Mnuchin dodges on specifics of coronavirus’ economic impact

Mnuchin said his primary focus at the moment is the passage of the congressional aid package, which passed the House after midnight on Friday and which President Donald Trump has pledged to sign if it passes the Senate. That legislation would act as a complement to an $8.3 billion emergency aid bill Congress approved earlier this month, and it would precede a stimulus package aimed at propping up the hard-hit travel industry on which he said negotiations would begin this week.

“We need to get economic relief to the people that are impacted by this, and, as I have described this, we are in the second inning. The first inning was the $8 billion, the second inning we passed bipartisan legislation to make sure that workers that need to be home and small- and medium-size businesses will get paid,” he said. “We are now going back to Congress and focusing this week on the airlines industry, the hotel industry, the cruise ship — there’s no question that the travel industry has been impacted like we’ve never seen before.”

He declined to put a price tag on the latest aid package, pointing to the unknown extent of the virus’ spread and how many workers would need the paid sick leave included in the latest stimulus bill. The cost would be “significant,” he said, “but not huge.”

The secretary also would not predict how big of a hit the economy would take, instead reiterating that investors “need to focus on the long term” and pushing back on the idea that relief measures under consideration should be classified as a bailout, a term the Trump administration has sought to avoid.

Unlike the 2008 recession, which was underpinned by the burst of the housing bubble and other structural weaknesses in the financial sector, there are no such issues contributing to the market tumble, Mnuchin argued.

“If you are providing liquidity to good businesses that just need liquidity for three to six months where you’re taking collateral and you have security, that’s not a bailout,” Mnuchin reasoned. “To the extent that we need to support different businesses that are impacted, again — our focus is going to be on stimulus for the workers and getting money to the workers that impacted it.”

While he stressed that there will be businesses “that will be severely impacted” by the collapse of consumer spending while Americans are urged to exercise social distancing, “we are focused on helping those businesses that need liquidity.”