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Mnuchin on whether international travel will resume this year - YouTube
Channel: Fox Business
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welcome back small business at their
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breaking point the second round of the
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paycheck protection program allocating a
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hundred and seventy-five billion dollars
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to save America's small businesses but
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it comes amid some hiccups after the
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initial funds ran dry critics questioned
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if lenders priorities were in check and
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several large universities and
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corporations collected loans before
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those struggling most joining me right
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now over the phone is the US Treasury
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Secretary Stephen minuchin secretary
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Manutius always a pleasure to have you
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thank you for being here
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thank you it's great to be with you
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Maria so secretary give us a status
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check on the paycheck program is all of
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the money for the second tranche
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committed yet or where are we in terms
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of the money having gone out no it's not
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committed yet there's a hundred and
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seventy-five billion of the three
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hundred and ten billion that's been used
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and all the the systems have been caught
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up we couldn't be more pleased in this
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round there's 2.2 million loans already
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done at an average loan size of 79
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thousand dollars so we're really seeing
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this is going directly to small
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businesses and just to put this in
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perspective the previous rounds we did
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1.7 million loans so we're already way
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over that level and despite there were
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some hiccups with the systems I think as
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you know this is more capacity than the
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SBA has done probably in its entire
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history at this point and now the
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systems are up and running and this will
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impact about 60 million people by the
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time this this round is concluded so 60
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million more people will be back to work
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and small businesses being able to open
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this is really important a great number
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there and and and thanks for doing all
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that you're doing secretary let me ask
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you because Wall Street has some
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questions and they say that there are
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questions on Capitol Hill about whether
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businesses should have more flexibility
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in this plan I know that with this
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program the requirement is is that 75%
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of the money the loan goes out to your
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employees so that employees get that
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money and then you use 25% of the money
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to pay other things like your rent and
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business expenses people want that
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loosened are you willing to look at this
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again and lose
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those requirements they believe that
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will lead to an expansion of this
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program well Maria is you know this this
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program had enormous bipartisan support
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and was designed with with everybody at
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the table and really the purpose of this
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was to get workers back to work and
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every dollar we spend here is a dollar
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we save on unemployment insurance so the
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program is pretty simple you get two
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months of payment for your workers and
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you get an extra 25% for your overhead
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and to the extent you hire back your
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workers you get that all forgiven so the
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idea that taxpayers would forgive the
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majority of the money that was going to
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the workers which saves unemployment in
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a reasonable amount of overhead I think
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25% overhead is is very fair but this
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was not designed as a loan it was really
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designed as a grant and people who say
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you know they want to use more money for
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overhead they can go out and borrow an
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idle loan so there's another program
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that will have about 350 billion dollars
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to small businesses of 30-year loans
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those loans aren't forgiven but that's a
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lot of money that small businesses can
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borrow so that they have overhead so
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these programs combined will be a
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trillion dollars that's huge it's it's
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huge it's an enormous number I get that
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and you're doing a good job helping
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small business and importantly employee
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for what I'm asking you is the PPP
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program and the 75% and the 25%
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breakdown and the eight-week period
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because as we've talked about from the
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very first time you launched this
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program I questioned this and I asked
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you because if you are a restaurant and
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you are paying out 75% of the money to
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your employees and you're still in the
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middle of a shutdown you don't have any
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business you're still not going to save
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your business so maybe my employees are
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okay they got the money but I'm still
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going to go bankrupt so the question is
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are you willing to look at those numbers
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and loosen them up can can an employee
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take the money and maybe pay it back in
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10 weeks instead of 8 weeks
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well 10 weeks instead of 8 weeks rather
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this is the way the program was designed
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by Congress and we think it has the
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right intent to get
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the money to employees so I don't have
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the flexibility to change that but let
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me just say you know there are certain
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cases where businesses will have issues
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but let's focus on the bigger picture 60
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million workers so some of those may be
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restaurants they can open a lot of those
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are restaurants that are ready to open
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and also restaurants that will do a lot
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of takeout business so I can tell you
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the number of stories I've personally
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seen from small businesses people
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thanking us people sending letters we
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saw the small business to come in and
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meet with the president I mean this is
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really a great success story and is just
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enormous ly helpful to get businesses
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back open as the economy opens yeah I'm
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not saying it's not a success story I'm
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just saying that small businesses like
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restaurants do not feel that it's a
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success story for them they say that the
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eight-week period is too stringent and
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the 7525 make up but I understand it's
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Congress they've got a look good I'm
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just wondering if you feel that that
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would expand the program if you were to
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move that Murray I think the president
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is very sympathetic to the restaurant
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industry they've been particularly a
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hardhead he's focusing on getting tax
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changes so that that will be fully tax
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deductible like it used to be different
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incentives to get people to go back to
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restaurants so we fully appreciate the
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issues of the restaurant industry in
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particular have been hardest hit the
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president is also looking about ways to
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stimulate travel again we want people to
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travel safely to be able to visit places
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safely so as the economy opens up I
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think you'll see demand coming back do
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you think international travel will be
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opened up this year too hard to tell at
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this point Maria I hope down the road it
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is but I'd say we're taking this are our
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priority is opening up the domestic
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economy obviously for business people
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that do need to travel there will be
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travel on a limited basis but this is a
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great time for people to explore America
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a lot of people haven't seen many parts
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of America I wish I could get back on
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the road soon so we're looking to all
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get back to business
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secretary one senator is saying that the
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IRS is interpretation of the PPP plan
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was not the intention of the program
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he's calling for the issue to be fixed
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immediately and that is is that the IRS
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on Thursday released guidance stating
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that the expenses related to forgivable
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loans the Paycheck protection program
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will not be tax-deductible are you gonna
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change that
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well Maria that's just the guidance is
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correct and that person is just wrong so
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let me explain why specifically the
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money coming in the PPP is not taxable
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so if the money that's coming is not
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taxable you can't double dip you can't
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say you're gonna get deductions for
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workers that you didn't pay for the
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taxpayers didn't pay for so this is just
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saying no double dipping and again if
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the if the tax if the PPP grants were
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taxable then you'd get to have the
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deductions but this is just a simple
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offset I've reviewed this personally
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this is basically tax 101 at the simple
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roll what are you expecting from the
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openings this week we've got 23 states
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beginning the reopening of the economy
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secretary that's 35 percent of the GDP
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tell us what you're expecting in the
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next couple of weeks as we do have this
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slow but steady opening for the economy
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well I think it's important we have a
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slow and steady some places will be
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faster some places will be slower I
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think as you know that this was no fault
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of business this wasn't anybody making
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bad decisions this was all about a virus
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that we're going to kill and by the way
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I'm extremely optimistic as the
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president has said about getting a
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vaccine by the end of this year I've
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seen some terrific companies making
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great progress on this but as the
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economy opens slowly we're going to see
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obviously a difficult second quarter
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we'll see things better in the third
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quarter better in the fourth quarter and
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as the president said we'll be back to a
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great economy next year and and and in
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doing that as we do see these openings
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some states are having a harder time
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than others some states want lawmakers
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to make them holes
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lawmakers are clashing over the next
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round of coronavirus stimulus or a
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relief package if you will Democrats are
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calling for significantly more money to
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help states and local governments but
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Republicans are pushing back urging
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Congress to wait and see how the economy
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reacts to funding that's already in
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place where do you stand on this I had a
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New York City Mayor Bill DeBlasio on the
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show a couple of weeks ago and he said
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look I need seven and a half billion
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dollars right now we need to make New
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York City whole are you gonna do it well
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let me first say working with Congress
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we were able to get now three trillion
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dollars that were pumping into the
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economy and that's money that's going
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into the economy now it's beginning to
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get in as it relates to States as part
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of this there was a hundred and fifty
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billion dollars that went to States
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that's a lot of money for coronavirus
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expenses the president directed me on
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Friday to create more flexibility so
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that that money can be used and we send
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out guidelines for firefighters
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policemen first responders so there
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should be no issues with states being
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able to pay those people and as we've
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said before we're not going to bail out
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states that had financial issues ahead
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of time we will look at helping States
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as we've done and we've also set up with
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the Federal Reserve a lending facility
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for cities and states so is it fair to
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say that given the unemployment benefit
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expansion expires July 31st may be a
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phase four timeframe would be in June is
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that what you're working on well we're
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beginning to have conversations on a
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bipartisan basis we're going through the
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issues we're going to have very detailed
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discussions I think you know everything
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we've done has been with overwhelming
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bipartisan support
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we've put three trillion dollars out if
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we need to put more money out to support
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American business and American workers
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the president is absolutely prepared to
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do that
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but now that we put out three trillion
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dollars we're going to look at very
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carefully how we go back and we're going
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to also take into account what the
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economic impact is as we open up the
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economy secretary were you surprised at
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what Boeing did last week big debt
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of course the company going from likely
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needing government support to now
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tapping the debt market in a huge way
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twenty five thirty billion dollars we've
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talked about this before that following
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push back on your commentary that
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perhaps the government would take a
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stake a warrant similar to what you did
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with Airlines well it wasn't a surprise
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to me Maria because I was in touch with
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Boeing pretty much on a weekly basis I
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think you know Boeing is a major
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employer a major exporter I speak to
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many many CEOs weekly to keep on top of
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what's going on I think this was really
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a great success story so if you saw the
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day we announced with the Federal
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Reserve that we were going to do a
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facility for the primary markets and the
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secondary markets and corporate bonds
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and that was going to include fallen
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angels that was the day that the
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corporate bond markets reopened and
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you've literally had record issuance of
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ingress investment grade bonds so I
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couldn't be more pleased this was a
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great success story they didn't need a
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penny of government support they thought
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that they were going to need government
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support they raised twenty five billion
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dollars in in the capital markets so
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this really worked out perfectly just
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our announcement with the Fed without
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putting a dollar opened up the markets
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and the markets are functioning normally
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but we are there for companies that
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can't access the markets were specific
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yeah in areas the the president has said
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that he wants to keep China accountable
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for some of the behavior that we've seen
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around this cop谩n 19 pandemic given the
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fact that they downplayed it the
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president doll the suggested removing
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sovereign immunity that shields lawsuits
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against the Chinese Communist Party are
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you or are you considering this and what
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about limiting or removing shares of
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Chinese stocks and bonds in indices I
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know that the president also discussed
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the the thrift fund which of course the
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US federal pension fund wants to invest
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in Chinese companies many of those
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companies are making equipment for the
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Chinese military well the president is
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reviewing all these issues it's very
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very careful
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and as he said he's not happy that they
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didn't let people in earlier to study
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this didn't know what was going on he's
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been very clear he's working with the
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Intel agencies to understand what they
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knew and what they didn't know the
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president's number one focus right now
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is the health of the American public and
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the US economy but he is studying the
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China issue very carefully and secretary
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after all of this is there any way that
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the Chinese are actually going to keep
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to their promise and find the children
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50 billion dollars worth of goods are
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you expecting them to renege no I'm
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expecting them to meet their obligations
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this was a deal that was negotiated over
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a long period of time it was signed off
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on by President Xi and President Trump
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and I have every reason to expect that
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they honor this agreement and if they
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don't there would be very significant
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consequences in the relationship and in
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the global economy as to how people
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would do business with them and
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secretary real quick before you go the
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oil companies is a financial aid package
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coming there no bailout to the oil
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companies what we've said is we are
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looking at the oil companies as we're
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looking at other things to study this
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there are important issues the president
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wants us and we will remain energy
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independent and let me just say this is
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the classic supply-demand imbalance for
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oil so you know like other physical
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commodities there's just not a lot of
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room to store this so there's no
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question in my mind that down the road
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oil will rebound and this is a great
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opportunity we're working with Secretary
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of Energy to fill up the strategic
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reserve I'm is really he's cut some
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amazing deals where literally he's
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getting free oil for paying for storage
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so I know he's looking for more storage
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capacity and the president is determined
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we will work with the Department of
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Energy to support our industry secretary
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thanks so much for being here appreciate
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it very much secretary Steven venusian
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