[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                 OVERSIGHT OF THE TREASURY DEPARTMENT'S
                AND FEDERAL RESERVE'S PANDEMIC RESPONSE

=======================================================================

                             HYBRID HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 22, 2020

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 116-111
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                              __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
43-525 PDF                  WASHINGTON : 2021                     
          
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             ANN WAGNER, Missouri
GREGORY W. MEEKS, New York           FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri              BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
JIM A. HIMES, Connecticut            SCOTT TIPTON, Colorado
BILL FOSTER, Illinois                ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio                   FRENCH HILL, Arkansas
DENNY HECK, Washington               TOM EMMER, Minnesota
JUAN VARGAS, California              LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey          BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida                   WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam            TED BUDD, North Carolina
RASHIDA TLAIB, Michigan              DAVID KUSTOFF, Tennessee
KATIE PORTER, California             TREY HOLLINGSWORTH, Indiana
CINDY AXNE, Iowa                     ANTHONY GONZALEZ, Ohio
SEAN CASTEN, Illinois                JOHN ROSE, Tennessee
AYANNA PRESSLEY, Massachusetts       BRYAN STEIL, Wisconsin
BEN McADAMS, Utah                    LANCE GOODEN, Texas
ALEXANDRIA OCASIO-CORTEZ, New York   DENVER RIGGLEMAN, Virginia
JENNIFER WEXTON, Virginia            WILLIAM TIMMONS, South Carolina
STEPHEN F. LYNCH, Massachusetts      VAN TAYLOR, Texas
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota

                   Charla Ouertatani, Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    September 22, 2020...........................................     1
Appendix:
    September 22, 2020...........................................    39

                               WITNESSES
                      Tuesday, September 22, 2020

Mnuchin, Hon. Steven T. Secretary, U.S. Department of the 
  Treasury.......................................................     6
Powell, Hon. Jerome H., Chair, Board of Governors of the Federal 
  Reserve System.................................................     8

                                APPENDIX

Prepared statements:
    Mnuchin, Hon. Steven T.......................................    40
    Powell, Hon. Jerome H........................................    43

              Additional Material Submitted for the Record

Mnuchin, Hon. Steven T:
    Written responses to questions for the record submitted by 
      Chairwoman Waters..........................................    55
    Written responses to questions for the record submitted by 
      Representative Stivers.....................................    60
    Written responses to questions for the record submitted by 
      Representative Kustoff.....................................    61
    Written responses to questions for the record submitted by 
      Representative Gabbard.....................................    62
    Written responses to questions for the record submitted by 
      Representative Barr........................................    63
Powell, Hon. Jerome H.:
    Written responses to questions for the record submitted by 
      Chairwoman Waters..........................................    65
    Written responses to questions for the record submitted by 
      Representative Anthony Gonzalez............................    85
    Written responses to questions for the record submitted by 
      Representative Hill........................................    88
    Written responses to questions for the record submitted by 
      Representative Kustoff.....................................    90

 
                       OVERSIGHT OF THE TREASURY
                        DEPARTMENT'S AND FEDERAL
                      RESERVE'S PANDEMIC RESPONSE

                              ----------                              


                      Tuesday, September 22, 2020

             U.S. House of Representatives,
                   Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:34 a.m., in 
room 2128, Rayburn House Office Building, Hon. Maxine Waters 
[chairwoman of the committee] presiding.
    Members present: Representatives Waters, Sherman, Green, 
Perlmutter, Himes, Foster, Beatty, Heck, Vargas, Gottheimer, 
Gonzalez of Texas, Lawson, Tlaib, Porter, Axne, Casten, 
McAdams, Adams, Dean, Garcia of Illinois, Garcia of Texas; 
McHenry, Wagner, Lucas, Posey, Luetkemeyer, Huizenga, Barr, 
Williams, Hill, Emmer, Zeldin, Loudermilk, Mooney, Davidson, 
Budd, Kustoff, Hollingsworth, Gonzalez of Ohio, Rose, Steil, 
Timmons, and Taylor.
    Chairwoman Waters. The Financial Services Committee will 
come to order. Without objection, the Chair is authorized to 
declare a recess of the committee at any time.
    I want to remind Members of a few matters, including some 
required by the regulations accompanying House Resolution 965, 
which established the framework for remote committee 
proceedings.
    First, I would ask all Members on the Webex platform to 
keep themselves muted when they are not being recognized by the 
Chair. This will minimize disturbances while Members are asking 
questions of our witnesses. Members on the Webex platform are 
responsible for muting and unmuting themselves. The staff has 
been instructed not to mute Members except when a Member is not 
being recognized by the Chair, and there is inadvertent 
background noise.
    Members on the Webex platform are reminded that they may 
only attend one remote hearing at a time, so if you are 
participating today, please remain with us during the hearing. 
Members should try to avoid coming in and out of the hearing, 
particularly during the question period.
    If, during the hearing, Members wish to be recognized, the 
Chair recommends that Members identify themselves by name so as 
to facilitate the Chair's recognition. I would also ask that 
Members be patient as the Chair proceeds, given the nature of 
the online platform the committee is using.
    In addition, the Chair informs the Members participating in 
person that in enforcing order and decorum in the hearing room, 
the Chair has a duty to protect the safety of the Members. The 
Attending Physician provided the following guidance: ``For U.S. 
House of Representatives meetings, in a limited and closed 
space, such as a committee hearing room, for greater than 15 
minutes, face coverings are required.'' Accordingly, the Chair 
will treat wearing masks as a matter of order and decorum, and 
all Members should wear a mask. The Chair has a strong 
preference for Members to wear a mask even while being 
recognized by the Chair. Members who do not wish to wear a mask 
may participate virtually through the Webex platform.
    Before going any further, I would ask unanimous consent to 
speak out of order, and I suppose this would be a personal 
privilege. I would like to take a minute to acknowledge the 
departure of a staff member, Lisa Peto.
    Lisa has been with the committee for 8 years, working her 
way up from a fellow to the committee's chief counsel. She has 
been a dedicated, tireless, and committed public servant with a 
keen understanding of procedure and a deep knowledge of the 
legislative process.
    Under Lisa's guidance, committee Democrats successfully 
transitioned from the Minority to the Majority, and then, Lisa 
was instrumental in the committee's transition from in-person 
hearings to virtual and hybrid ones.
    Lisa has accomplished so much with the committee, but her 
most important accomplishment is her family. She is mom to her 
son, Adrian, who recently celebrated his first birthday.
    Lisa has been a valued member of my team, and I will miss 
her dearly. So, I want to thank her for her service, and wish 
her the best in her future endeavors.
    Mr. McHenry. Madam Chairwoman?
    Chairwoman Waters. I now recognize the ranking member to 
speak out of order.
    Mr. McHenry. Thank you, Madam Chairwoman.
    As we all know, and as we grow in our service here, we know 
how important having staff is to this whole process, how 
essential it is that you have good staffers who are going to 
represent their Member's perspective.
    And I will tell you that Lisa has been a fierce advocate 
for her principal's perspective. In negotiations, she has not 
wavered in her view, her view being the chairwoman's view, but 
at the same time, being cordial enough to have a conversation 
and maintain relationships. That is a priceless bit of art that 
is representative of Lisa's character.
    And we are grateful, Lisa, that we have been able to work 
with you. We wish that we had been more successful in our 
negotiations with you personally. But it is due to your talent, 
and it is also due to your knowledge.
    And so, we thank you for your service to your country, to 
our country, to this institution, and to this committee. And I 
know committee Democrats especially will miss you. Committee 
Republicans won't miss you quite as much. But we are certainly 
grateful for the relationship that we have all been able to 
have with you, Lisa.
    Congratulations to you on your son and your new family, and 
we hope that your time away will be but temporary from public 
service. But thank you for your service to your country and 
this institution.
    And I yield back.
    [applause]
    Chairwoman Waters. Thank you very much, Mr. Ranking Member.
    Today's hearing is entitled, ``Oversight of the Treasury 
Department's and Federal Reserve's Pandemic Response.'' This 
hearing is the committee's second quarterly hearing required by 
the Coronavirus Aid, Relief, and Economic Security (CARES Act), 
for oversight of the various Facilities and programs under the 
Act.
    I now recognize myself for 4 minutes to give an opening 
statement.
    Welcome back, Chair Powell and Secretary Mnuchin. Since you 
last testified before this committee in June, the coronavirus 
crisis has continued to have a catastrophic impact on 
communities across the country.
    Nearly 200,000 people in the United States have lost their 
lives to the coronavirus, and there have been over 6.8 million 
U.S. cases. Millions of families are struggling to make ends 
meet during this crisis and are on the verge of eviction. Over 
a million small businesses, which are the lifeblood of our 
economy, have shut their doors as families across the country 
are looking to Washington for leadership.
    The Trump Administration has utterly failed in its economic 
response to this virus, with 32 percent of renters unable to 
make their full September rent payments at the beginning of the 
month, according to Apartment List, and back rent piling up. 
The need for emergency rental assistance to prevent a crushing 
wave of evictions is growing every day.
    Instead of rental assistance, the Trump Administration has 
issued a Centers for Disease Control and Prevention action that 
temporarily prevents evictions for some renters, but only after 
they sign documents that potentially expose them to litigation 
and criminal penalties. Meanwhile, the unpaid back rent 
continues to accrue, meaning that the Trump Administration is 
simply delaying, not preventing, evictions.
    The Health and Economic Recovery Omnibus Emergency 
Solutions (Heroes) Act, which passed the House in May to 
prevent those evictions and provide other critical relief, is 
gathering dust in the Senate on Mitch McConnell's desk.
    I said before that I am pleased that after calls from 
members of this committee, the Treasury and the Small Business 
Administration made adjustments to the Paycheck Protection 
Program (PPP) to ensure that community development financial 
institutions (CDFIs) and minority depository institutions 
(MDIs) are able to provide loans to the communities they serve, 
and I appreciate that the Federal Reserve has expanded several 
programs. But I am frustrated with the Trump Administration's 
implementation of pandemic relief programs based on the 
concerns I continue to hear.
    Specifically, I am very concerned that much of the $500 
billion Congress allocated in the CARES Act to Treasury, most 
of which was to support Federal Reserve lending, to help 
reeling businesses, nonprofits, and State and local 
governments, has gone unused. Here we are almost 6 months after 
the passage of the CARES Act and a mere 0.2 percent of Main 
Street Lending Program funds and 0.3 of Municipal Liquidity 
Facility funds have been put to use. This is unacceptable.
    Secretary Mnuchin, Chair Powell, let me be blunt. This 
pandemic response has fallen badly short, and the Trump 
Administration has sabotaged efforts to pass a relief package 
or address the major public health and economic crisis we face. 
Your work to address this crisis doesn't stop when the stock 
market recovers from its losses. Your mandate is to help 
hardworking individuals and families who are suffering.
    Before I close, let me say that I just learned today that 
there are 40,000 students who have been infected with the 
virus. That shakes me. And we still have people who are forcing 
schools to open and not do distance learning. I don't get it. 
And I didn't know until today that that many students had been 
infected. So, I am very, very concerned.
    I now recognize the ranking member of the committee, the 
gentleman from North Carolina, Mr. McHenry, for 4 minutes.
    Mr. McHenry. Thank you. We all know that testing, 
treatment, and therapeutics need to come online for a full 
economic recovery. That is moving at an unprecedented pace, I 
would say, not just globally, but here in the United States, 
with great innovators. The coordination between the public 
sector and the private sector has been the best it has ever 
been in generations. And this Administration's response to this 
unprecedented pandemic, the Federal Reserve's response to this 
unprecedented pandemic, is topnotch.
    It is fantastic, the delivery that Secretary Mnuchin was 
able to provide on PPP, which supported 51 million jobs and 
issued over 5 million loans to small businesses impacted by 
COVID. That was a direct intervention of the Treasury Secretary 
and his team at Treasury.
    The Federal Reserve stood up more Facilities in a 6-month 
period of time than they did in the fullness of the financial 
crisis. They stood up more Facilities than they did in decades 
prior to this pandemic. So, I would give the Federal Reserve an 
A-plus for its initial response and to where we are.
    And just because Congress can't get its act together and 
compromise to see a way through so that we can provide those 
people who are still hurting because of this voluntary shutdown 
of our economy because of this health crisis, we need to give 
those people relief and we need to come to terms. That means 
that Democrats and Republicans need to move to the middle.
    And I would commend Secretary Mnuchin for his negotiations 
and his willingness to move the ball forward on behalf of the 
American people, even in the midst of the crazy politics that 
we are currently experiencing, with people shouting in the 
streets and threatening violence because they don't like 
political perspectives.
    So, I would commend him for being willing to negotiate 
where others have walked away, like Speaker Pelosi and Leader 
Schumer, and saying, ``$3 trillion is all we are going to 
accept, and anything less is completely unacceptable.'' We need 
to actually find a compromise to support those people who are 
still out of work because of this global health pandemic.
    Quite frankly, on that bill, Democrats would rather bail 
out blue States and hold out for that rather than help people 
who are still out of work because their jobs are shut down.
    Let me finish with this. What we saw at the end of last 
year was the best economy of our lifetimes. We had household 
wage growth at almost 7 percent in 2019. Households were 
feeling wealthy for the first time in a very, very long time in 
my State of North Carolina, and across the country.
    We need to do that again. We know that we are in the midst 
of this health pandemic. We know that therapeutics are coming 
online, treatment techniques are much better than they were at 
any time since March, and those things are coming along. And 
maybe there will be a vaccine, maybe, but we need to have 
treatment and we need to have widescale testing so that people 
can get back to some semblance of economic life.
    But what I would like to hear today is the limits of the 
Federal Reserve's actions and activities and where Congress 
should act, because monetary policy simply cannot do the same 
thing that fiscal policy can.
    And on the fiscal side of the House, Secretary Mnuchin, I 
would like to hear the economic plan from this Administration 
on what, when we get past this awful, awful scourge of COVID, 
that economic recovery must entail to get people back in the 
position they were in in 2019, or even in January or February 
of this year. I think there is a good story to tell and a 
hopeful story to tell if we can work together and get things 
done. And so, I look forward to your testimony.
    I yield back.
    Chairwoman Waters. I now recognize the gentleman from 
Texas, Mr. Green, who is also the Chair of our Subcommittee on 
Oversight and Investigations, for 1 minute.
    Chairman Green. Thank you, Madam Chairwoman.
    And, Madam Chairwoman, I would like to associate myself 
entirely with your comments, and I would only add that the 
stimulus, the economic impact statement, must be made because 
the rent must be paid.
    Yesterday, the Government Accountability Office (GAO) 
reported that the Treasury Department lacks up-to-date 
information on the number of eligible recipients who have yet 
to receive their economic impact payments (EIPs). This new GAO 
report follows previous GAO findings dating back to May 2020, 
that persons not in the traditional employment relationships, 
such as those working in the gig economy, may be missing from 
the IRS EIP outreach. Without this data, it is very difficult 
to know who is being left behind, and that number may be in the 
millions.
    I will say it again: The rent must be paid, and the EIP 
payment must be made. If we do not do this, we will put persons 
at risk of being evicted at a time when we are having a 
pandemic that is still taking lives in this country.
    I do believe that this can be done, but I know that we must 
have more help to make sure the rent is paid. The EIP payments 
are already there; they are funded. We need to make sure that 
the people who need them will get the funds.
    I yield back.
    Chairwoman Waters. I now recognize the subcommittee's 
ranking member, Mr. Barr, for 1 minute.
    Mr. Barr. Thank you, Secretary Mnuchin and Chairman Powell, 
for appearing before the committee today, and for your 
continued efforts to combat the economic fallout from the 
COVID-19 pandemic.
    Treasury and the Fed acted swiftly to stabilize the 
economy, keep businesses open, ensure the continued operation 
of the credit markets, and promote long-term recovery.
    Since you last appeared before this committee to testify on 
the CARES Act implementation, the economy has improved. 
Unemployment has decreased. Nearly half of the jobs lost in the 
early days of the pandemic have been added back to the labor 
market, and our economy is safely reopening. We are on the road 
to recovery.
    Policies put into place by Treasury and the Fed, and 
actions you both have taken during this crisis, have put the 
economy on a more stable footing.
    However, important sectors of our economy, including 
hospitality, conventions, entertainment, retail, and commercial 
real estate remain in distress, and there are elements of your 
responses to the pandemic that could still be adjusted as we 
move forward. I look forward to discussing those today and 
hearing your plans to implement a strategy for long-term 
economic growth.
    Thank you.
    Chairwoman Waters. I want to welcome today's witnesses to 
the committee.
    First, I want to welcome Steven T. Mnuchin, the Secretary 
of the Treasury. He has served in his current position since 
2017. Mr. Mnuchin has testified before the committee on 
previous occasions, so I do not believe he needs any further 
introduction.
    I also want to welcome our other distinguished witness, 
Jerome H. Powell, Chair of the Board of Governors of the 
Federal Reserve System. He has served on the Board of Governors 
since 2012, and as its Chair since 2017. Chair Powell has also 
testified before the committee on previous occasions, so I do 
not believe he needs any further introduction, either.
    Each of you will have 5 minutes to summarize your 
testimony. When you have 1 minute remaining, a yellow light 
will appear. At that time, I would ask you to wrap up your 
testimony so that we can be respectful of the committee 
members' time. And without objection, your written statements 
will be made a part of the record.
    Secretary Mnuchin, you are now recognized for 5 minutes to 
present your oral testimony.

 STATEMENT OF THE HONORABLE STEVEN T. MNUCHIN, SECRETARY, U.S. 
                   DEPARTMENT OF THE TREASURY

    Secretary Mnuchin. Thank you.
    Chairwoman Waters, Ranking Member McHenry, and members of 
the committee, I am pleased to join you today to update you on 
how the Department of the Treasury and the Federal Reserve have 
been partnering over the last 6 months to provide relief for 
American workers and liquidity to credit markets, businesses, 
nonprofit organizations, State and local governments, and 
households. We are fully committed to getting every American 
back to work as quickly as possible.
    America is in the midst of the fastest economic recovery 
from any crisis in the United States. The August jobs report 
showed the economy has gained back 10.6 million jobs since 
April, nearly 50 percent of all jobs lost due to the pandemic. 
The unemployment rate decreased to 8.4 percent, a notable 
achievement considering many people thought it could get as 
high as 25 percent. Thanks to the programs provided by the 
CARES Act, we never got close to that figure.
    I believe we will see tremendous growth in the third 
quarter fueled by strong retail sales, housing starts, home 
sales, manufacturing growth, and increased business activity. 
The September Blue Chip survey projects close to 24 percent for 
third quarter GDP.
    The recovery has been strong because the Administration and 
Congress worked together on a bipartisan basis to deliver the 
largest economic relief package in American history. The 
Federal Reserve has been instrumental to the recovery by 
implementing unique Section 13(3) lending Facilities. Economic 
reopenings, combined with the CARES Act, have enabled us to 
have an economic rebound, but some industries particularly hard 
hit by the pandemic require additional relief.
    The President and I remain committed to providing support 
for American workers and businesses. We continue to work with 
Congress on a bipartisan basis to pass a Phase IV relief 
program. I believe a targeted package is still needed, and the 
Administration is ready to reach a bipartisan agreement.
    Treasury has been working hard to implement the CARES Act 
with transparency and accountability. We have released a 
significant amount of information on our website, Treasury.gov, 
and USAspending.gov. We have released more information than was 
required by the statute. The Federal Reserve has also posted 
information on its website regarding the lending Facilities.
    We have provided regular updates to Congress, with today 
marking my 6th appearance before Congress for a CARES Act 
hearing. We are cooperating with various oversight bodies: the 
new Special Inspector General; the Treasury Inspector General; 
the Treasury Inspector General for Tax; the new Congressional 
Oversight Commission; and the GAO.
    We appreciate Congress' interest in these issues and have 
devoted significant resources to responding. We remain 
committed to working with you to accommodate Congress' 
legislative needs and further whole-of-government approach.
    I would like to thank the members of the committee for 
working with us to provide economic support to the American 
people.
    Thank you.
    [The prepared statement of Secretary Mnuchin can be found 
on page 40 of the appendix.]
    Chairwoman Waters. Thank you, Secretary Mnuchin.
    Chair Powell, you are now recognized for 5 minutes to 
present your oral testimony.

 STATEMENT OF THE HONORABLE JEROME H. POWELL, CHAIR, BOARD OF 
            GOVERNORS OF THE FEDERAL RESERVE SYSTEM

    Mr. Powell. Thank you.
    Chairwoman Waters, Ranking Member McHenry, and members of 
the committee, thank you for the opportunity to update you on 
our ongoing measures to address the hardship wrought by the 
pandemic.
    The Federal Reserve, along with others across the 
government, is working to alleviate the economic fallout. We 
remain committed to using our tools to do what we can, for as 
long as it takes, to ensure that the recovery will be as strong 
as possible and to limit lasting damage to the economy.
    Economic activity has picked up from its depressed second 
quarter level when much of the economy was shut down to stem 
the spread of the virus. Many economic indicators show marked 
improvement. Household spending looks to have recovered about 
three quarters of its earlier decline, likely owing in part to 
Federal stimulus payments and expanded unemployment benefits. 
The housing sector has rebounded, and business fixed investment 
shows signs of improvement. In the labor market, roughly half 
of the 22 million payroll jobs that were lost in March and 
April have been regained as people return to work.
    Both employment and overall economic activity, however, 
remain well below their pre-pandemic levels, and the path ahead 
continues to be highly uncertain.
    The downturn has not fallen equally on all Americans. Those 
least able to bear the burden have been the most affected. The 
rising joblessness has been especially severe for lower wage 
workers, for women, and for African-Americans and Hispanics. 
The reversal of economic fortune has upended many lives and 
created great uncertainty about the future.
    A full recovery is likely to come only when people are 
confident that it is safe to reengage in a broad range of 
activities. The path forward will depend on keeping the virus 
under control and on policy actions taken at all levels of 
government.
    Since mid-March, we have taken forceful action, 
implementing a policy of near-zero rates, increasing asset 
holdings, and standing up 13 emergency lending Facilities. We 
took these measures to support broader financial conditions and 
more directly to support the flow of credit to households, 
businesses of all sizes, and State and local governments.
    Our actions taken together have unlocked more than a 
trillion dollars of funding, which in turn has helped keep 
organizations from shuttering, putting them in a better 
position to keep workers on and to hire them back as the 
economy continues to recover.
    The Main Street Lending Program has been of significant 
interest to this committee and to the public. Many of the 
businesses affected by the pandemic are smaller firms that rely 
on banks for loans rather than public credit markets.
    Main Street is designed to facilitate the flow of credit to 
small and medium-sized businesses. In establishing the 
Facility, we conducted extensive outreach, soliciting public 
comment and holding in-depth discussions with lenders and 
borrowers of all sizes.
    In response to feedback, we have continued to make 
adjustments to Main Street to provide greater support to small 
and medium-sized businesses and to nonprofit organizations, 
such as educational institutions, hospitals, and social service 
organizations.
    Nearly 600 banks, representing well more than half of the 
assets in the banking system, have either completed 
registration or are in the process of doing so. About 230 
loans, totaling roughly $2 billion, are either funded or in the 
pipeline.
    Main Street is intended for businesses that were on a sound 
footing pre-pandemic and that have good longer-term prospects, 
but have encountered temporary cash flow problems due to the 
pandemic and are not able to get credit on reasonable terms as 
a result.
    Main Street loans may not be the right solution for some 
businesses, in part because the CARES Act states clearly that 
these loans cannot be forgiven. Our credit Facilities have 
improved lending conditions broadly, including for potential 
Main Street borrowers. The evidence suggests that most 
creditworthy small and medium-sized businesses can currently 
get loans from private sector financial institutions.
    Many of our programs rely on emergency lending powers that 
require the support of the Treasury Department and are 
available only in unusual circumstances. By serving as a 
backstop to key credit markets, our programs have significantly 
increased the extension of credit from private lenders. 
However, the Facilities are only that: a backstop. They are 
designed to support the functioning of private markets, not to 
replace them.
    Moreover, these are lending, not spending powers. Many 
borrowers will benefit from these programs, as will the overall 
economy, but for others, a loan that could be difficult to 
repay might not be the answer, and in these cases, direct 
fiscal support may be needed.
    Our economy will recover fully from this difficult period. 
We remain committed to using our full range of tools to support 
the economy for as long as is needed.
    Thank you.
    [The prepared statement of Chairman Powell can be found on 
page 43 of the appendix.]
    Chairwoman Waters. Thank you very much, Chair Powell.
    I now recognize myself for 5 minutes for questions.
    I am very appreciative, Chair Powell, of the explanations 
that you are giving in anticipation of all of the questions 
that we have about Main Street and other Facilities.
    Earlier this month, our committee held a hearing on the 
need for further Federal assistance to State and Territorial 
Governments. Although each of the State Governors at that 
hearing can borrow through private markets at more attractive 
rates than the Municipal Liquidity Facility currently offers, 
they affirmed the need to keep the Facility as an option in the 
future, and the Guam Governor urged the Fed to make the 
Facility available to Territories.
    The Republican witness, Dr. Holtz-Eakin, a former 
Congressional Budget Office Director, and Staff Economist for 
President George H. W. Bush's Council of Advisers said, ``The 
mystery to me has been the performance of the Treasury in using 
essentially half a trillion dollars to backstop their 
Facilities, including the Municipal Liquidity Facility. This 
seems underutilized in my eyes, and I don't fully understand 
why that hasn't happened. That is something that can and should 
be more aggressively used.''
    So, Secretary Mnuchin, at a time when a wide range of 
businesses have been frustrated that they have been unable to 
access their Facilities, again, like the Main Street Lending 
Program, and we have heard the excuses that were given for 
that, and we have Republican and Democratic State Governors 
pressing for more assistance, do you agree there is more that 
Treasury can do with the $500 billion Congress provided you to 
enhance these Fed Facilities to support the economy?
    Secretary Mnuchin. I, unfortunately, think there is not 
more we can do. And part of the reason we agreed if there is 
potential legislation is to reallocate that money to better 
use.
    Almost every single one of the Facilities has extra 
capacity. I think that in the case of many businesses that 
haven't been impacted by the virus, they are able to borrow in 
the private markets.
    As it relates to Main Street, we have worked very hard with 
the Federal Reserve to roll out this program. It is based upon 
underwriting from pre-pandemic, and I know there has been some 
questions. We do expect to take losses on that, and we are 
working closely with the Fed on that Facility.
    Chairwoman Waters. Secretary Mnuchin, of the $600 billion 
available through the Main Street Lending Program, only about 
$1.2 billion has gone out the door to 118 companies. Would 
Treasury object to the Fed eliminating the Main Street Lending 
Program's minimum loan threshold of $250,000, so that small 
businesses and minority-owned businesses who need smaller loans 
could access the program?
    Let me just say, I am appreciative, because when we started 
out, when they first rolled out the Main Street Program, the 
minimum requirement for the loan was $1 million, and you did 
reduce that to $250,000. I am asking, can you go further in the 
reductions so that the loans can be made to smaller businesses?
    Secretary Mnuchin?
    Secretary Mnuchin. I would be fine lowering that to 
$100,000, and I will consult with Chair Powell afterwards on 
lowering it.
    Chairwoman Waters. Chair Powell?
    Mr. Powell. There is very little demand in the Facility 
below a million dollars. There isn't much interest at all below 
a million dollars. So, this would have to be a different kind 
of Facility. It wouldn't look like Main Street.
    I think extending credit in those small quantities would 
require a Facility built from the ground up that would be quite 
different than Main Street. It wouldn't have the same 
requirements. But we can talk about that. It wouldn't look like 
the current Main Street Facility, though. It is just a very 
different kind of a thing.
    Chairwoman Waters. I am aware of how the Main Street 
Facility was formulated, was created for the mid-sized 
businesses, and also I am very much aware that they have to 
repay those loans. But we have so many small businesses still 
eligible for PPP and beyond, and certainly they would repay 
those small loans that they could get. It is not that they are 
absolutely looking to have those loans waived.
    So, do you think that something can be done?
    Mr. Powell. It is possible. I really do, though, think that 
this is more appropriate for PPP loans, which are in the nature 
of grants. I think that is a better way to approach these.
    Trying to underwrite the credit of hundreds of thousands of 
very small businesses would be very difficult. And I think PPP 
is a better way to approach that space in the market, and I 
think you were well-advised to use that.
    Chairwoman Waters. Thank you.
    I now recognize the distinguished ranking member, Mr. 
McHenry, for 5 minutes for questions.
    Mr. McHenry. Thank you, Madam Chairwoman.
    Secretary Powell, let's begin here. In the Federal 
Reserve's own data, we see that there is a substantial economic 
recovery happening. We see economic numbers improving, and we 
have many households that are about the same as they were, or a 
little better off in terms of savings than back at the 
beginning of the year. But we see many households much, much 
worse off. And so it is sort of a tale of two different 
recoveries, if you will, or two different experiences of this 
pandemic.
    So while we see good economic numbers, what are the areas 
that you see as needing further assistance? What areas of our 
economy do you see as needing further assistance to get us back 
to something more normalized, given where we are with COVID?
    Mr. Powell. I guess I would point to the labor market to 
sort of capture the size of the issue. We still have 11 million 
people out of the 22 million who were laid off in the payroll 
numbers in March and April, still 11 million out there. And 
that is really good progress. We have put fully half of them 
back to work. But there is a long way to go. That is more 
people than lost their jobs during the global financial crisis, 
as I am sure you know.
    So there is a lot of work to do there, and our policies 
will support that, but it will go faster for those people if we 
have--if it is all of government working together.
    Mr. McHenry. Okay. Meaning that there is a fiscal response 
to help support the economy for those most affected by COVID, 
economically affected by COVID?
    Mr. Powell. Yes. Now, of course, the details of that are 
between Congress and the Administration, and not for the Fed to 
say. But I do think that the recovery will go faster if we have 
both tools continuing to work together, as they have so far, I 
think, worked very well together.
    Mr. McHenry. Okay. Thank you.
    Secretary Mnuchin, there is much that has been made up here 
on Capitol Hill about your negotiations on another CARES 
package like we passed back in March, that you negotiated. You 
are the lead Administration negotiator on that package, which I 
think, from all sources, was a very solid piece of bipartisan 
legislating, and I want to commend you for being the 
Administration's voice and negotiator on that project. And I 
think we got good results from the programs that you were then 
able to set up in coordination with the Fed.
    Along those lines, what are the components for the next 
package that we need to take to support the economy, to get 
things going again?
    Secretary Mnuchin. I think the next package should be much 
more targeted. It should be focused on kids and jobs and areas 
of the economy that are still hard-hit, particularly areas such 
as the travel business and restaurants. I think there is broad 
bipartisan support for extending the PPP to businesses that 
have had revenue drops for a second check. I think small 
businesses are a large priority of that.
    Mr. McHenry. Okay. So focused on small business and family 
support, right? And that would be a strong foundation, I 
assume, for this.
    Let me ask you both this, treatment, therapeutics, massive 
scale testing--we are getting up-to-speed with some really 
first-rate testing across the country and getting kids back in 
school in a safe way. Those things are sort of foundations for 
us getting the economy going to the next degree, right? It is 
not all going to be fiscal policy or monetary policy to get the 
people back in restaurants again. It is not government 
regulation. It is going to be people's decisions of whether or 
not to engage in many ways, similar to getting on airplanes.
    Along those lines, do you see the capacity for us to get to 
a full economic recovery, Secretary Mnuchin?
    Secretary Mnuchin. I do. I think it is just a question of 
time. And I would just highlight, we are extremely pleased that 
we have committed to 150 million point-of-care tests with 
Abbott that will be delivered between now and the end of the 
year, and we are working with other parties to deliver 
comparable amounts of point-of-care testing with instant 
results.
    Mr. McHenry. So, it is instant results. And those are very 
low-cost tests, are they not?
    Secretary Mnuchin. That is correct.
    Mr. McHenry. Okay. I thank you both for your testimony, I 
thank you for being here today, and I thank you for your 
leadership in the midst of this crisis. And I know we are still 
deeply in the midst of it, of the economic effects of COVID. 
And I want to thank you both for being there, both with the 
life insurance policy and with the water to put out the flames. 
You have worked in good stead on behalf of the American people. 
Thank you both.
    Chairwoman Waters. The time of the gentleman has expired.
    I now recognize Mr. Himes of Connecticut for 5 minutes.
    Mr. Himes. Thank you, Madam Chairwoman.
    And thank you, gentlemen, for being here.
    I am going to pick up on what the ranking member just said 
about the insurance policy. My time in Washington is bracketed 
by bailouts. Right before I got here, we passed the Troubled 
Asset Relief Program (TARP), which led to a massive bailout of 
the financial services industry and, of course, a bailout of 
the auto industry. And now, through CARES, we are bailing out 
the airlines; we are bailing out businesses large and small. 
The government is very, very much in the business of bailouts.
    I would point out to my friends on the Republican side that 
all of those bailouts were promoted and passed and promulgated 
by Republican Presidents. They might just bear that in mind as 
they accuse my party of being socialist, but that is a 
conversation for a different day.
    Secretary Mnuchin, I had the opportunity to talk to Chair 
Powell about this, so I want to talk with you about bailouts. I 
would like to believe we could do fewer rather than more. I 
don't like the idea of business managers large and small 
thinking that every 5, 7, or 10 years, the Federal Government 
will bail them out of liquidity crises or whatever it might be.
    I also like the idea, as long as we are going to do these 
things, that the American public be compensated for the use of 
their funds for private and commercial purposes. And I admire 
your efforts to get warrants and make sure that the American 
public is compensated.
    But there is a funny hostage situation that develops, 
right? When I proposed that on a caucus call, I instantly got 
calls from labor unions and the airline industry saying, no, if 
you make the money cost anything, they won't take it and they 
will fire us. That feels to me like a hostage situation: Give 
me the money for free or we will not take it and we will fire 
people.
    So, Secretary Mnuchin, I would love to give you much of the 
rest of my time. First, what do we need to do structurally to 
get out of the business of bailouts?
    And, second, how can we get out of this hostage situation, 
in which I think you actually worked very, very hard, where the 
American people are being compensated fairly for the use of 
their money for private purposes?
    Secretary Mnuchin. First of all, I would just say that this 
is a very different situation than the financial crisis, 
because in this case, the businesses that are impacted were 
impacted because of COVID, which was not their fault, as 
opposed to issues that they controlled.
    I would say, in the case of the airlines, I think we struck 
the right balance. We did get proper compensation for 
taxpayers. I think it was very important, given what went on in 
the travel industry. In the case of the national security loans 
that we have made to the trucking companies, we took a 30 
percent equity interest in that for proper compensation.
    So, I agree with you that the government should be properly 
compensated.
    On the other hand, I think for very small businesses, like 
the PPP, the money that we spent there, we saved significant 
money on unemployment on the other side.
    Mr. Himes. With respect to the warrants, Mr. Secretary, and 
the 30 percent equity stake in the trucking company, what is 
your philosophy? Is your philosophy to dispose of that position 
as soon as you can do so safely and in a sound manner, or is it 
to maximize the return to the American public?
    Secretary Mnuchin. I don't think it is to absolutely 
maximize the return, but I think that the American public 
should reap the benefit. So my expectation is that is not 
something we would liquidate now; we would liquidate when the 
markets are more normalized and the economy is back to normal.
    Mr. Himes. Let me run an offbeat idea by you. As it 
happens, I had the opportunity to talk to both former Treasury 
Secretary Paulson and another former Treasury Secretary about 
it. One of the vehicles for capturing common wealth for the 
citizens of a country is a sovereign wealth fund. As you know, 
Persian Gulf countries use it, Alaska uses it, Norway uses it, 
largely oil-driven wealth.
    Should Congress investigate, if we are going to be in the 
regular business of bailouts and receive a return on those 
bailouts, should we look at establishing a sovereign wealth 
fund in order to take the proceeds from that common wealth and 
either use it as an insurance fund or use it to disburse 
however we may choose to disburse? Is that an idea that makes 
any sense to you?
    Secretary Mnuchin. Let me just say that most countries that 
have sovereign wealth funds, or in the case of Alaska, it is 
typically for future generations where they are focused on, in 
the case of many places, energy and things like that, that will 
not necessarily be around forever.
    I don't necessarily think the U.S. should have a sovereign 
wealth fund. On the other hand, I think taking the profits and 
putting it into an account that is reserved for future 
emergencies is a very interesting idea, and I would be willing 
to explore it with you.
    Mr. Himes. Good. I am going to take you up on that offer. 
Again, I don't think any of us want to be in the persistent 
business of bailouts, but if we are going to do it, I think we 
should make sure that the American public is amply compensated 
for the use of their money.
    Thank you. I yield back the balance of my time.
    Chairwoman Waters. Thank you very much.
    I now recognize the gentlelady from Missouri, Mrs. Wagner, 
for 5 minutes.
    Mrs. Wagner. Thank you, Madam Chairwoman.
    Secretary Mnuchin and Chairman Powell, thank you for being 
here today.
    I have been hearing from employers across the Second 
District of Missouri who desperately need Congress to do its 
job and pass coronavirus relief legislation so they can do 
their jobs and keep handing out paychecks to their hardworking 
employees.
    Earlier this month, the Senate acted to pass relief 
legislation that could actually be signed into law. That 
package would have given relief to families, schools, child 
care providers, small businesses, and those who need it most. 
At a time when so many are struggling, we really do need to put 
America's families first.
    And I am sick of the partisan politicking, the partisan 
wish lists. It should have no place in this conversation. 
Congress should be laser-focused on providing targeted and 
immediate relief.
    The Senate Majority supports a second round of PPP money 
that would keep our small businesses afloat, and I call on my 
colleagues in the House to bring this to the Floor.
    Secretary Mnuchin, I am grateful also, as the ranking 
member mentioned, for your due diligence and your work in 
negotiating this and what it means for our small businesses, 
including, as you said, restaurants, the travel and events 
industry, dentist offices, and so many others that keep 
Americans employed.
    You talked a little bit about how passing the second round 
of the Paycheck Protection Program would keep America on track 
for a full economic recovery. How much money do you think we 
could repurpose from CARES in order to do this? And tell us 
again what this would mean in terms of economic recovery?
    Secretary Mnuchin. I agreed that we had approximately $450 
billion that was allocated to work with the Fed on the Section 
13(3) Facilities, and I agreed that I would reallocate $200 
billion of that, that is not being used. That obviously needs 
congressional support, but we would reallocate that. And, 
again, our priorities are kids and jobs.
    Mrs. Wagner. Right.
    Secretary Mnuchin. I think there is very strong bipartisan 
support for the PPP. I know that both committees in the House 
and Senate have worked on revisions that are necessary 
revisions, and we would look forward to working with both 
parties on that.
    Mrs. Wagner. And that could be passed today and signed into 
law today. Is that correct?
    Secretary Mnuchin. The President would very much support 
signing into law additional PPP money immediately.
    Mrs. Wagner. We must act. It is clear that the best 
economic stimulus package we can give to the American people is 
a fully open economy. It brings people back to work, allows 
economic growth to begin, and will restore our economy.
    Chairman Powell, do you agree that reopening has increased 
economic activity and jump-started the process of bringing the 
U.S. back to pre-pandemic prosperity?
    Mr. Powell. Yes, I do. We need to reopen the economy so 
people can go back to work, and we need to do it in a 
sustainable way. And that is why I always mention that a part 
of reopening quickly and effectively is to keep the virus under 
control, and that takes basic measures like wearing masks and 
things like that, and gets--the two things go together. A fast 
reopening and maintaining these sorts of measures actually go 
together.
    Mrs. Wagner. Absolutely.
    The President's plan to reopen America has enabled States 
to tailor their reopening plans to address the specific 
challenges in their States and regions.
    Chairman Powell, how does this State-by-State approach 
ensure success, especially when it comes to States that are 
responding differently to the pandemic? And are there any 
regulatory burdens you are aware of that should be removed to 
improve States' abilities to quickly and safely reopen?
    Mr. Powell. The question of how to reopen exactly and what 
policies to use, that is a question that is one for elected 
officials at the State and local level, not for the Federal 
Reserve, and so I wouldn't be a good judge of that.
    I would say in terms of regulatory adjustments, we have 
made a number that have been designed to allow banks to serve 
their customers in this. We have relaxed a number of 
regulations temporarily, and we think that has really helped 
them serve their customers in a way that doesn't at all 
endanger safety and soundness. We are open to doing more of 
that, but many of those things we have done. And, frankly, the 
economy is healing now, so--
    Mrs. Wagner. The economy is healing, and I do believe that 
many of the regulatory burdens that we have lifted are things 
that could be sustained even beyond this pandemic. So, I hope 
that this committee will be able to take a look at that as we 
go forward.
    I thank you for your answer.
    And I yield back, Madam Chairwoman.
    Chairwoman Waters. Thank you.
    I now recognize the gentleman from Illinois, Mr. Foster, 
for 5 minutes.
    Mr. Foster. Thank you, Madam Chairwoman. And I thank our 
witnesses, as well.
    Chairman Powell, the Fed recently announced hypothetical 
scenarios for the second round of bank stress tests, and unlike 
the results of the sensitivity analyses conducted earlier this 
year, you will be releasing bank-by-bank results.
    I appreciate this transparency and believe it is very 
important for markets, policymakers, and the banks themselves 
to have this information be public. One of the tragedies of the 
last financial crisis was that in the months prior to the 
crisis, as pressure built on financial institutions, they did 
not use this time to raise capital until it was too late. 
Hopefully, the prospect of publicly disclosed stress tests will 
help avoid a repeat of this behavior if the pandemic downturn 
continues.
    Now, you are going to be using the results of these stress 
tests to determine whether the restrictions on shareholder 
dividends and the prohibition on buying back shares will 
continue through the fourth quarter. So my first question is, 
will you be making these determinations on a bank-by-bank basis 
or will all of the large banks be subject to the same 
restrictions?
    Mr. Powell. Yes, that is going to depend on a lot of 
things, and those are decisions we will make down the road, but 
I think we will be looking probably to use the bank-by-bank 
approach.
    Mr. Foster. Thank you.
    And given the continuing high unemployment, the failure of 
the Senate to pass any new COVID relief, and the uncertainty 
and volatility of a large number of economic indicators, will 
you err on the side of conservatism and safety in making these 
determinations?
    Mr. Powell. I think the stress tests themselves always err 
on the side of safety. We think of very extreme scenarios, 
severely adverse scenarios, and so that has generally been our 
approach overall.
    Mr. Foster. I appreciate that.
    Will you be reanalyzing the living wills of the giant banks 
to ensure that they could be executed properly at a time of 
COVID pandemic with, for example, most of the workforce at 
home?
    Mr. Powell. We don't have any plans that I know of to 
change the schedule of doing that. Banks have to resubmit those 
on a regular schedule, and I think we will just stick to that 
schedule.
    Mr. Foster. Okay. I urge you to keep an eye on that, 
because if we have to execute them and it is not possible in 
the pandemic conditions, we will regret that.
    Potential problems may not be confined to a small number of 
giant banks. For example, the savings and loan crisis was the 
result of losing bets made by over a thousand smaller 
institutions, and the taxpayers ended up on the hook for 
bailouts amounting to about 2 percent of GDP, which is huge 
compared to TARP, in which the taxpayers actually got their 
money back with at least some interest.
    And given that the fates of small banks are more closely 
tied to the fates of small and medium-sized businesses, which 
are often most at risk of business failure during the failed 
response to this pandemic, what should we be worried about in 
regards to the potential need to bail out large numbers of 
smaller banks if the pandemic continues?
    Mr. Powell. I guess I would say we spent 10 years, and the 
banks spent 10 years strengthening their capital, their 
liquidity, and their understanding of the risks and their 
management of them, and so far, the banking system has held up 
well.
    Now, we don't know where we are in this whole process, so 
we will be continuing to, as you can see from the stress tests, 
continuing to do those things that we need to do to continue to 
assess those things in the banking system. But so far, we don't 
see the kinds of problems you are talking about.
    I think with smaller banks, the issue is that there has 
been a 30-year trend of consolidation and banks going out of 
business, and that is not a trend we want to do anything to 
exacerbate. I do think that smaller banks are going to probably 
bear too much of the burden here. They have more exposure to 
real estate and to smaller businesses, which are probably more 
vulnerable and have less resources to deal with this sort of 
stress.
    I think we will be watching carefully to make regulatory 
adjustments, supervisory adjustments, to make sure that we give 
those banks every chance to serve their customers and to make 
it through this difficult time.
    Mr. Foster. Yes. Thank you. One of the problems that we 
have in financial regulation is that we always seem to be 
fighting the last war, and we maybe should look two wars back 
in this.
    In my limited amount of time left, you introduced a new 
strategic framework for conducting long-term monetary policy, 
and as part of that you discarded the idea of a fixed goal for 
full employment. Instead, you are going to consider a wide 
range of indicators in making an assessment of whether there 
are any shortfalls in employment. And I urge you to do that 
very publicly and transparently, because you can get different 
answers by choosing different measures, both for inflation and 
for unemployment.
    Thanks. My time is up. I yield back.
    Chairwoman Waters. Thank you very much.
    I now recognize the gentleman from Kentucky, Mr. Barr, for 
5 minutes.
    Mr. Barr. Thank you, Madam Chairwoman.
    And I want to first start by responding to my friend 
Representative Himes' comments about bailouts, because I share 
my friends antipathy for what he describes as bailouts. But I 
do think it is important to point out that a bailout, at least 
the way I look at it, implies that the government is saving 
businesses from mismanagement or excessive risk-taking or the 
use of taxpayer funds for private use in a way that would 
promote moral hazard.
    We saw some of that, I think, in the aftermath of the 
financial crisis, but that is not what we have here. What we 
have here is a congressional response to many State and local 
governments imposing restrictions. Now, some of those 
restrictions may be very warranted in response to a pandemic. 
Others may criticize some of those restrictions as being 
overzealous or draconian.
    But, nevertheless, this congressional response in the CARES 
Act or the PPP program or the Main Street Lending Program or 
some of these liquidity Facilities seem to me more like a 
compensation for a regulatory taking. So, I think it is 
important to point out that distinction, a regulatory taking.
    I do want to ask Chairman Powell about Main Street, and I 
do think there is interest among potential borrowers to 
participate in this program. But many businesses and lenders 
are reporting to us in Congress that the program is not working 
for them. To date, the Fed has committed less than one-half of 
1 percent of the total available funds under the program, and 
so an argument can be made that the program isn't performing to 
its full potential.
    Last week, the Fed issued updated FAQs about the program, 
and I have heard from banks in my district that the updates are 
unlikely to move the needle.
    You mentioned that smaller loans for smaller businesses 
under a million dollars--that this program may not be right for 
them; it is more suited to a PPP. But, Chairman Powell, I would 
offer for your consideration that for some of those businesses 
that would need a smaller loan, the PPP program really doesn't 
help them because their payroll is fairly limited and they have 
larger amounts of debt.
    So my question initially would be, is the Fed considering 
publishing more targeted guidance, underwriting standards, 
documentation requirements for the smallest Main Street loans?
    Mr. Powell. As you know, Mr. Barr, the limit now is 
$250,000, and we actually have very little demand below $1 
million, as I told the Chair a while back. So, we are not 
seeing demand for very, very small loans. Because the nature of 
the Facility and the things you have to do to qualify, it tends 
to be sort of larger-sized businesses.
    Lending at the very small end, under $100,000, it tends to 
involve a lot of personal guarantees--you are lending to a 
person and that person is guaranteeing what is a very small 
business, and that just is not a Facility that we currently 
have. We would have to start from scratch to develop that.
    Mr. Barr. Fair point. Just the feedback we are getting is 
that, for those smaller loans, the lenders are telling us that 
they really would prefer to use their existing structuring, 
underwriting, and documentation and account monitoring 
processes in order for them to get into that smaller level of 
loan.
    I want to talk about EBITDA restrictions in the program, 
too. The restrictions that we have in the program right now do 
prohibit many commercial real estate borrowers from accessing 
the program. In the FAQs released last Friday, you indicated 
the Fed had studied whether to allow for collateral-based 
calculations for asset-heavy borrowers but, ``determined that 
conditions do not warrant such changes at this time.''
    How did you come to this conclusion? And are there ways to 
retool Main Street to work for commercial real estate 
borrowers?
    Mr. Powell. We have spent with Treasury a great deal of 
time looking, because we hear these things, too, probably from 
the same people, and we look for places where the banking 
system, the lending system is not working for commercial real 
estate.
    And a big part of that, of course, is the commercial 
mortgage-backed securities (CMBS) market, and we don't have an 
answer to that, because there are a couple of problems with 
CMBS that make it impossible to make additional loans, for 
example, and the servicers have to pay. So, it's hard to get 
foreclosures.
    So we look at other places in commercial real estate, and 
really it is not easy to find places where we could have much 
of an impact.
    Mr. Barr. And I appreciated our conversation earlier where 
you said that the Fed's emergency lending powers may be not 
particularly suited for CMBS.
    But, Secretary Mnuchin, I appreciate the communication with 
your team on this issue and particularly CMBS. Could you detail 
what Treasury is doing to monitor and respond to these 
challenges facing commercial real estate?
    Secretary Mnuchin. First of all, I am sympathetic to the 
issue, and we have spent a lot of time internally trying to 
figure out if there is a way we could structure a program with 
the Fed.
    And as the Fed Chair said, unfortunately, there is a 
structural problem with limitations and additional debt and 
prepayment penalties. I think the best way to help many of 
these is with additional PPP funds so that people can pay rent, 
so that owners can pay their mortgage.
    Mr. Barr. Thank you. I yield back.
    Chairwoman Waters. The gentleman's time has expired.
    I now recognize the gentlelady from Ohio, Mrs. Beatty, for 
5 minutes.
    Mrs. Beatty. Thank you, Madam Chairwoman. And I thank the 
witnesses, as well.
    We have heard a lot today about reopening the economy. We 
have also heard a lot about the pandemic, health and safety. 
And, Chair Powell, you even used the words, ``they go hand in 
hand'' and actually used the words and pointed to your mask, by 
wearing a mask. All of that is a part of it.
    So to you, Mr. Secretary, we recently learned that the 
White House had scrapped plans at the United States Postal 
Service to send approximately $650 million worth of masks 
through the mail. Maybe that is because President Trump sees no 
value and tweets about not wearing one. You have had a lot of 
involvement with the operations and governance of the U.S. 
Postal Service. Were you involved in that situation about 
scrapping the plans or are you aware of it?
    Secretary Mnuchin. Just to be clear, I think I read 
something in the press about that alleged situation. Never, in 
any of my task force meetings, do I recall that being discussed 
or any plan being scratched whatsoever. It may have occurred in 
a different part of the government. But, no, I have not heard 
anything about that.
    Mrs. Beatty. Would you be willing to look into it since 
we--most experts, not me, certainly, as a Congressperson, but 
certainly scientists and medical personnel have all stated that 
wearing a mask is helpful in preventing the spread now that we 
know over 200,000 people have died. Would you look into that, 
since you have had involvement with the U.S. Postal Service?
    Secretary Mnuchin. I would be happy to, and we will get 
back to your staff.
    Mrs. Beatty. Thank you very much.
    My next question is, certainly we know that when we talk 
about reopening the government, would you both agree if people 
are healthy and if they have healthcare, then that, too, goes 
hand in hand with reopening the economy by having people be 
healthy enough to go back to work? That is a yes-or-no 
question.
    Chair Powell?
    Mr. Powell. Yes. Sure.
    Mrs. Beatty. Mr. Secretary?
    Secretary Mnuchin. Yes. And I just would add that one of 
the reasons we liked the PPP is that it kept employees 
connected to their businesses, which in many cases allowed them 
to keep their healthcare.
    Mrs. Beatty. Okay. Earlier this year, the Trump 
Administration submitted a brief to the Supreme Court urging 
them to overturn the Affordable Care Act, which would strip 
roughly 20 million Americans of their healthcare in the midst 
of this historic pandemic that has already cost the lives of, 
we know today more than 200,000 Americans, including stripping 
protection for preexisting conditions, and kicking many of our 
younger adults off their plans. We are also hearing now about 
how great their numbers are. I have been in Congress for 8 
years, and I have voted against it dozens of times.
    Chairman Powell, what effect would stripping 20 million 
Americans of their healthcare in the midst of this COVID-19 
pandemic have on the economy?
    Mr. Powell. I wouldn't want to comment on a particular 
Supreme Court case. But as you mentioned, healthcare is an 
important part of the support system that people need.
    Mrs. Beatty. Let me say it this way, Mr. Chairman. Do you 
think stripping healthcare or not having healthcare would be 
bad for the economy?
    Mr. Powell. As you started with, I think that having 
healthcare coverage is an important basis for people to go to 
work. It is one of the reasons people do work, and it helps in 
continuing your work.
    Mrs. Beatty. Would you say that is a yes? Then, would you 
say that is a yes, that having healthcare would certainly be a 
plus or a positive to having people--come on, 200 million 
people have died. Look at the numbers. If I look at African-
Americans making up 13 percent of the population but having 
almost 30-some percent positive results, with 24 percent dying, 
don't you think healthcare plays into keeping people healthy, 
and the economy?
    Mr. Powell. Yes, I do.
    Mrs. Beatty. Thank you.
    Chairman Powell, according to the transaction data of the 
Secondary Market Corporate Credit Facility that the Federal 
Reserve published on Sunday, the Fed purchased corporate bonds 
of dozens of companies that are in good financial condition, 
like Apple, which has more than $200 billion cash in hand.
    How does buying corporate debt of large companies in good 
financial condition help further the Fed's mandate? And how 
does buying corporate debt of foreign-owned companies, like BP 
and Toyota, further the Fed's mandate?
    Mr. Powell. None of those secondary market corporate debt 
purchases extend any new credit to anybody, so that is just 
buying an outstanding bond. And the reason we are doing that is 
to have a footprint in the after market, which, should 
conditions deteriorate, would enable us to continue to have 
good financial conditions, which would support companies and 
allow them to keep workers on staff.
    Mrs. Beatty. Okay.
    Chairwoman Waters. Thank you. The gentlelady's time has 
expired.
    I now recognize the gentleman from Texas, Mr. Williams, for 
5 minutes.
    Mr. Williams. Thank you, Madam Chairwoman.
    As most of you know, I am a small business owner.
    I want to thank both of you for coming before our committee 
today. Both the Treasury Department and the Federal Reserve 
have worked with incredible speed to implement the CARES Act 
and get resources in the hands of hardworking American 
businesses. I applaud you both for your leadership and your 
efforts during these uncertain times, and Main Street America 
also thanks you.
    Some local governments in my district in Texas are sitting 
on the money they received from the corona relief fund because 
there is uncertainty surrounding what counts as an eligible 
expense. For example, one local government in my district would 
like to spend the money to buy food for a local food pantry 
since many of their citizens are seeing food insecurity as a 
result of the economic shutdowns, but they are unsure that this 
will be an eligible expense, since the cost was not accounted 
for in their annual budget prior to the pandemic.
    So, Secretary Mnuchin, what advice would you give these 
local governments that are unsure if a use for the coronavirus 
relief funds will be deemed a qualified expense so we can get 
this money spent?
    Secretary Mnuchin. We will look into your specific question 
and get back to you, but I will say that we have tried to give 
as much flexibility as we can. And as part of additional 
congressional authorization to move forward, we are inclined to 
allow for additional flexibility on the money that has already 
gone out to State and local governments.
    Mr. Williams. Thank you, and we will get something for you 
to look at.
    Chairman Powell, I raised this issue with Vice Chairman 
Quarles back in May, but I wanted to get your perspective as 
well to make sure everyone at the Federal Reserve is on the 
same page regarding business interruption insurance.
    Forcing private companies to cover business interruption 
claims for COVID-19 losses would be a terrible precedent of the 
government stepping in and retroactively changing the terms of 
an agreement between two private parties, and would decimate 
the insurance industry. I have said before, in Texas we say, 
``A deal is a deal.''
    And the last time you were in front of this committee in 
June, you mentioned you were aware of this issue as it relates 
to fiscal stability, and I am hoping we could get a little more 
substance on this issue since the Federal Reserve is involved 
in insuring Federal institutions, including the insurance 
companies that do not pose a risk for our financial systems.
    So my question would be, can you please give us your 
thoughts on forcing insurance companies to retroactively cover 
business interruption claims?
    Mr. Powell. I don't think I have had a conversation about 
that since our last visit together in June, but let me check in 
on the current situation and come back to you.
    Mr. Williams. Okay. That would be great. Thank you.
    And both of you have discussed the potential need for 
another economic stimulus package to come through Congress. We 
have done that today. However, at the moment, much of the money 
that we allocated in the CARES Act and other aid packages has 
not yet been spent. The nonprofit Committee for a Responsible 
Federal Budget estimates that the government has allocated or 
disbursed $2.2 trillion of the $4 trillion that Congress has 
passed in COVID relief.
    Mr. Secretary, you have been deeply involved in 
negotiating, as we very well know, the next COVID-19 relief 
package. And as we discuss spending new money, how would or how 
should we be viewing the economy to ensure that industries in 
most need of assistance receive it while the other money we 
have already allocated makes its way into the system?
    Secretary Mnuchin. I think we are in a very different 
situation than we were last time. I think last time, the entire 
economy was shut down and we had to act very quickly, and in 
many cases, that required us to do things across-the-board. I 
think this time it should be much more targeted to the 
industries that are most impacted by this situation.
    Mr. Williams. Thank you. And I want to thank you again for 
your efforts and basically tell you, as somebody who is on Main 
Street, the economy is pretty good right now. It is getting 
better, and attitudes of people in startups are getting better. 
I hope one day we can look at liability toward a lot of small 
businesses and big businesses that could keep them from 
growing.
    So, thank you again for your efforts. We appreciate it.
    And I yield back. Thank you.
    Chairwoman Waters. Thank you.
    I now recognize the gentleman from Washington, Mr. Heck, 
for 5 minutes.
    Mr. Heck. Thank you, Madam Chairwoman.
    Chairman Powell, I want to discuss fiscal support today, 
but before I do, I want to quickly address the announcement 
that the Fed made to take steps to make the inflation target 
more symmetric and emphasize the employment mandate, the new 
framework that Dr. Foster referred to.
    I am not at all exaggerating when I say this new framework 
is the most important thing that has happened in monetary 
policy, indeed in economic policy, in 40 years in this country. 
It will have a bigger impact on absorbing heretofore 
marginalized [inaudible] Especially among communities of color. 
Your leadership in shepherding [inaudible] Needs to be 
acknowledged [inaudible].
    Chairwoman Waters. Excuse me. Mr. Heck, speak right into 
the microphone so that we can hear you clearly.
    Mr. Heck. I hope he was able to hear all of my comments. 
Can you hear me now, Madam Chairwoman?
    Chairwoman Waters. Yes.
    Mr. Heck. Thank you.
    Chairman Powell, thank you very much for the new framework.
    At the outset of this pandemic you declared that, ``This is 
the time to use the great fiscal power of the United States to 
do what we can to support the economy and try to get through 
this.'' Congress responded by passing the CARES Act, and 
Congress continues to deliberate further fiscal support.
    At your press conference on Wednesday, you said that the 
Federal Reserve's projections for growth, inflation, and 
employment were assuming more fiscal support. What size support 
were you assuming?
    Mr. Powell. Let me say that I think a big part of the good 
economic news that we have had results from the fiscal support 
that came with the CARES Act. So it deserves a lot of the 
credit for keeping people spending and keeping business 
confidence and household confidence high.
    We don't agree on a forecast. Individuals make different 
assumptions. I think something like--most private sector 
forecasters are assuming that some kind of a package passes 
sometime in the next few months, but there isn't any particular 
number that I would give you that would come out of the Fed.
    Mr. Heck. But is it not true, Mr. Chairman, that the Fed 
did itself make projections as to growth and inflation and 
employment? And if so, acknowledging that it assumed fiscal 
support, there must have been some assumption about the level 
of fiscal support.
    Mr. Powell. Actually--
    Mr. Heck. How else would you arrive at your projections?
    Mr. Powell. Yes. I wish it were that simple.
    The way we do it is we--what we publish is the individual 
projections of the 17 people who vote or who are, sorry, 
participants on the Federal Open Market Committee (FOMC), and 
they are free to make whatever assumptions they need. And we 
don't survey them on every little thing, but I would say most 
assumed some fiscal action. But we didn't create a table, and 
so I can't tell you exactly what was assumed, but fiscal action 
underlies many, many current forecasts.
    Mr. Heck. Then, let me try this a different way. What 
happens to growth in employment if there isn't any fiscal 
support and it doesn't materialize?
    Mr. Powell. What has happened lately is that the economy 
has proved resilient, both to the broader spread of the disease 
over the summer in some of the southern and western States and 
also to the expiration of the CARES Act benefits. So, we don't 
really know what will happen.
    I would just tell you what I think the risk is. As some 
have pointed out, savings are very high, and that is because of 
a number of things. Part of it is the CARES Act. But there are 
still 11 million people unemployed.
    So the risk is that over time, they go through those 
savings, and they haven't been able to find employment yet 
because it is going to take a long time to get--or it is going 
to take a while to get 11 million people back to work. And so, 
their spending will decline. Their ability to stay in their 
homes will decline. And the economy will begin to feel those 
negative effects at some time.
    At the same time, the economy is recovering, and that is a 
good thing. And it is very hard to have any certainty about the 
path forward because we don't know which of those two forces 
will dominate.
    Mr. Heck. With all due respect, Mr. Chairman, unless you 
are arguing that fiscal stimulus has no impact, then is it not 
inescapable that if there is no additional fiscal support, 
growth will be lower?
    Mr. Powell. Yes. Certainly fiscal, and I have said that I 
think it will likely be needed. I do defer to the 
Administration and Congress, who actually have the 
responsibility for this. But I think that it is likely that 
more fiscal support will be needed.
    Chairwoman Waters. Thank you. The gentleman's time has 
expired.
    Mr. Heck. Thank you, Madam Chairwoman.
    Chairwoman Waters. I now recognize the gentleman from 
Arkansas, Mr. Hill, for 5 minutes.
    Mr. Hill. Thank you, Madam Chairwoman.
    And of course, thank you, Secretary Mnuchin, for being with 
us here today.
    And Chair Powell, it is terrific to see you.
    I want to associate myself with the remarks of the ranking 
member, who outlined really the outstanding leadership we have 
obtained from the Treasury and from the Federal Reserve, 
particularly in the early days of fighting the virus. And we 
appreciate your commitment to our country, to restore the 
health of the American people, and renew our families' belief 
in the American Dream, and in your own ways, to rebuild the 
American economy.
    I want to talk for a minute about this issue for smaller 
businesses, and I plan on signing the discharge petition in the 
House today to move Congressman Chabot's bill to the House 
Floor, which extends the PPP program and clarifies the 
forgiveness aspects of that.
    This is something that should have been done at the end of 
July, and I was pleased that last week, Democratic Members of 
Speaker Pelosi's caucus were objecting to her leadership, or 
lack thereof, in trying to negotiate this COVID package. I hope 
my Democrat colleagues will join me in signing that discharge 
petition, because the PPP extension, as Secretary Mnuchin 
outlined, is a key component to having the tools necessary for 
the small business recovery.
    Second, in my view, the proposal by Mr. Rubio that is in 
the Senate bill on the 7(a) loan program is critical because it 
allows us to take this embedded loss of the last 6 or 8 months, 
or that we think is coming, and put it on a 20-year am at a 1 
percent rate as an SBA product. And it is a much better 
solution than the emergency loan program that the SBA has used 
during this pandemic, which is really geared towards a 
hurricane and not to a national pandemic.
    But the third point is the Main Street Program, and both of 
you know my views on this as we have talked about it in an 
oversight commission hearing, as well as privately. On Friday 
at 1 p.m., in a typical Washington, D.C., fashion, the Fed 
released its frequently asked questions and dumped them out to 
the public on Friday afternoon, that you would not pursue this 
asset-based lending type approach for a different Main Street 
term sheet. Mr. Barr did a good job describing that.
    I really think that can be done, Chairman Powell, to 
companies on sound footing, to companies that are not able to 
reach credit traditionally under reasonable terms, and in the 
concept of a backstop.
    And so, I want to press both of you that while it doesn't 
fit the Main Street term sheet you have today, that took 4 
months to stand up, I still believe that asset-based lending to 
a solvent company is important.
    And you had a key component, another Washington key 
component in the frequently asked questions, where you said, 
``at this time.''
    So I would urge you to reconsider your position on asset-
based lending and offer you each an opportunity to comment.
    Mr. Powell?
    Mr. Powell. We have taken a very close look at it, as you 
know, and as the Secretary indicated, but we are happy to 
continue the conversation, and we will do that with you.
    Mr. Hill. I really do believe it can be done in the right 
way. And I think the three things I commented on, the first 
two, the 7(a) program and the PPP loan where I addressed this 
lower loan size that the Chair mentioned, but I do believe 
there is a solvent niche out there of portfolio lending that 
can be done on a sound basis that would offer some liquidity 
for hospitality, particularly not CMBS per se, but portfolio 
lending where they have this gap that we saw after 9/11 and we 
saw after the financial crisis of very slow increases in 
business travel.
    Secretary Mnuchin, you commented that you would like 
Congress to give you authority to incur risk as it relates to 
the $500 billion in funding for the Exchange Stabilization 
Fund, or particularly the 454 that was not related to airlines, 
and that you proposed to reprogram that money for other uses. 
But when we had a discussion of this in the oversight 
commission, we have issued in our fourth report that we don't 
believe that you need any additional congressional authority to 
reprogram that and take on additional risk.
    Could you comment on that please?
    Secretary Mnuchin. Let me just be clear. I don't think we 
need authorization to take on additional risk. And let me 
clarify, I think on the Main Street loans, in general, we will 
be taking losses, because I think this is basically being 
underwritten on pre-corona EBITDA.
    What I was suggesting is that we would like to spend that 
money on other areas of the economy that could be better 
served--kids, jobs, more PPP, SBA long-term loans--and that, 
unfortunately, we do need congressional authority to use it in 
other areas.
    And again, I think, as you know, we have a lot of money 
left over in the PPP that has been appropriated by Congress, 
that with simple legislation, could allow many hardworking 
small businesses to get a second loan.
    Mr. Hill. Thank you both for your leadership.
    Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you.
    I now recognize the gentleman from California, Mr. Vargas, 
for 5 minutes.
    Mr. Vargas. Thank you very much, Madam Chairwoman. I 
appreciate it.
    I want to thank the Secretary, of course, and also the 
Chairman for being here today. I appreciate your testimony very 
much.
    I have to say I have heard some pretty tortured language 
and tortured logic from some of my colleagues today. One Member 
said that we are not bailing out businesses, ``compensation for 
a regulatory taking.'' That sounds a lot like, ``use my words 
against me,'' when you say you won't vote for a Supreme Court 
Justice in an election year for President. The reality is when 
you talk in absolutes, you get into these situations where 
logic gets twisted to try to fit things.
    And the other thing I heard today is that Congress should 
pass a second CARES Act. We did that. We passed it. It is 
called the Health and Economic Recovery Omnibus Emergency 
Solutions (Heroes) Act. It is languishing over in the Senate.
    Then, I heard another colleague say we should do what the 
Senate did and pass what they did. They didn't pass anything. 
The Senate didn't pass a thing. They tried to pass something, 
but nothing passed.
    The other thing I guess I heard today also was a pretty 
rosy picture of the economy. And I don't want to put words in 
people's mouths, but, Mr. Secretary, I believe you said that 
the economic recovery was strong.
    I think that tens of millions of Americans would disagree 
with that and, in fact, would say that the stock market is not 
the only economy. We have 11 million Americans who are still 
out of work, who lost their jobs, more than in the financial 
crisis. So, I don't think that they would agree that we have 
had this strong recovery.
    I do agree with what the Chairman said, that we won't get a 
full recovery until everyone feels that they are safe from this 
virus, and so I think it is very important that we do 
everything we can to defeat it. But unfortunately, up to now, I 
think the virus has been in charge.
    So, I want to ask this. I have been watching what has been 
happening in Europe. It seems like they are starting to get a 
second wave. I am very concerned that we may have a second wave 
in our own country, and I am not sure that we are prepared for 
this.
    I also went back and did a lot of reading on the Spanish 
flu and saw that their second wave was the more devastating 
one, not the first one, but the second wave of the Spanish flu.
    Could you comment, either one of you, on how prepared we 
are? What is our plan in case this thing comes roaring back?
    Secretary Mnuchin. I would just first comment on--I did say 
there is a strong recovery, because when you close the economy 
and you reopen it, it is strong, but there is still more work 
to do.
    As it relates to being prepared--and again, I am not a 
health professional, although I have sat on the task force--I 
think we have made major progress on vaccines, on virals, on 
testing, and, I think, on PPE. So, I think we have done a very 
good job at being prepared for the virus.
    Mr. Vargas. But do we have a plan? Do you have a plan in 
case it comes back? In fact, a virus usually has some 
seasonality to it, and you would expect in the winter for it to 
come roaring back. We have seen that before. If it does come 
back--assume it does--do we have a plan? Does the 
Administration have a plan?
    Secretary Mnuchin. First, from an economic standpoint, we 
do have a plan for the economy now, and that is why we want 
more congressional approval.
    As it relates to health, yes, the Administration and the 
task force does have a plan. It is executing that plan. And a 
major component of that plan is the vaccine development, which 
is making great progress.
    Mr. Vargas. Thank you.
    Mr. Chairman, if I may ask you, you said that until people 
feel that they are not at risk, the economy won't come back. 
Could you elaborate a little more on that?
    Mr. Powell. Sure. There are parts of the economy that 
involve people getting very close together in groups, and that 
is travel, hospitality, entertainment, things like that. And I 
think people will--not everybody, but some part of the 
population will be reluctant to continue in those activities 
until they feel confident that it will be safe, that they won't 
get sick from doing so.
    And that is not most of the economy; that is a piece of the 
economy. It is a reasonably substantial piece of the economy, 
where a number of people, millions of people are still not 
working, and it will probably take some time for them to get 
back to work.
    So, getting them back to work will depend on continued 
progress on the medical front, including, ultimately, a 
vaccine.
    Mr. Vargas. I think my time has expired, and I yield back. 
Thank you very much.
    Chairwoman Waters. Thank you.
    I now recognize the gentleman from Georgia, Mr. Loudermilk, 
for 5 minutes.
    Mr. Loudermilk. Thank you, Madam Chairwoman.
    Secretary Mnuchin and Chairman Powell, thank you for being 
here. And let me also echo the thanks for early on in this 
pandemic, especially with the PPP program, the way our offices 
worked together and your offices worked with the banks in our 
communities to tailor this thing to where it would actually do 
something for the small businesses.
    And as a result of that, one of the small banks in my 
district that only has two branches ended up making more PPP 
loans than one of the major national banks did nationwide. And 
that is just one of the many successes of the PPP, but it is 
because of the engagement there.
    I have two questions, but first, I would like to respond to 
something my good colleague from California just brought up 
about the recovering economy. I think there are areas of this 
country where the economy is recovering strong, and the State 
of Georgia is one of those. Our revenue reports came out just a 
little over a week ago that tax revenues for 2020 are 7.7 
percent higher than 2019. And it is because instead of using a 
heavy-handed government putting long-term restrictions on the 
people, we decided to trust the people that they would be safe 
and secure, and we opened our economy.
    So I think if other States would like to see that type of 
economic recovery, maybe they should address the way that their 
States are being governed.
    I know the Federal Reserve is looking at ways of broadening 
the Main Street Lending Program, which I think we all realize 
needs to be broadened. But there are some areas I would like to 
see us take a look at, and one of those industries that is 
interested in Main Street lending is specialized consumer 
finance firms, which are nonbanks that purchase credit card 
receivables from card-issuing banks and they securitize those 
assets, which enables consumers with subprime credit to access 
a credit card, which are some of the most vulnerable in society 
right now. But the earnings before interest, taxes, 
depreciation and amortization (EBITDA) requirements prevent 
them from obtaining a loan.
    Chairman Powell, would you consider modifying Main Street 
lending to allow these firms to access this program?
    Mr. Powell. I would have to look at that in particular. 
EBITDA is a very standard cash flow measure. If you are going 
to make a cash flow loan in our markets, you are going to look 
at EBITDA. The alternative is something asset-based. And I 
don't know these companies to know exactly what we are talking 
about, but we are happy to take a look.
    Mr. Loudermilk. I will make sure that our staff engages 
with yours to give you some of the folks who are looking to do 
that, and I think it would be wise.
    Another issue, back to the PPP program, Mr. Secretary, is 
that the forgiveness of the PPP loans is very cumbersome, and 
it is putting some of the banks, such as the one I had brought 
up earlier, Vinings Bank, into a situation where they are 
keeping those loans on their books longer than they had 
intended to.
    Is there something that we can do to streamline this 
forgiveness program so it is less cumbersome, so we can start 
getting those loans off the books of the small banks to open 
them up to make other, more traditional business loans?
    Secretary Mnuchin. We have tried to streamline the process 
for the smaller loans, as you outlined. I know that there are 
some proposals in Congress, and as part of legislation, we have 
worked with both committees on that, making sure we have the 
right balance of protecting for fraud with simplification.
    Mr. Loudermilk. Okay. And I assume that you would be 
willing, if Congress took some action there, to work with us on 
that.
    Thank you both. I know these have been challenging times, 
but I think the Administration has responded admirably and 
well, considering the severity of this crisis. And I think we 
just--if we keep on track and keep pushing forward, we can get 
through this and make our economy as strong as it was before, 
if not stronger.
    And, Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you.
    I now recognize the gentleman from Texas, Mr. Gonzalez, for 
5 minutes.
    Mr. Gonzalez of Texas. Thank you, Madam Chairwoman.
    And thank you, Chairman Powell and Secretary Mnuchin.
    Folks, I represent many small business hoteliers in my 
district, many of whom are first- and second-generation 
Americans who have worked hard to achieve the American Dream. 
As a result of COVID-19 and subsequent travel shutdowns, and 
through no fault of their own, family-owned and operated hotels 
in Texas and across the country are facing an unimaginable 
economic crisis with no ability to access a lifeline through 
the Main Street Lending Program.
    Despite repeated requests from Congress, including my own, 
the MSLP facts released on September 18th state that conditions 
did not warrant changes to allowing lending to asset-based 
borrowers. There is nothing else for these people to turn to.
    I want to make sure I understand your message to them. 
Right now, we have money on the table, programs that are not 
being used, and programs that are being used that are not quite 
compliant with the CARES Act, and programs that have been 
drained of funding because they worked. Your position is that 
these businesses should be allowed to fail, that hardworking 
Americans should lose their livelihoods, and that you will do 
nothing to help them.
    You want to carefully follow the law, right, on the CARES 
Act? Well, we passed the CARES Act, and to the extent that you 
are not in compliance with the programs included there, it is 
time to get that done. Failure to do so would not constitute 
following the law. You either are or you are not complying with 
the law. And you do not have programs that comply with the 
CARES Act distribution of funding.
    We may be in a crisis now, but I am sure you can imagine 
what will happen after the crisis when we start picking up the 
pieces and scrutinizing the actions of your agencies. Right 
now, we are using the powers given to you for explicitly this 
purpose, and you are using the powers for explicitly this 
purpose for both you, and so you can help the country.
    Businesses need a lifeline, they are not even asking for 
bailouts, businesses like the ones I am talking about. Lending 
them money for 10 or 20 or 30 years at a low interest rate 
creates the liquidity that the markets need. And recognize that 
if all commercial properties start defaulting, we are looking 
at another wave of a crisis, aren't we? And what are we doing 
to prepare now and help them now and do the work now?
    Secretary Mnuchin. I would first say I think we are 
following the law, so let me just be clear on that.
    The second thing I would say is that we want to help the 
types of businesses that you are talking about. In many cases 
they need grants and not loans. But as part of additional SBA 
appropriations, we very much support long-term loans, 
particularly for the types of businesses that you are focused 
on.
    Mr. Gonzalez of Texas. What specific loans do you have 
available for folks like these small hoteliers?
    Secretary Mnuchin. Again, we support additional money to 
small hotels because that is what they need. Additional SBA 
loans are something that we have looked at as well as PPP 
loans. In many of the cases, these small hotels do not fit into 
Main Street because they already have additional--they already 
have other indebtedness, and in many cases they are either not 
allowed to take additional loans or they are too levered to 
begin with, to qualify.
    Mr. Gonzalez of Texas. So, the small ones that do fit in, 
you are saying that the SBA has a program for them?
    Secretary Mnuchin. No, what I said is as part of additional 
legislation, the Small Business Committee has proposed 
additional money, long-term money for small businesses as part 
of a new program, and that is something that we have looked at 
and we would support.
    Again, many of the small hotels that you are talking about 
don't have any revenues.
    Mr. Gonzalez of Texas. Right.
    Secretary Mnuchin. So, those hotels would qualify for 
additional PPP loans. There is over $130 billion that has been 
appropriated by Congress that we just need authorization to 
use, and that would be the best solution for them.
    Mr. Gonzalez of Texas. Thank you. I would just ask that we 
stay cognizant of these folks. They are good Americans. They 
are hardworking Americans. They are an important part of our 
economies, both locally and nationally, and they deserve our 
attention. Thank you very much.
    Chairwoman Waters. Thank you very much.
    I now recognize the gentleman from Tennessee, Mr. Kustoff, 
for 5 minutes.
    Mr. Kustoff. Thank you, Madam Chairwoman.
    And I would like to thank the witnesses for your leadership 
during this crisis. I think you have both displayed tremendous 
leadership.
    Secretary Mnuchin, if I could, we have talked a lot about 
the PPP program today and its success, and the ranking member 
talked about the 51 million jobs that it is estimated that it 
saved, with the caveat that maybe 12 million rural jobs in 
rural communities that it saved.
    If I could, following up on what Mr. Loudermilk asked about 
a few moments ago as it relates to the forgiveness, what I have 
heard from small businesses throughout my district, and 
frankly, throughout the State of Tennessee, is that they are 
very thankful about the PPP; it literally saved their 
businesses. But there is a concern about the complexity of the 
forgiveness.
    And so my question is, have you considered administratively 
forgiving certain loans, say, loans of $150,000 or less, again, 
through administrative action?
    Secretary Mnuchin. We have considered that. We don't think 
we have the authorization to do that in the context of the law. 
And we have tried to make it very simple for small businesses. 
But again, there were some proposals out of Congress that just 
said we should automatically forgive all of those loans, and to 
do that, we would need congressional action.
    Mr. Kustoff. So your interpretation is that you don't have 
the authority to administratively forgive those certain loans, 
again, the smaller loans? I am using $150,000 or less. 
Administratively, you don't have the authority to do that?
    Secretary Mnuchin. We think we have the obligation to get 
the documents, have them fill out what is an easy form, and 
have the ability to audit those. I think, as you know, 
unfortunately, there has been some fraud, and we're working 
with our IG on that.
    But, no, we don't think it would be appropriate, and we 
don't think we have the authorization to do a blanket 
forgiveness across-the-board.
    Mr. Kustoff. If I can, again, we have heard from people, I 
think all of us have, about how PPP saved their businesses, 
kept their employees on the payroll. And, frankly, you all 
deserve credit for crafting that. And I do think, frankly, that 
Congress deserves credit for acting swiftly and in a bipartisan 
manner.
    The one criticism I have heard from businesses, 
specifically in my district, is that they literally could not 
compete--some--with the enhanced unemployment benefit, that it 
was set too high. And so maybe in an area like Tennessee or 
Mississippi or Arkansas, maybe it was generous in other States. 
Maybe it was not. I don't want to get ahead of the 
negotiations, but if there is an additional enhanced 
unemployment benefit in the next package, is there a way to 
somehow tie that to locality?
    Secretary Mnuchin. Yes. At the time, we knew that there 
were certain places where it would be too high, and certain 
plaes where it would be too low. We thought the fair way of 
doing it was one number across-the-board.
    As part of the President's executive action, he has now 
authorized that to go forward with up to $400, $300 if the 
State doesn't contribute, and we have proposed as part of 
additional legislation having it at something like 75 percent 
of wage replacement.
    Mr. Kustoff. And would that be uniform across all 50 States 
or would it be based somehow on locality?
    Secretary Mnuchin. Ideally, it would be each State would 
take some time for them to implement that technology, but that 
it would be capped on 75 percent of previous wages.
    Mr. Kustoff. Thank you, Mr. Secretary.
    One more question for you, if I can, and I am going to 
touch on something that I don't think has been asked today, and 
that is on phase one of our agreement with China that was 
executed earlier in the year. Obviously, we know we faced a 
pandemic. Are you right now confident that China can meet its 
commitment to purchase $36.5 billion in agricultural products 
this year?
    Secretary Mnuchin. I believe they are on track for that, 
and Ambassador Lighthizer and I are monitoring that very 
carefully.
    Mr. Kustoff. Thank you, Mr. Secretary.
    With that, I yield back my remaining time.
    Chairwoman Waters. Thank you.
    I now yield 5 minutes to the gentleman from Florida, Mr. 
Lawson.
    Mr. Lawson. Thank you, Madam Chairwoman. I would like to 
thank you and Ranking Member McHenry for hosting this hearing 
today.
    And I would like to welcome the gentlemen to the meeting. 
It has been very good hearing you all speak this morning.
    One of my colleagues, Representative Taylor from Texas, 
joined me in writing a letter to both of you regarding the 
impact of COVID-19 on the commercial real estate market, and I 
heard some of it talked about earlier.
    The commercial real estate market continues to be hit hard 
due to the economic shutdown that has resulted in store 
closings and halted travel. The COVID-19 pandemic has turned 
the $4 trillion commercial real estate financial market upside 
down.
    In June, I was joined by Representative Taylor and over 100 
of our colleagues in requesting that the Department of the 
Treasury and the Federal Reserve urgently consider targeting 
economic support to bridge the temporary liquidity deficiencies 
facing commercial real estate borrowers created by the 
unforeseen crisis. We believe that this--and still do that the 
Federal Reserve has the ability to bridge the gap through 
various Facilities to help many businesses survive the economic 
disruption.
    However, on Friday the Federal Reserve released an update 
on the Main Street Lending Program, which stated that 
conditions do not warrant changing this to allow the lender to 
assist the basic buyer.
    Would you all care to comment on that for me?
    Secretary Mnuchin. First, let me say, again, Chair Powell 
and I both agree with you that the commercial real estate 
market has an issue.
    I just want to clarify, when people talk about asset-based 
lending, they traditionally don't include real estate in that. 
The real estate market is its own market, so that wouldn't 
necessarily be part of an asset-based program.
    There are structural problems. I know some people in the 
House tried to work on a proposal of preferred equity so that 
it could be going below the existing.
    But Chair Powell and I will continue to work on this. It is 
an issue. We don't have a solution. We wish we did.
    Mr. Lawson. Okay. Does Chairman Powell want to comment, 
too? Because I was on a call with him several weeks ago about 
this issue, along with Representative Taylor.
    Mr. Powell. Yes. And both of us are very familiar with the 
letter that you sent and have studied it carefully and really 
looked hard at how we can reach the problem we are talking 
about.
    And a lot of the problem just isn't with commercial 
mortgage-backed securities. Those loans contain a provision 
that says you can't incur additional debt. The Secretary 
referred to a way to get around that, but that wouldn't involve 
the Fed. It would require legislation.
    And we do understand and appreciate that this is a 
significant problem in the economy, and we can keep looking for 
solutions. We don't really have a solution, though, with the 
tools we have.
    Mr. Lawson. And I understand that we don't have a solution.
    I think one of the things that really bothers me as a 
lawmaker, is when we turned back about $130 billion in PPP 
funds, and then you find out that all of these people who are 
suffering tremendously, and they have coming up to maybe 
releasing something like a large group of employees who depend 
on them.
    I had the opportunity to talk to Chairwoman Waters about 
some of the things that were happening even in her area out in 
California. And I am glad that you all are considering it and 
that we need legislation. I don't know how quickly we can get 
legislation through. I was certainly hoping that it could be 
included in negotiations on the HEROES Act and what is coming 
out of the Senate, but I know the Senate, which was stated 
today, still hasn't passed anything.
    So I don't have much time left, but I am glad that you all 
were continuing to keep that at the forefront, because a lot of 
these employees are just everyday people who need help.
    And with that, Madam Chairwoman, I yield back.
    Chairwoman Waters. Thank you.
    I now recognize the gentleman from Indiana, Mr. 
Hollingsworth, for 5 minutes.
    Mr. Hollingsworth. Good afternoon.
    First to you, Chair Powell. I was recently excited by the 
news about creating a more symmetrical inflation target. I 
think that was great news. I know it is something that you and 
I had discussed at length privately, as well as publicly at 
these hearings. I am sure it had a lot of discussion and a lot 
of research underpinnings, and it wasn't just my annoyance that 
led to it. But, nonetheless, I really appreciate you doing that 
and I think it is going to be positive for the Fed and for the 
American economy going forward.
    Specifically, I also wanted to turn to the temporary 
exclusion of Treasuries and deposits at Federal Reserve Banks 
from the SLR that was done through March of 2021, on some 
concerns that increased reserves during this period of time 
didn't want to count against them during SLR, but it was not 
extended to, nor does it flow through to the G-SIB size 
indicator. I was wondering why that was the case, and is there 
any further discussion or dialogue about extending that through 
the G-SIB size indicator?
    Mr. Powell. I have to go check on that for you. I am not 
aware of any of those discussions.
    Mr. Hollingsworth. Okay. Great. If you wouldn't mind 
checking on this, because I think that is really important to 
us to make sure that we see that flow through, given that in 
the fourth quarter, I think many of our largest institutions 
are going to begin to see those impacts.
    On to you, Secretary Mnuchin, what you said a few minutes 
ago. There has been a proposal around Congress potentially 
talking about preferred equity to some of our real estate 
borrowers that are most troubled. That, to me, is troubling, 
that proposal, and I think you said it doesn't feel like there 
is a good solution. Could you talk about why that isn't a good 
solution?
    Secretary Mnuchin. Ideally, we would rather lend as debt 
and not do preferred equity.
    Mr. Hollingsworth. Evaluation issues, government ownership 
position issues, how do you get paid back issues, those sorts 
of things?
    Secretary Mnuchin. All of the above. Exactly.
    Mr. Hollingsworth. Exactly.
    And one of the things that I want to emphasize is that 
there is real distress in this community, there are real 
challenges in this community, but the longer that we continue 
to talk about solutions that aren't real solutions, I think the 
longer it will take to get to a legislative and administrative 
fix that will provide a real solution to those who are hurting 
across my district, across my State, and across this country. 
So, I appreciate your clarity on that.
    With that, I will yield back.
    Chairwoman Waters. Thank you.
    I now recognize the gentlelady from Michigan, Ms. Tlaib, 
for 5 minutes.
    Ms. Tlaib. Thank you so much, Madam Chairwoman.
    And thank you both so much for being here.
    One of the questions or some of the basic ones I just want 
to review with both of you, Chairman Powell and Secretary 
Mnuchin, what do you think your primary role is during this 
pandemic?
    And I will start with you, Chairman Powell.
    Mr. Powell. We are here to serve the American people.
    Ms. Tlaib. It is to stabilize the economy?
    Mr. Powell. That is a big part of it right now, yes.
    Ms. Tlaib. How about you, Mr. Secretary?
    Secretary Mnuchin. Yes, that's correct, and to 
operationalize what are obviously all of the responsibilities 
that the Treasury--
    Ms. Tlaib. Like, prevent an economic collapse, right? You 
both agree that is kind of a--
    Secretary Mnuchin. Yes, for starters.
    Ms. Tlaib. Yes. No, I hope so, too.
    I am going to start with you, Chairman Powell. Every time I 
have asked you about State and local governments, you have 
insisted there is nothing that the Fed can do for States and 
cities in distress. But you did create a Municipal Liquidity 
Facility (MLF) to apparently do just that. However, the program 
is pretty restrictive. Is it true that only the State of 
Illinois has applied?
    Mr. Powell. No. We have done two loans. And of course, that 
Facility has resulted in $250 billion of borrowing in the 
private sector, where there was none taking place before the 
Facility was announced.
    Ms. Tlaib. Do you think State and local government going 
bankrupt would create instability in our economy?
    Mr. Powell. I think that is an issue that is outside my 
bailiwick.
    Ms. Tlaib. So you don't think it is an integral part to 
ensure that State and local government in the public sector is 
stabilized and will not go bankrupt like the City of Detroit 
did?
    Mr. Powell. States can't go bankrupt. They don't have a--
there is no means for them to. Cities, of course, can, under 
Chapter 9.
    Ms. Tlaib. Yes. The City of Detroit, when they went 
bankrupt, there was a huge--did you think there was an impact 
in the economy there?
    Mr. Powell. Yes.
    Ms. Tlaib. I think so, too.
    My district really hasn't benefited from the program, and 
one of the things that I want to point out to you, Chairman 
Powell, is you don't have to lend with penalty rates to State 
and local government. This regulation that you have there about 
penalty rates, that wasn't created by statute, correct? That 
was created by you all internally?
    Mr. Powell. It is in our regulation and in our practice.
    Ms. Tlaib. But why not remove the penalty rate when there 
is heightened unemployment or when the State and local 
governments are at risk?
    Mr. Powell. What that Facility has accomplished is it has 
opened up the private market. So, State and local governments 
are borrowing in record amounts at record low yields, and that 
is across the yield curve and it is in various--
    Ms. Tlaib. Only two States applied, correct?
    Mr. Powell. Excuse me?
    Ms. Tlaib. Only two States have been able to qualify under 
the MLF program?
    Mr. Powell. Yes, but they are all borrowing in the public 
markets--
    Ms. Tlaib. How many cities?
    Mr. Powell. They are borrowing in the public markets at 
much cheaper rates, which is at very cheap rates.
    Ms. Tlaib. Okay. But, Chairman Powell, what I understand is 
for corporations, the Fed supports bonds within a 5-year 
maturity. Do you think corporations in debt are more important 
than local municipalities? Because I understand theirs is 5 
years, and you have it for what, 3 years for local government?
    Mr. Powell. Yes. State and local governments generally are 
not allowed to borrow to finance deficits. And so there is--
what it is, is their borrowing is for liquidity. And there is a 
part of the market which is zero to 3 years that is about 
liquidity, and that is where we have been willing to lend.
    But there has been a lot going on, longer-term issues. 
Twenty-year bonds and 30-year bonds have been issued. And that 
is because of our backstop. Our Facility is performing its 
backstop function, and that has enabled the private market to 
work very well to serve State and local governments.
    Ms. Tlaib. Yes. I don't think--honestly, just looking at 
what happened in the City of Detroit, I am really worried that 
we are not being flexible enough, that we are not able to 
accommodate for the fact that these State and local 
governments--you know that for much of the policies from 
within, to stabilize the economy, we have to uplift and make 
sure that the communities are protected. So, I would recommend 
that you check out the bill that I have, the Uplifting Our 
Local Communities Act. I really would appreciate that.
    Secretary Mnuchin, we have to prevent an economic collapse, 
right? This is a huge issue. This is probably even deeper than 
the recession that we went through.
    Yes or no, do you believe another stimulus check could help 
stabilize the economy?
    Secretary Mnuchin. I do.
    Ms. Tlaib. However, you have been on record for not 
supporting the economic package that we passed in May, that 
included another round of stimulus checks for millions of 
Americans who are right now unable to afford their rent and so 
forth.
    Can you explain what your position there is? Because I 
think the American people are a little confused. Does the 
Administration support another $1,200 stimulus payment?
    Secretary Mnuchin. The Administration does support another 
stimulus payment.
    Ms. Tlaib. But you are willing to go ahead and support 
within the Heroes Act that payment and push back on what I call 
the, ``let them go bankrupt bill,'' that the Senate has 
proposed?
    Secretary Mnuchin. Let me just say I take great pride that 
the last two bills we did passed with overwhelming bipartisan 
support. We obviously can't pass a bill in the Senate without 
bipartisan support. And our job is to continue to work with 
Congress to try to get additional help to the American public.
    Ms. Tlaib. I think you need to be very clear with the 
Senators, Secretary, really clear that direct payments to 
individuals is critical to preventing an economic collapse in 
our country.
    Chairwoman Waters. Thank you very much.
    We are going to move to the last Member who will be able to 
raise questions. Both of our guests have a hard stop at 12:30, 
and we are going to honor that.
    I now recognize the gentleman from North Carolina, Mr. 
Budd, for 5 minutes.
    Mr. Budd. Thank you, Madam Chairwoman.
    And Secretary Mnuchin, thanks for being here.
    To date, less than 1 percent of the PPP loans nationwide 
have been processed through the SBA's forgiveness portal. Many 
small businesses, these PPP borrowers, are waiting to see if 
Treasury or Congress is going to act on some sort of bipartisan 
forgiveness proposals that we see in the House and the Senate.
    Now, the current one, as I understand it, the current 
process is really confusing for a lot of these small business 
owners, and it is not what they expected when they first took 
out these loans.
    The current process is also a real burden on community 
banks that have a lot less resources than our large banks.
    The time for such a streamlined process to be put in place 
was a long time ago. It was weeks ago. But due to this delay, 
the situation with banks and borrowers is getting more and more 
urgent.
    So under your current authority, would you and SBA 
Administrator Carranza be able to implement a streamlined 
process as outlined in the Paycheck Protection Small Business 
Forgiveness Act?
    Secretary Mnuchin. I'm sorry. I would have to look at the 
specifics of the Act and get back to you. But I believe the 
answer is that we don't have the authority to implement it the 
way it is in the Act.
    But, again, I would just say the forgiveness portal is 
open. We are encouraging small businesses to apply. And we are 
working with SBA to make sure that they can process those as 
quickly as possible and we could provide small businesses tools 
to make it easy for them.
    Mr. Budd. Mr. Secretary, I am glad that the portal is open, 
and I am assuming that it is working. Do you consider it 
currently to be a streamlined process? And is there anything, 
any improvement you could do within your authority?
    Secretary Mnuchin. We developed an easy form, so we tried 
to make it significantly easier. And, again, we are happy to 
work on a bipartisan basis with Congress if they want to pass 
legislation that creates blanket authority for forgiveness.
    Mr. Budd. Thank you, Mr. Secretary.
    Chairman Powell, thanks again for being here. At your last 
appearance before the committee you stated that our banking 
system is robust and it has been a source of strength 
throughout this pandemic. Specifically, you cited the 
unprecedented influx of deposits, forbearance measures taken by 
banks, and the continued ability to lend as evidence of the 
strengths of the U.S. banks in the COVID-19 environment.
    Now, while many industries have understandably needed 
government support to continue operating during the forced 
economic shutdown, my view is that the financial system has 
been a crucial partner for the Fed and Congress in facilitating 
relief to businesses and to households.
    I bring all this up because I have heard some call the 
recent actions taken by Congress and the Fed--they have 
actually called it, ``a bailout for banks.'' So my question to 
you is simple: Has there been a bailout for banks during COVID-
19?
    Mr. Powell. No, I wouldn't say that there has been.
    Mr. Budd. My office keeps hearing from companies that are 
unable to secure short-term financing, but they are using their 
working capital financing to run their operations. They were 
too large to take advantage of the PPP, and they don't have 
access to the capital markets.
    So, how could the Fed use its Section 13(3) authority to 
provide assistance to these companies, many of whom provide 
services and supplies all up and down the supply chain that are 
critical to our nation's economy? What can the Fed do to 
provide assistance to them?
    Mr. Powell. On working capital, in looking at the idea of 
an asset-based Facility, we did a good deal of work in that 
sector, and we came away thinking that working capital 
financing was pretty broadly available. So I am surprised, and 
it is not a good thing that I am hearing that it is difficult 
for some. So, we will go back and look at that.
    Mr. Budd. Chairman Powell, is there something that I should 
relay to these mid-sized businesses, that maybe they haven't 
found or they are not aware of that they should look to for 
support?
    Mr. Powell. We have the Main Street Facility, of course, 
which has three different portals--or three different loan 
products--and all companies are welcome to borrow there. We 
have, as I mentioned, growing interest there. There is the PPP 
program--
    Mr. Budd. Mr. Chairman, do you think there might be a gap--
    Mr. Powell. --the Paycheck Protection Program.
    Mr. Budd. I'm sorry. Do you think there might be a gap 
between the PPP and the Main Street Lending Facility, where 
some could get caught sort of in the lurch?
    Mr. Powell. We have been looking for gaps, honestly, and we 
did look at the working capital, at working capital and 
finance, and did not see a big problem to solve there. But we 
will go back and take another look at that.
    Mr. Budd. Thank you, Chairman Powell.
    I yield back.
    Chairwoman Waters. Thank you very much.
    I would like to thank our distinguished witnesses for their 
testimony today.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    This hearing is now adjourned.
    [Whereupon, at 12:23 p.m., the hearing was adjourned.]

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