Congress to provide more help for small businesses amid a surging coronavirus pandemic and concern that relief from a vaccine may not arrive in time to keep them from failing.

“These businesses cannot wait two or three months,” Treasury Secretary Steven Mnuchin said during a hearing before the Senate Banking Committee, urging lawmakers to repurpose funds he is clawing back from other Federal Reserve loan programs to put perhaps $300 billion into grants for struggling businesses.

Mnuchin’s decision to shut those emergency programs at the end of this month was the focus of partisan bickering at the hearing, with Republicans agreeing that other forms of help are more appropriate now that a vaccine is in view, and Democrats arguing the Fed programs should be left in place until the economic recovery is more complete.

But there was broader agreement that the next few weeks could be critical in determining whether the country’s better-than-expected recovery can be coaxed along until the impact of the vaccine is felt – or will weaken in the meantime as the virus spreads, and some families begin to run out of cash.

Fed Chair Jerome Powell, speaking at the same hearing, said he agreed that grants would be more appropriate at this point to help at-risk businesses and families survive the winter.

“People that are in public-facing jobs, in public-facing industries – they may see the light at the end of the tunnel the middle of next year … They may need more help to get there,” Powell said, referring to restaurants, hotels and entertainment venues that have been the hardest hit by the pandemic.

Job losses in those industries have fallen most heavily on women and minorities.

“Some of these businesses – what they need is fiscal policy, a grant, to get through this last bit of the pandemic, rather than borrowing more,” Powell said.

The Fed chief’s comments shifted attention from the looming Dec. 31 end of Fed emergency programs established early in the pandemic to keep credit flowing to small businesses and local governments, and toward ways to fill the cracks beginning to show in the U.S. recovery.

In the medium term, with a vaccine on the horizon, there is “upside risk,” Powell said, but substantial uncertainty in the meantime about how much longer some families can hold out.

After weeks of deadlock over further government spending for pandemic relief, there may be renewed momentum towards some sort of deal.

(Reporting by Howard Schneider; Editing by Tom Brown, Chizu Nomiyama and Paul Simao)

Pelosi rejects Trump COVID-19 aid offer, dimming hopes of quick deal

WASHINGTON (Reuters) – U.S. House Speaker Nancy Pelosi rejected President Donald Trump’s latest offer on COVID-19 stimulus on Tuesday, in the latest sign that a bipartisan deal on coronavirus relief remains unlikely ahead of the November election.

In a letter to colleagues, Pelosi laid out what Democrats view as the shortcomings of a $1.8 trillion White House stimulus proposal that has also met resistance from Republicans in the U.S. Senate who say it is too large.

“Tragically, the Trump proposal falls significantly short of what this pandemic and deep recession demand,” Pelosi said. She also described the offer made last week by Treasury Secretary Steven Mnuchin as “one step forward, two steps back.”

But Pelosi said she remained hopeful for a deal and appeared to leave the door open to further talks with Mnuchin: “Significant changes must be made to remedy the Trump proposal’s deficiencies. Updates will continue.”

The letter made it clear that Democrats view the White House offer as deficient on state and local government aid, COVID-19 testing and tracing, rental assistance, worker safety, child care, relief for small employers and other areas.

“The president only wants his name on a check to go out before Election Day and for the market to go up,” the top Democrat in Congress wrote. “The president’s attitude is shameful, when the need for immediate and meaningful action could not be more urgent.”

House Democrats formally received the latest White House offer over the weekend, Pelosi said, days after Trump withdrew from negotiations and then decided to resume talks.

With their latest proposal facing resistance from both Democrats and Republicans, Trump administration officials on Sunday called on Congress to pass a stripped-down stimulus bill.

(Reporting by Doina Chiacu and David Morgan; Editing by Lisa Lambert and Chizu Nomiyama)

Fed says Powell has been working from home, observing mask and distance protocols

WASHINGTON (Reuters) – Federal Reserve Chair Jerome Powell has been working from home while also following masking and social distancing protocols when in public, and has not felt it necessary to take a coronavirus test, the Fed said Friday in response to inquiries following the news that President Donald Trump has contracted COVID-19.

A Fed spokesperson said in addition that Powell had not been in contact with anyone known to have tested positive for the virus.

Fed officials have been working remotely since the start of the coronavirus pandemic, but Powell has traveled occasionally to Capitol Hill, most recently last week, for hearings on Fed policy and the response to the health crisis.

He typically has worn a mask during those appearances, and Fed officials in general have urged people to do the same as a way to tamp the spread of the disease and allow economic activity to safely resume.

News that Trump, first lady Melania Trump, and others had been infected with the coronavirus touched off a wave of announcements from other officials about their health status.

Powell has met infrequently with Trump during his time as Fed chair, though he has been holding frequent talks during the crisis with Treasury Secretary Steven Mnuchin. A Treasury spokesperson said Friday Mnuchin had tested negative.

(Reporting by Howard Schneider; Editing by Andrea Ricci)

Fed’s Powell, Mnuchin see promise in reallocating unused aid

By Ann Saphir and Howard Schneider

(Reuters) – Hundreds of billions of dollars in unused funds from a $2.3 trillion coronavirus aid package could be reallocated to help U.S. households and businesses, Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin said on Thursday.

About $200 billion in money allocated to the Treasury to backstop U.S. central bank loans remains uncommitted, Powell and Mnuchin said in a hearing before the Senate Banking Committee.

Mnuchin also pointed to the $130 billion left in the now-expired Paycheck Protection Program to help small businesses, funds he said would his first priority to get approval from Congress to tap and send to needy firms.

In addition, Powell, in response to a question, said most of the $75 billion allocated to the Fed’s largely untapped Main Street Lending Program remains unused.

The focus on reallocating those sums has emerged as Congress has remained deadlocked over providing new fiscal relief that Powell said could make the difference between continued recovery and a much slower economic slog.

While households are spending what’s left of their stimulus checks and unemployment benefits, “the risk is they will go through that money, ultimately, and have to cut back on spending and maybe lose their home or their lease,” Powell said.

“That is the downside risk of no further action. We don’t see much of that yet, but it could well be out there in the not-too-distant future,” Powell said in the last of three hearings in which he testified before Congress this week.

Asked by Republican Senator Mike Crapo, the committee chair, what the best use of the unused funds might be, Powell said it could be spent to help small businesses and households.

Prospects for new fiscal aid are dim less than six weeks before the Nov. 3 presidential election.

(Reporting by Howard Schneider, Ann Saphir; Editing by Paul Simao)

U.S., China hold ‘constructive’ trade talks in Beijing

China's Vice Premier Liu He shakes hands with U.S. Treasury Secretary Steven Mnuchin as Yi Gang, governor of the People's Bank of China (PBC) and U.S. Trade Representative Robert Lighthizer stand next to them as they pose for a group photo at Diaoyutai State Guesthouse in Beijing, China March 29, 2019. Nicolas Asfouri/Pool via REUTERS

By Michael Martina and Philip Wen

BEIJING (Reuters) – U.S. officials held “constructive” talks in Beijing, Treasury Secretary Steven Mnuchin said on Friday, concluding the latest round of dialogue with China aimed at resolving the bitter trade dispute between the world’s two largest economies.

Mnuchin and U.S. Trade Representative Robert Lighthizer were in the Chinese capital for the first face-to-face meetings between the two sides since President Donald Trump delayed a scheduled March 2 hike in tariffs on $200 billion worth of Chinese goods, citing progress in negotiations.

“@USTradeRep and I concluded constructive trade talks in Beijing,” Mnuchin said on social media network Twitter.

“I look forward to welcoming China’s Vice Premier Liu He to continue these important discussions in Washington next week,” he added, but gave no details.

Earlier, he told reporters U.S. officials had a “very productive working dinner” on Thursday. He did not elaborate and it was not immediately clear with whom he had dined.

Trump imposed tariffs on $250 billion of Chinese imports last year in a move to force China to change the way it does business with the rest of the world and to pry open more of its economy to U.S. companies.

Though his blunt-force use of tariffs has angered many, his push to change what are widely viewed as China’s market-distorting trade and subsidy practices has drawn broad support.

Lobbyists, company executives, and U.S. lawmakers from both parties, have urged Trump to not settle simply for Beijing’s offers to make big-ticket purchases from the United States to help reduce a record trade gap.

LOST IN TRANSLATION?

Neither side immediately offered details on the latest talks, and the U.S. delegation was expected to leave Beijing on Friday evening without releasing a formal statement.

Mnuchin and Lighthizer greeted a waiting Liu at the Diaoyutai State Guest House just before 9 a.m. (0100 GMT), and in two brief appearances before journalists, the three mingled and joked with members of the opposite teams.

Trade watchers had anticipated the scope of this round of talks, which wrapped up about 24 hours after the U.S. delegation arrived, to be quite narrow, but that both countries hoped to signal they were working hard toward a resolution.

Reuters reported previously that the two sides were negotiating written pacts in six areas: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.

It was unclear how much progress was made on the phrasing of those agreements, but earlier in the week a U.S. administration official told Reuters that Lighthizer and Mnuchin were “literally sitting there going through the texts”, a task typically delegated to much lower levels.

One person with knowledge of the talks said “translation is definitely an issue”, referring to discrepancies between the Chinese and English-language versions.

On Thursday, Premier Li Keqiang said Beijing would sharply expand market access for foreign banks and securities and insurance companies, fuelling speculation that China may soon announce new rules allowing foreign financial firms to increase their presence.

White House economic adviser Larry Kudlow said the United States may drop some tariffs if a trade deal is reached, while keeping others in place to ensure Beijing’s compliance.

“We’re not going to give up our leverage,” he told reporters in Washington on Thursday.

‘THERE ARE GOING TO BE PROBLEMS’

Many have expressed skepticism whether whatever deal they reach will end the trade war once and for good.

“Whatever implementation mechanism China agrees to, whether it is monthly or quarterly meetings or other check-ins, there are going to be problems,” James Green, a senior advisor at McLarty Associates who until August was the top USTR official at the embassy in Beijing, told Reuters.

“Either the purchases are going to be off, or the market access is not going to be there. And then the question is, when do you consider putting tariffs back on?” he added. “The trade issue is not going to be put to bed.”

Trump’s demands include an end to Beijing’s practices that Washington says result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies.

U.S. companies say they are often pressured into handing over technological know-how to Chinese joint venture partners, local officials or regulators as a condition for doing business in China.

The U.S. government says technology is often subsequently transferred to, and used by, Chinese competitors.

The issue has proved tough for negotiators as U.S. officials say China has previously refused to acknowledge the problem exists to the extent alleged by the United States, making it hard to discuss resolution.

China says its laws enshrine no requirements on technology transfers, which are a result of legitimate transactions.

(Reporting by Michael Martina and Philip Wen; Additional reporting by Jeff Mason in Washington; Writing by Ben Blanchard and Tony Munroe; Editing by Shri Navaratnam and Clarence Fernandez)