Treasury Secretary Steven Mnuchin on Sunday suggested the Senate may pass a different version of a coronavirus relief measure than the one passed by the House of Representatives, which would delay the measure until differences can be ironed out.
In a Sunday morning interview on Fox News, Mnuchin said he was in talks with senators and was hearing that certain small businesses were concerned about the burden imposed on them by the bill.
The House bill would require employers to provide full-time workers with paid sick leave.
To counter the concerns of small businesses, Mnuchin put out a statement on Saturday saying that these firms could use their tax payments parked at the Internal Revenue Service to pay sick-leave wages.
“Small businesses will be able to use the deposits that they put with the IRS, and, if they need a cash advance, they will get it from the IRS,” Mnuchin said.
Asked if this was enough to get the Senate to pass the House version of the bill, Mnuchin declined to make any prediction. “We hope they pass this bill. If not, we will work with the Senate on any minor changes we need,” he said.
Senate Democrats might also be tempted to make changes to the bill, especially in light of a New York Times editorial board estimate it would only cover 20% of the workforce. Big employers are not required to provide any paid sick leave, and companies with fewer than 50 employees can seek hardship exemptions, the Times report indicated.
If the Senate makes changes, the process would continue until the House and Senate can pass identical legislation.
The Treasury secretary also wouldn’t speculate on how much the relief bill would cost. The House moved so quickly the Congressional Budget Office couldn’t estimate the legislation’s associated cost.
“It is going to have costs that are significant but not huge,” Mnuchin said, adding that he expected a cost estimate to be released this week.
Mnuchin said he was already focused on moving an economic stimulus measure through Congress that would include assistance for airlines and other hard-hit businesses and perhaps a payroll-tax holiday to put additional money into workers’ hands.
The payroll-tax holiday has run into trouble in part because of its high cost, estimated at almost $1 trillion if it lasts through the end of the year. In the Fox News interview, the Treasury secretary mentioned an alternative approach could be refundable tax credits, but he didn’t elaborate.
Mnuchin also dodged a question about whether there would be a recession.
He did predict “a big rebound later this year” once the crisis eased.
In a separate interview on ABC’s “This Week,” Mnuchin said the economy wasn’t in a recession at the moment. This contradicted comments from Gary Cohn, who used to head Trump’s National Economic Council, who said on CNN that the economy is already in a period of declining growth.
Asked when the crisis might be over In a separate interview on Fox, Anthony Fauci, the director of the National Institute for Allergy and Infectious Diseases, said he couldn’t say.
“We are not sure what the duration is going to be,” he said.
President Donald Trump and other officials have mentioned eight weeks as a ballpark estimate because China’s experience with the coronavirus suggests new cases started coming down after two months, Fauci explained.
“Hopefully in the next couple of months (we) are going to see the direction it is going to go,” Fauci said.
Asked when the market might stabilize after the massive losses over the past few weeks, Mnuchin said he wouldn’t try to predict a top or a bottom for stocks. He said that long-term investors ultimately benefited after the 1987 crash and the 2008 financial crisis.
Despite a sharp rally on Friday, the Dow Jones Industrial Average DJIA, +9.36% is down 21% from its peak on Feb 12.
The Treasury secretary pushed back against the mention of a Washington Post story that Trump had erupted in fury this week about Fed Chairman Jerome Powell. Mnuchin said the president was not so animated.
On Saturday, Trump asserted he had the authority to fire or demote Powell.
Legal scholars have suggested that either maneuver could only be undertaken for cause, and that cause would need to entail something meatier than a policy disagreement.