Mnuchin: U.S. economic recovery 'is underway'

Yahoo Finance’s Jessica Smith joins Zack Guzman to break down the latest outlook for the paycheck protection program as Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza testify on Capitol Hill.

Video Transcript

ZACK GUZMAN: Welcome back to live market coverage here on Yahoo Finance. Today, we heard from Treasury Secretary Steven Mnuchin and the head of the Small Business Administration testifying today on what's been done to help support small businesses and what they think that program has been able to do to keep the bottom from falling out here in the economy.

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And for more on that and how the program could still succeed even better, I want to get to Yahoo Finance's Jessica Smith, who was monitoring that and what they had to say on the matter. Jessica, what do we have to hear?

JESSICA SMITH: Well, lawmakers on both sides of the aisle acknowledged some of the problems that there were in the initial rollout of this program. But they really did praise it, saying that it has been a success to keep millions of people getting their paychecks and keeping all of these small businesses afloat.

And I want to go over some of the specific highlights that we heard from Mnuchin because there was a lot to go through in this hearing. First, he did confirm that borrowers who spend less than 60% on payroll will still be eligible for partial loan forgiveness. That was a big concern from lawmakers who thought it may be an all-or-nothing cliff. So you can still spend less than 60% and still be eligible for partial forgiveness.

Next, he did expect-- he said to expect new guidance on relaxing restrictions for borrowers who have criminal backgrounds. He said, today, he could put forth new guidelines to make that a little easier for people who maybe do have a criminal record to access these loans. Lawmakers say they might want him to go even further.

He also signaled that we might not learn who is actually receiving these PPP loans and how much they're receiving. He says that in many cases, he feels like that is proprietary information and confidential. We'll see if lawmakers continue to push him on that.

He also spoke about the overall economy. And he said he definitely thinks that there is going to be need for more legislation, though he does see a dramatic improvement in the US economy in the third and fourth quarters. He says that he thinks the economy is recovering already. But still, more will need to be done. Here's what he had to say.

STEVEN MNUCHIN: The reason not to jump into CARES 4 is hopefully, we won't need a CARES 5 and a CARES 6. I do think the economy is going to rebound significantly. But I'd also say there is still significant damage in parts of the economy. And we're going to consider using all of our fiscal tools, working with Congress, to make sure that we restore this economy back to where it was and where it should be.

JESSICA SMITH: Now, three Democratic senators also say that they're introducing a bill to allow some small businesses to access another PPP loan. So that's something that we're really going to be watching going forward, to see if that gains any movement. Zack?

ZACK GUZMAN: All right, Jessica Smith bringing us the latest from Washington, DC.

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