Mnuchin to Congress: Pass Stand-Alone Coronavirus Relief Bill to Repurpose PPP Funds

By Dana Cruz Sep 02 2020, 05:59 AM EDT

Steve Mnuchin, Treasury Secretary, said passing a stand-alone coronavirus relief bill that revamps the Paycheck Protection Program (PPP) is the "easiest" option to continue helping small businesses.

Treasury Secretary Mnuchin Briefs Media On New Iran Sanctions — U.S. Treasury Secretary Steve Mnuchin briefs reporters on President Donald Trump's newly signed executive order imposing new sanctions on Iran, at the White House on June 24, 2019 in Washington, DC. Photo by Mark Wilson/Getty Images

Mnuchin suggested this amid the heated battle in Congress over the new coronavirus relief bill. He was grilled in his first appearance before the House Select Subcommittee on the Coronavirus Crisis on Tuesday.

He spoke on behalf of the White House response team for the pandemic's economic side effects, the WKRN reported.

For Mnuchin, he said the most important focus areas for the coming coronavirus relief bill are "jobs and kids."

He noted that repurposing stand-alone PPP will be the "easiest to pass" and will likely have overwhelming support from both sides of the Congress.

The PPP expired on August 8, and over $130 billion in funds were left unused after being extended by Congress, said a Fortune report.

In a Forbes report, Mnuchin said the White House is willing to try and restart talks between Republicans and Democrats to finalize a second relief bill.

"I would publicly say I am willing to sit down at the negotiating table with the Speaker [Nancy Pelosi] with no conditions whatsoever, anytime," said Mnuchin.

What Do New Proposals Include?

Recent proposals on the PPP funds will primarily help and give targeted help to smaller businesses. These will include those with fewer employees and who show a hit to revenue due to the pandemic.

Industries such as those in hospitality, travel, and entertainment were also singled out by Mnuchin as those "hit very, very hard."

Rep. Nydia Velazquez also stressed during the hearing Tuesday that a new PPP bill will prioritize minority-owned businesses. Meaning, businesses owned by Latino are likely to get part of the new benefits.

Velasquez noted that these businesses struggled to access the previous round of the program.

Will PPP Be Passed Outside Overall Stimulus?

"I think the issue is we need now support quickly - that's what's important to the American economy, and if we need more, we can come back," he said.

Singling out the PPP, it is not yet clear if it will be passed as a separate bill outside the stimulus package.

Although, back in July, Pelosi said the Democrats do not want to pass legislation on a "piecemeal" basis.

Problems with Fraud and Misuse

Mnuchin said PPP has helped millions of small businesses survive the crisis.

House Republicans also said on Tuesday that the program was a "resounding success." They claimed that the PPP managed to support over 51 million jobs in the U.S. with "minimal fraud."

But the program has shown a line of "fraud, waste, and abuse," said a report from Government Accountability Office (GAO) back in June.

The GAO analysis found that $1 billion worth of loans went to companies with multiple loads. Other than that, $3 billion more was "flagged" by the federal government's System for Award Management (SAM) database and PPP loan-level data.

Both parties and the White House want to see a relief bill passed in the form of new stimulus checks. All involved parties also eye unemployment benefits.

Despite this, they can't agree on the specifics. The president's recent executive actions have met some of these, but implementation is still in the works.