Visitors walk past a closed entrance at the Universal Studios Hollywood theme park in Universal City, Calif., on Sunday. Gov. Gavin Newsom ordered seven counties, including Los Angeles, to close bars and nightspots and recommended eight counties take action to close businesses as a result of rising coronavirus cases. Photo by Jim Ruymen/UPI | License Photo
June 30 (UPI) -- Treasury Secretary Steven Mnuchin told Congress on Tuesday he expects the U.S. economy to rebound later this year, a more ambitious outlook than Federal Reserve Chairman Jerome Powell.
Both leaders spoke during an oversight hearing of the House financial services committee.
Mnuchin said the economy should recover from the downturn caused by the coronavirus pandemic in the second half of the year.
"We are in a strong position to recover because the Trump administration worked with Congress on a bipartisan basis to pass legislation and provide liquidity and markets in record time," he said.
But Powell was more restrained in his predictions, expressing concern about the possibility of a second wave of COVID-19, which he said could force people to withdraw again.
"A full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities,' he said.
Powell urged Congress to continue helping Americans financially through the crisis.
"The objective of every single thing we're doing is to create a situation in which [Americans] have the best chance to go back to their old job or their new job.
"That's the overriding goal of what we're doing, and every one of [our programs] helps in that direction," he said.
Members of the committee's Democratic majority were also expected to question Mnuchin about controversies surrounding the implementation of the Paycheck Protection Program.
The program, overseen by the U.S. Small Business Administration, was established as part of the CARES Act passed in late March. A total of $660 billion in forgivable loans was allocated for the effort -- and Tuesday is the final deadline to submit applications.
The Treasury Department has drawn the ire of some lawmakers for allowing larger companies to tap funds, such as the NBA's Los Angeles Lakers and Ruth's Chris Steakhouse, while some small businesses were initially shut out.
The Government Accountability Office last week criticized the PPP for instituting only "limited safeguards" and lack of proper oversight.
According to prepared remarks, Powell said the economic fallout has fallen disproportionately on lower-wage workers, women and minorities.
"This reversal of economic fortune has caused a level of pain that is hard to capture in words as lives are upended amid great uncertainty about the future," he said in the prepared remarks.
Mannequins with face masks and designer clothing fill a window at a Diane Von Furstenberg store in New York City on September 8, 2020. Photo by John Angelillo/UPI | License Photo