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Mnuchin sees ‘strong likelihood’ of needing another COVID-19 relief bill

Washington, May 22 (IANS) US Treasury Secretary Steven Mnuchin said that the administration will carefully review the economic situation in the next few weeks, and that there is a “strong likelihood” the country will need another COVID-19 relief bill.

Noting that $3 trillion have just been pumped into the economy, Mnuchin said at an online event hosted by The Hill news outlet on Thursday that “we’re going to step back for a few weeks and think very clearly how we need to spend more money and if we need to do that”, reports Xinhua news agency reported.

The Secretary said he had spoken to House Speaker Nancy Pelosi last week about the execution of the $2.2-trillion relief bill Congress passed in late March, adding that the conversation was not focused on the next steps.

The House of Representatives recently passed a new $3 trillion coronavirus relief package, which was proposed by Democrats but not likely to gain approval from the Republican-held Senate.

Calling it a partisan bill, Mnuchin said he hopes that the next relief bill has overwhelming bipartisan support.

As lawmakers and the White House wrestle with when and how to respond, the economic fallout of the COVID-19 pandemic continues to grow.

Another 2.4 million people filed for unemployment benefits last week, according to data released by the Labor Department earlier in the day.

With the latest numbers, more than 38.9 million Americans have applied for unemployment benefits since widespread “stay-at-home” orders and business closures in mid-March.

“The second quarter is obviously going to be a dreadful quarter because literally it’s like we took the water faucet and we turned it off so nothing came through,” Mnuchin said.

Noting that the country is “slowly reopening the economy”, the Secretary said he thinks the economy will “bottom out” in the second quarter, and the situation will improve in the second half of the year.

By Wednesday, all US states had started to reopen their economies in some phase, despite that many did not see a significant downward trend in COVID-19 infections and deaths.

Many governors, with the support of the US administration, have been scrambling to rescue the devastated economy, but public health experts and economists have expressed their grave concern that a hasty reopening could trigger a second wave of infections.

Philadelphia Federal Reserve Bank President Patrick Harker recently warned that reopening the economy too quickly would not only bring a “health catastrophe” but also “reverse the economic recovery”.

At a virtual hearing held by the Senate Banking Committee on Tuesday, Mnuchin said the US should find ways to reopen the economy and bring people back to work as the country is continuing to see large unemployment and other negative indicators in the second quarter of this year.

He warned that there is “risk of permanent damage” if the US economy does not reopen soon.

–IANS

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