Coronavirus Government Response Update—Fed Chair Warns of Recovery Uncertainty

June 16, 2020 Coronavirus Government Response Update—Fed Chair Warns of Recovery Uncertainty

Welcome to the Coronavirus Government Response Update. This information is intended to keep ISSA members up to date on fast-moving government affairs related to the COVID-19 pandemic, as well as other public policy issues important to the cleaning industry. Today’s update touches on Federal Reserve Chairman Jerome Powell’s remarks during the first day of his semiannual testimony before Congress, retail sales seeing their biggest jump on record, the Trump Administration’s stance on the US$600 unemployment payments’ upcoming expiration, and more.

Powell Warns of ‘Significant Uncertainty’ on Recovery; Names Groups Most at Risk
During day one of his semiannual testimony before Congress, Federal Reserve Chairman Jerome Powell warned that “significant uncertainty remains about the timing and strength of the recovery,” and pointed to small businesses and lower-income and minority Americans as being “particularly at risk,” according to CNBC. The Fed began its Main Street lending program, which is aimed at helping smaller firms negotiate the recession and started purchasing individual corporate bonds on Monday.

U.S. May Retail Sales Rose 17.7% in Biggest Jump on Record
Retail sales far surpassed the 8% forecast for May as businesses reopened and consumers resumed shopping. But while the gain set records, it recouped only a fraction of March and April’s decreases, as sales were still off 8% from their February level. “It will take quite some time to get back to anywhere near the levels of retail sales and economic activity we enjoyed around the turn of the year” said Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles. 

Trump Administration Wants to Replace $600 Unemployment Benefit with Back-to-Work Bonus
Congressional Democrats want to extend the $600-a-week additional jobless benefits into next year, pointing to the sharp drop in cash flow that could occur for approximately 30 million people currently receiving the payments. At the same time, the White House, along with many congressional Republicans, cite disincentives for finding or returning to a job, wanting the $600 benefit to stop on its July 31 expiration date and put a different policy: the back-to-work bonus, in its place.

Lawmakers Investigating Whether PPP Loans Have Gone to Most in Need
House Democrats were not pleased with Treasury Secretary Steven Mnuchin’s statement last week that the administration does not plan to disclose a list of the names of those who took out loans from the Payroll Protection Program (PPP) due to privacy concerns. Democratic lawmakers demanded disclosure of the list to further their investigation of the PPP’s failure to “prioritize loans to struggling small businesses in underserved communities — contrary to Congress’ clear intent.” Mnuchin responded that he will talk to lawmakers on a bipartisan basis “to strike the appropriate balance for proper oversight” of PPP loans “and appropriate protection of small business information.”

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