Washington, D.C. – During today’s Senate Banking, Housing, and Urban Affairs Committee hearing, U.S. Senator Catherine Cortez Masto (D-Nev.) questioned Treasury Secretary Steven T. Mnuchin and Federal Reserve (Fed) Chairman Jerome Powell about the urgent need for relief for Nevada’s state and local governments and the hospitality and leisure industry. She asked both officials what steps the administration is taking to help address the financial devastation caused by the pandemic.
Senator Cortez Masto prefaced her questions with statistics about the economic impacts of the pandemic on Nevada’s hospitality sector: “Nevada’s unemployment rate is now more than 12%. We know more than 175,000 people continue to claim unemployment insurance. Just the statistics from the American Hotel and Lodging Association [say that] nearly 70% of hotels may close by the end of this year if they do not receive additional government funding. I will tell you in Las Vegas and Reno, employment in our hospitality and leisure sector is down nearly 25% and 14% respectively.” She then asked Secretary Mnuchin, “What is the administration — and what are you — ?advocating moving forward that we should do to address the impact we are seeing on the leisure and hospitality industry?”
In his response, Secretary Mnuchin agreed that, “this industry has been devastated” and that he believes the Paycheck Protection Program (PPE) could “immediately help people.”
Senator Cortez Masto also asked Secretary Mnuchin to clarify whether hospitality and leisure businesses need assistance in the form of loans or grants.
Secretary Mnuchin responded, “PPP, if used correctly, is a grant. It is a loan that should get forgiven without the bureaucracy. Yes, the PPP is effectively a grant. That is what they need, not more loans.”
In her response, Senator Cortez Masto agreed, but highlighted that “there are challenges with [the PPP program].”?She also added that some businesses have not applied for the PPP program because of confusion about whether and how to repay.
Senator Cortez Masto went on to ask Chairman Powell if the hospitality and leisure industry needs another comprehensive stimulus package to sustain it.
Chairman Powell replied, “I would agree the industry has been devastated, and the two things it needs is for the pandemic to be over, which we really can’t do, and it needs grants, which we also can’t do … For most people and businesses in that industry, really what they need is more fiscal support.”
Senator Cortez Masto also spoke about the importance of additional federal funding for state and local governments dealing with the impacts of COVID-19, saying, “Let me just reassure you that the state and local governments need additional relief. My state does, the state of Nevada, for the very reasons we’ve been talking about. We have a budget hole of over a billion dollars. But that is just not Nevada, that is all of the states. There is bipartisan support that I have seen, as recently as September of this year from the National Governors Association, bipartisan support for additional relief for state and local governments. For the very reasons that we are talking about. So this idea that there are red states and blue states, or that states don’t need it and are just going to misuse is, is really [misleading]. It is getting in the way of the needs that we have across this country in a bipartisan way. Let me just reassure you … Republican and Democratic governors are both asking for additional relief for state and local governments.”
Senator Cortez Masto also challenged Secretary Mnuchin on his claim that?he has the power to transfer $454 billion of unused Coronavirus Aid, Relief, and Economic Security Act (CARES) Act funding back to the Federal Reserve’s Exchange Stabilization Fund at the end of the year, stating that she doesn’t believe he has such authority.
Video of the full exchange is available?here.