Sen. Brown presses Mnuchin: How many workers should give their lives to increase the GDP?
Ohio Democrat Sen. Sherrod Brown questions U.S. Secretary of the Treasury Steve Mnuchin and Federal Reserve Chair Jerome Powell during Senate Banking Committee hearing on the CARES Act.
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Treasury Secretary Steven Mnuchin was grilled Tuesday by several members of the Senate Banking Committee over the allocation of $500 billion in CARES Act money designated for economic relief amid the coronavirus pandemic -- but it was a clash with Ohio Sen. Sherrod Brown over the push to reopen the economy that generated the most attention.
The Democratic senator first noted the risks that essential workers take by putting their health on the line in providing necessary services for the country, and then accused the government -- in dramatic fashion -- of pushing the rest of the U.S. into equally dangerous situations without precautions.
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"How many workers will die if we send people back to work without the protections they need?" Brown asked.
Mnuchin responded that the administration is not looking to send anyone back to work without protection, but Brown immediately asked a similar, more pointed question, trivializing the economic benefits of reopening businesses.
“How many workers should give their lives to increase the GDP [gross domestic product] by half a percent?” Brown asked, adding: "How many workers should give their lives to increase the GDP or the Dow Jones by 1,000 points?”
Brown framed the debate over reopening as one of risking lives for the sake of making investors wealthy. But those pushing to reopen the economy typically point to the need to get everyday Americans back to work. Unemployment claims have pushed past 36 million since the crisis began.
Further, there was dire language in the Congressional Oversight Commission's report on the CARES Act, which was the intended subject of Tuesday's hearing.
"More than one-quarter of the U.S. economy has been idled -- a fall in output equivalent to what occurred between 1929 and 1933 during the Great Depression," the report's introduction stated.
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Mnuchin pushed back against Brown's premise, stating: "No worker should give their life to do that, Mr. Senator, and I think your characterization is unfair." He proceeded to describe how the Trump administration has "provided enormous amounts of equipment" and worked with state governors when Brown cut him off.
"Mr. Secretary, I’m not going to let you make a political speech," Brown said.
Later in the hearing, Mnuchin faced questions over whether the money the CARES Act provides for business loans would truly go to where it is needed to support such a comeback.
“Secretary Mnuchin, you have said that the jobs numbers will improve,” Sen. Elizabeth Warren, D-Mass., said. “Now to make that happen people are going to need jobs. Does this mean that you will require companies that receive the bailout money from the taxpayers to keep their workers on payroll?”
Mnuchin responded by stating that “different facilities have different requirements,” but that he hopes they will “fulfill both the spirit and the details of the law.”
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“I take it the answer to my question,” Warren asked, “is no?”
Mnuchin responded that both parties agreed to the rules, even if Warren herself was not part of the negotiations.
Sen. Brian Schatz, D-Hawaii, referred to a requirement that companies that receive government funds not fire workers or reduce pay until Sept. 30, 2020, but noted that American Airlines announced in May that they were moving 28,000 employees from full-time to part-time within two weeks
"Was that announcement a violation of the terms of the payroll support program?" Schatz asked.
“Right now we believe they are in compliance with the agreement," Mnuchin said. When Schatz asked if American Airlines was in violation at the time they made the announcement, Mnuchin said he would not discuss specific companies' situations.
Later in the hearing, Mnuchin noted that if a company offers a worker their job back and they decline, the company should report this so that the worker would not be eligible for unemployment benefits.
Sen. Jon Tester, D-Mont., focused on oversight of how federal dollars are disbursed, specifically the role of the Inspector General (IG) appointed to monitor this, in light of last week's termination of State Department IG Steve Linick.
"Secretary Mnuchin, do you think it is right to be able to remove public servants that their job is independence in holding the government accountable?” Tester asked.
"Yes, that's within his authority," Mnuchin said, noting what he interpreted as a reference to President Trump removing Linick.
"Even if they’re doing their job?” Tester asked.
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"Again, that’s an appointed position," Mnuchin said. "He has the right to withdraw just as he’s nominated a new Special Inspector General to work with the CARES Act which we look forward to the Senate confirming so we can work with that person.”
Federal Reserve Chair Jerome Powell, who also testified at Tuesday's hearing, said that the Fed's lending programs for medium-sized businesses and state and local governments would begin operating by the end of this month. Powell said that while the Fed has received a "good deal of interest" in those programs, if not enough companies or state and local governments seek to borrow, then Fed would consider changes to them, which could include expanding their eligibility.
The Associated Press contributed to this report.
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