Mnuchin Says US Can’t Shut Economy Even if Virus Resurges

Steven Mnuchin speaks in Washington on June 10.
Steven Mnuchin speaks in Washington on June 10. (Al Drago/Bloomberg News)

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Treasury Secretary Steven Mnuchin said the U.S. shouldn’t shut down the economy again even if there is another surge in coronavirus cases.

“We’ve learned that if you shut down the economy, you’re gonna create more damage — medical problems that get put on hold,” Mnuchin said June 11 on CNBC. “We can’t shut down the economy again.”

Mnuchin added that he believes President Donald Trump made the right decision to urge states to ease social distancing rules that have crippled the U.S. economy. He said that in the event of a resurgence, it will not be necessary to impose restrictions again because COVID-19 testing and contact tracing are improving, and officials understand more about how to contain outbreaks.

U.S. stocks tumbled the most in almost six weeks June 11 as evidence mounted that a second wave of coronavirus cases was coming. More than 2 million people in the U.S. have been infected so far. At 4 p.m., the Dow Jones Industrial Average had fallen more than 1,800 points on the day.

Mnuchin echoed an argument advanced by Trump and Health Secretary Alex Azar: The health costs of the shutdown may exceed the toll of the virus or already have. The White House has offered no data to support that assertion and has declined requests to do so.

While the U.S has seen a decline in some services, such as cancer screenings and childhood vaccinations, during the lockdown, health experts have warned that it’s a false choice to weigh those directly against the pandemic. The U.S. continues to see around 20,000 new cases and 1,000 deaths per day from the virus, with rising case totals in states including Georgia, Arizona and Texas.

Meanwhile, the economic shutdown has put more than 40 million people out of work. While some of those jobs are starting to return faster than expected, the unemployment rate was 13.3% last month.

Mnuchin credits a bipartisan effort to inject about $6 trillion into the economy through fiscal and monetary stimulus for the beginnings of an economic recovery. But he says more spending will be needed.

“One of the things we’re going to need to be focused on is how do we help the industries that are especially impacted: hotel, travel, entertainment, restaurants,” he said. Also under discussion is federal aid for state and local governments, and support for small businesses impacted by recent looting linked to protests against police brutality and racism.

“The president and I won’t be done until we get every single person back to work,” Mnuchin said, adding that there is still money from the previous packages that remains unused. “Over the next month, you’ll see another $1 trillion go into the economy.”

Key parts of the first three rounds of fiscal stimulus are set to expire in coming weeks. Unemployment benefits that were broadened under the pandemic will expire July 15, the same day that deferred tax payments are due.

The White House and GOP lawmakers, however, have indicated they won’t hold negotiations for the next stimulus bill until after the July recess.

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