Treasury Secretary Steven Mnuchin believes the U.S economy does need another financial stimulus to help during the coronavirus pandemic, but he did not offer a new proposal during a hearing before the House Select Subcommittee on the Coronavirus Crisis on Sept. 1. Instead, Mnuchin has followed the Republican line that backs a slimmer stimulus package, which could include targeted relief for businesses like airlines and almost no student loan assistance. Democrats have refused to consider a small package and instead support a large, comprehensive stimulus relief bill.
"What is most important is that we deliver some relief quickly to the American workers impacted by this," Mnuchin told the subcommittee last week, reports Bloomberg. During the hearing, Rep. Maxine Waters pushed Mnuchin to resume talks with House Speaker Nancy Pelosi. A source said he later called Pelosi, but it is not clear how long the conversation lasted. Talks have been stalled for a month.
Mnuchin favored the Republican approach for a smaller bill, costing $500 billion, as Congress' next move. That's less than half the cost of the proposed HEALS Act from July and far smaller than the $3 trillion HEROES Act the House passed in May. Mnuchin proposed taking some funds from the Paycheck Protection Program and adding $120 billion to make $250 billion available to help businesses struggling with rent, payroll, and other expenses during the pandemic.
Much of this aid would be directed to service and travel industries that have been hit hard. President Donald Trump previously hinted at helping the airline industry, which has seen a drop in travel. For example, United Airlines warned that over 16,000 employees could be indefinitely furloughed, while American Airlines and Delta Airlines have also announced layoffs, furloughs, and buyouts, reports Forbes.
As for student loans, the "skinny" proposal reportedly includes no additional relief for student loan borrowers. Trump did extend the CARES Act's suspension of student loan payments and interest through Dec. 31. The proposal also does not include any additional direct stimulus checks and would establish a $300-per-week unemployment benefit.
Talks between Democratic leaders and Mnuchin and White House chief of staff Mark Meadows broke down over cost. Pelosi's last proposal was a $2.2 trillion package that included aide for states and local governments, but the White House rejected it, and she refused to budge. Recently, the $500 billion plan has gained favor among the White House and earned more criticism from Democrats. Senate Minority Leader Chuck Schumer said it was "completely inadequate" to "meet the needs of the American people." Nevertheless, the Senate plans to vote on the skinny proposal this week, reports Axios. Many Senate Republicans expect the measure to fail, but they believe it would put pressure on Democrats to accept a smaller bill.