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Senate panel hears contrasting views on reopening

By SCOTT REEVES in New York | China Daily Global | Updated: 2020-05-20 12:43

FILE PHOTO of US Treasury Secretary Steven Mnuchin. [Photo/Agencies]

The top Democrat on the Senate Banking Committee charged Tuesday that some workers are being pushed "back into the workplace" without adequate protection against the coronavirus, an allegation rejected by Treasury Secretary Steven Mnuchin.

"How many workers should give their lives to increase the GDP or the Dow Jones by 1,000 points?" asked Sherrod Brown, an Ohio Democrat,during a teleconference.

Mnuchin replied, "No workers should give their lives to do that, Mr. Senator, and I think your characterization is unfair."

He said President Donald Trump's administration had "provided enormous amounts of equipment" to protect workers' health.

Brown posed the question after Mnuchin said it was important to bring "people back to work" in a safe way and restart the economy.

Since the coronavirus pandemic struck in March, about 32.5 million people have filed unemployment claims and driven the unemployment rate to 14.7 percent, the US Labor Department reported.

"It's important to realize that the large number represents real people," Mnuchin said in his opening statement to the committee.

The exchange between Brown and Mnuchin underscores the gap between Democrats and Republicans over how and when to restart the economy without causing a second wave of coronavirus cases.

Many Republicans believe a strong economy is the best way to support workers, especially those who run a small business. Republicans say many who recently lost their jobs will be called back to work when the economy rebounds.

But many Democrats argue that unemployed workers need government support immediately, and it's too risky to return to work now. The House has passed a second stimulus package that includes another round of $1,200 payments to workers.

As recently as February, the economy was strong, and a record number of Americans were employed. US President Donald Trump planned to run on his economic record.

Trump has expressed support for those protesting extended coronavirus-related restrictions and argued that the limits are an attempt to undercut the economy in the runup to his fall re-election campaign.

At the hearing, Mnuchin said the Treasury Department and the Federal Reserve are "fully prepared to take losses in certain scenarios" on money remaining to be distributed through the Coronavirus Aid, Relief and Economic Security Act(CARES).

To date, Mnuchin said the government has agreed to provide $195 billion in credit support, leaving $259 billion to create new programs or expand existing efforts as needed.

The total of $454 billion is equal to the amount appropriated by Congress, minus the $46 billion set aside for airlines. Air travel has collapsed during the outbreak.

American Airlines and United Airlines have reported a total of about $4 billion in losses so far this year. But on Tuesday, Southwest Airlines said bookings exceeded cancellations for the first time since the lockdown began.

At the same hearing, Federal Reserve Chairman Jerome Powell urged Congress and the White House to keep relief money flowing to be sure the response to the economic slowdown isn't wasted.

"This is really a question for Congress to weigh," Powell said Tuesday during a hearing conducted via the Internet.

In a report released Tuesday, the Congressional Budget Office (CBO) said it expects the gross domestic product, the value of all goods and services produced in a year, to decline 38 percent on an annualized basis in the second quarter.

That's similar to estimates by Wall Street analysts and slightly better than the 42 percent drop estimated by the Federal Reserve Bank of Atlanta.

"The economy is expected to begin recovering during the second half of 2020 as concerns about the pandemic diminish and as state and local governments ease restrictions," the CBO said in a statement.

The CBO expects job growth to improve "materially" in the third quarter as social distancing policies are gradually relaxed.

But the budget office warned, "The decline in economic activity has been so rapid and so recent that the depth of the downturn is still uncertain."

Reopening the economy has already sparked at least one lawsuit.

In Chicago, five McDonald's restaurant workers and four of their family members sued the fast-food company Tuesday and alleged that its response to the coronavirus pandemic was inadequate.

The plaintiffs seek to file a class action as McDonald's prepares to reopen throughout the nation. The company has sent franchisees a 59-page guide for safe operation during the coronavirus pandemic.

Some states are reopening their economies while others remain locked down. New York is reopening less populous upstate regions, but New York City remains largely locked down.

The auto industry has taken initial steps to resume production. Ford, General Motors and Fiat Chrysler worked closely with the United Auto Workers union to put safety measures in place.

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