Mnuchin Says More Stimulus Needed, Don't Worry About The Deficit

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Topline

After Senate lawmakers were unable to pass a pared-down economic stimulus package last week, Treasury Secretary Steven Mnuchin told CNBC Monday that despite what he described as a “great rebound,” there are “clearly” areas of the economy that still need support and that fear over adding to the national debt shouldn’t prevent Congress from passing another stimulus bill. 

https://specials-images.forbesimg.com/imageserve/5f5f7d7815fdbc54acd6b1a0/960x0.jpg?cropX1=0&cropX2=3600&cropY1=182&cropY2=2208
Treasury Secretary Steven Mnuchin testifies before the House Select Subcommittee on the Coronavirus ... [+] Crisis, during a hybrid hearing, Tuesday, Sept. 1, 2020, on Capitol Hill in Washington.ASSOCIATED PRESS

Key Facts

Mnuchin reiterated that he and President Trump are both in favor of more support for the economy, and he singled out hotels, travel, small businesses, and restaurants as sectors that will likely need more government help. 

One of the fundamental factors in the breakdown in stimulus negotiations over the last weeks and months has been the price tag.

Democrats led by House Speaker Nancy Pelosi (D-Calif.) had pushed for more broad spending, while the White House and GOP, wary of running up the national debt and the Federal Reserve’s balance sheet, pushed for a more targeted bill. 

Mnuchin pushed back against that conservative position Monday, saying that “now is not the time to worry about shrinking the deficit.”

Big Number

$3.3 trillion. That’s how high the Congressional Budget Office expects the federal deficit to be this year as a direct result of historic economic stimulus spending. For the first time since World War II, the national debt is expected to exceed the entire size of the U.S. economy in the next fiscal year. 

Crucial Quote 

“I will continue to work on this,” Mnuchin said. “I’ve told the Speaker I am available any time to negotiate, no conditions.”

Key Background

Last week, Senate Republicans introduced a “skinny” stimulus package worth about $650 billion—with $300 billion of that money appropriated for new spending and the other $350 billion repurposed from earlier relief funds—after weeks of meetings between top Democrats and the White House failed to produce a compromise on the next round of federal aid. Democrats, who passed their own $3.4 trillion relief plan in the House in May, blocked the bill because it was not comprehensive enough. With this latest effort dead in the water, many experts are predicting that new federal aid won’t come until after the November election, if it comes at all. 

Further Reading

Trump’s $300 Unemployment Checks Are Running Out And There’s No More Funding In Sight (Forbes)

Second Stimulus Update: GOP Bill Fails In The Senate. Will There Ever Be More Relief? (Forbes)

Republican ‘Skinny’ Stimulus Bill Headed For A Vote—Here’s What’s In It, And What’s Not (Forbes)

Mike Pence Says The White House Still Wants To Send Second Stimulus Checks (Forbes)