Mnuchin Says Economy Is Recovering but ‘More Work’ Is Needed to Alleviate Pain

Asked by Representative Jim Jordan, Republican of Ohio, whether Democratic governors were to blame for the crisis, Mr. Mnuchin said that “I believe there’s no question that the reason we have unemployment is that certain states are not opening up and that there are issues.”

“Obviously,” he added, “some of that has to be balanced with the medical issues appropriately.”

Mr. Mnuchin at several points suggested that lawmakers should pass a new round of small business assistance targeted to companies that have experienced steep revenue losses during the crisis. He said lawmakers should be open to a piecemeal approach to get assistance to people and companies that need it immediately, including small businesses.

Any additional small business lending is likely to come with significant strings. Democratic lawmakers criticized Mr. Mnuchin’s handling of the existing effort, the Paycheck Protection Program, saying much of the money had gone to businesses that did not need or deserve funds.

The subcommittee, in a preliminary analysis of the $660 billion program released by Democrats, found that $1 billion in loans went to companies that received more than one loan, in violation of the program’s rules. Nearly $100 million went to companies “ineligible to receive P.P.P. funds because they have been debarred or suspended from doing business with the federal government.” The Small Business Administration and the Justice Department have been investigating numerous allegations of fraud in the program, which has so far made about five million loans.

While lawmakers continue to haggle over another package, economists are warning that more needs to be done quickly to avoid long-term economic scarring.

On Tuesday, Lael Brainard, a Federal Reserve governor, said the U.S. economy remained at risk as the coronavirus pandemic wears on — and support from Congress and the White House was crucial to cushioning the blow.

“The economy continues to face considerable uncertainty associated with the vagaries of the Covid-19 pandemic, and risks are tilted to the downside,” Ms. Brainard said in remarks prepared for delivery at a Brookings Institution event on Tuesday. “As was true in the first phase of the crisis, fiscal support will remain essential to sustaining many families and businesses.”

Jeanna Smialek contributed reporting.

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