Sec Mnuchin: We need legislation to help Americans back to work
CNBC Transcript: Treasury Secretary Steven Mnuchin speaks with CNBC’s “Squawk on the Street” today. Sec Mnuchin discusses the plans to restart coronavirus stimulus talks.
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WHEN: Today, Monday, August 10
WHERE: CNBC’s “Squawk on the Street”
Following is the unofficial transcript of a CNBC interview with United States Treasury Secretary Steven Mnuchin on CNBC’s “Squawk on the Street” (M-F, 9AM-11AM ET) today, Monday, August 10. Following are links to video on CNBC.com:
Treasury Secretary Steven Mnuchin: A compromise is possible
Treasury Secretary Mnuchin: We need legislation that helps Americans get back to work
We’re prepared to put more money on the table: Treasury Sec Steven Mnuchin
Jim Cramer: Mr. Secretary, always good to see you on “Squawk on the street.” we get a little bargaining done right on the show. How have you been?
Sec Mnuchin: good morning. How are you?
Cramer: I’m doing fine, thanks. I know you’re not happy about things off the rails because 31 million people in both blue and red states are unemployed. How do we get things restarted and how do we get it that speaker Pelosi doesn’t think that your side gives a damn because I know you do and I know you want to help the most vulnerable people.
Sec Mnuchin: Well, Jim, I think there is a compromise if the democrats are willing to be reasonable there is still a lot of things that we need to do and that we’ve agreed on. Let me just go through a few of them first of all, schools. The president wants to make sure that there is enough money to open schools safely. That’s something that is very important. I think you’ve heard me say the democrats and the heroes bill had 100 billion. We put in 105 billion. I have spoken to many governors over the weekend to understand their direct costs I’ll be getting on a video call this afternoon with all of them and the vice president to talk about schools.
We’ve agreed on more money for ppp for businesses that are particularly hard hit getting a second, a second check we’ve agreed on more direct payments like we sent out last time the democrats wanted money for food, so we compromised on that. We want money for vaccines, hospitals, rental assistance and we’ve given them flexibility and we offered more money for state and local but we’re not going to give $1 trillion to state and local. That’s just not a reasonable approach
Cramer: Right I completely understand that but I guess where I feel that there’s some unrealism is how do we get something for small business right now I know that you are actually the voice for small business in this country. Those are the ones directly in the crosshairs of covid-19 it is certainly not their fault. You spoke from the very beginning about business interruptions insurance. Why can’t we make it retroactive for small business so we can get these places in shape because half the revenue coming in and the costs are the same
Sec mnuchin: Jim, I’m highly confident if we put another ppp bill up for a vote that had second payments for businesses that were down 50% that make sure we had money going for distressed and minority areas I’m highly confident we’d have an overwhelming number of people on both sides of the aisle pass that normally in negotiation what you do is say let’s agree on the things we can agree on and let’s pass legislation so that the american people get the benefit of that whether it’s small business or schools or other things let’s not hold up everything over a few things that we disagree on.
Cramer: Actually, this sounds much more positive than the way I felt this weekend. Let me ask you I know there is a belief that the $600 a week discourages employment but I have to question that isn’t bogus given the fact that you have had incredible job growth in may, june and july just when the checks are going out. Some sort of worry about the constitution and fiscal responsibility because I know these people are not unemployed because of their own fault
Sec Mnuchin: Well, Jim, no question about that and the president wants to get every single person back to work who lost their job as you said, we got a lot of people back to work. The previous plan has worked we need to do more and we want to do more but let me just put this in perspective.
During the financial crisis, we had a $25 top up in the obama administration for federal unemployment we put on the table a $400 top up we thought that was a fair compromise we also put on the table, by the way, 70% wage replacement up to the $600 for people who make more money and we think those are very fair because there wasn’t legislation. The president went forward with executive authority. He wants to make sure those people who are unemployed no fault to their own get paid.
David Faber: Secretary Mnuchin, david faber, specific to that new unemployment benefit or the one replacing the 600. 25% of it is supposed to come from the states and I know some question to whether the states have the wherewithall to provide that $100 from the state and $300 from the fed that 100 coming from the states, what do you say to those who question whether they have the fiscal wherewithall to pull that off?
Sec Mnuchin: the 25% isn’t coming from the states because we’re authorizing them to use money out of the $150 billion we just sent them so in essence all 100% is coming from the federal government. I have from every single state how much money they have left over they have plenty of money. And the answer is we’ve also said in new legislation we’ll top that up. It won’t cost them a dime.
To the extent they use money out of those facilities now when we pass legislation, we’ll make sure they get that money back. And on top of all of that, if there’s some states that really have problems, the president has the ability to waive the 25% entirely so, what we need to do is we need to get legislation passed that helps the american public get back to work
Faber: All right well, specifically, back to your resistance to the trillion dollars that the congress or the house has passed in terms of aid for the states you know, I’ve heard the objections being about, well, we don’t want states aiding their ailing pension fund systems and things like that aren’t there ways to make sure the money is used specifically to help states that are suffering huge budget deficits that are going to face huge layoffs as a result of reducing expenses aren’t there ways to go about spending that trillion to make sure it meets your objections?
Sec Mnuchin: well, let me just be clear. The trillion dollars is just an absurd number.
Faber: Why is it an absurd number? Why is it absurd number, mr secretary?
Sec Mnuchin: again, I have data from the states let me first say that the states have money left from last time I have already given them flexibility and they can use that money for firefighters, policemen, first responders, health care workers so there is no reason they need to lay off those people I have state by state how much money is left. So, there’s plenty of money now and we put more money on the table.
So, you know, certain states had financial issues coming into this because of bad policies I mean, new york keeps on raising their taxes and everybody is going to move out of new york. I saw your segment earl ier about how with people working from home and remote locations, it’s going to be easier for businesses to move their headquarters out of some of these states let me tell you, florida has no problem and, by the way, I just spoke to the Texas —
Faber: But red states like Kentucky have a problem, too. I mean, it’s not just blue states and I know as a native New Yorker it pains you to think about the fiscal strength of your city and not just the blue states or those who have higher taxes, secretary
Sec mnuchin: let me just say I spoke to the governor of Texas over the weekend just as an example, you know, that’s obviously the largest state and based upon our proposal, I think they have more than enough money to cover the deficit. So, look, I understand new york has problems and, you know, I wish they didn’t have financial problems I think that perhaps the state should put in financial control board over the city because the city is really going in the wrong direction. And it reminds me of the ’70s. I want to see new york city succeed.
Faber: When you and I grew up there California is the largest state and may have a $50 billion budget deficit, I believe.
Sec Mnuchin: I don’t believe that is the number for California. That may be a multi-year number, but I don’t think that’s correct.
Cramer: Mr. Secretary, I wanted to talk about something —
Sec Mnuchin: Yes, you are correct. My mistake Texas is the second. So, I apologize for that thanks for fact checking
Cramer: I do love — makes a mistake and comes out and says it. That’s how we all should be. Something that confuses me, mr. Secretary. You and I are completely in sync about the idea that the small business is really the backbone of the country, as is Mr. Kudlow but when you do a payroll tax deferral what you’re doing is just delaying the inevitable and the people who are most helped are the people who are employed isn’t the problem the 31 million who aren’t employed?
Sec Mnuchin: Jim, you keep on saying 30 million. You’re way too high. We have a lot of people back to work we’re far from the 30 million. But the answer is, we have too many people unemployed so, what we have to do is we have to do a combination of tax cuts and regulatory relief and direct help to, as you said, small businesses they’re 50% of the economy they can hire people back and we need to have stimulus with that. So, the direct checks are a very important part of economic stimulus they go to people who work and people who don’t work and, by the way, people spent that money. You’ve seen that in the retail sales numbers.
And we need to then have a fair unemployment system for the people who can’t get jobs. So, it’s a combination of an overall package. The president’s economic plan worked we had the best economy in the world. This covid terrible disease shut down the economy and now we’ve got to reopen it safely and get people back to work
Cramer: Right I completely agree with that that’s why I’m trying to figure out what is the point of the payroll tax deferral what we need is something that defers small business from having to pay rent they don’t have — let’s go back we’re in a pandemic. You and I both know. It’s a pandemic. That’s a war against an illness. When we get to where we defeat them in the war, then we are fine until then, everybody needs help who is in trouble.
Let’s say it’s 20 million unemployed if I add up the number of people who got jobs in the last three months. Isn’t that the issue and shouldn’t we give help to everybody or is there some level where you genuinely think we can’t go in other words, some level the constitution can’t allow them. Is there a limit to the country’s borrowing power? If there isn’t, we have to get a bridge to where we have beaten COVID-19.
Sec Mnuchin: Obviously, there is some limit to what we can borrow. We’re not at it now. And the president is determined to spend what we need to spend the $3 trillion we spent, plus a trillion dollars more is about 20% of GDP absolutely historic. We’re prepared to put more money on the table there are things, as I said, that made sense to compromise. We’ve compromised. We’re not stuck at the $1 trillion but we’re not going to go to unlimited amounts of money to do things that don’t make sense.
Cramer: But it’s not unlimited. I mean, I think that’s hyhyperbly Mr. Secretary. 3 trillion, 1 trillion you split it you go to 2 trilion or maybe you go to 1.8 trillion certainly if this is a war, we can’t split hairs. It’s unfortunate.
Sec Mnuchin: Jim, we’re splitting things that make sense to split so, let me be clear. You know, if I had started at zero and they had started at $10 trillion, would that have made sense to do a $5 trillion deal of course not. So, you don’t just split the difference what you do is you go line by line and say let’s agree where we can agree and you’re right on things where we agree but we’re apart on money, we split the difference things like food, I listened to the speaker over the weekend she’s right. We started low on food we realized there was a lot of kids out there that there’s an issue.
So, we agreed on more than enough money for this year and through most of next year on food we didn’t make long-term policy changes in the middle of COVID we did that. We can go down the list and that’s what we’ve done but what we’re not going to do is say where there is really bad policy ideas, we’re not going to just split the difference.
Faber: When are you guys planning on getting back together to talk? Do you have any idea?
Sec Mnuchin: Again, I’m not going to comment on the specifics or the logistics of negotiations because I don’t think that’s helpful. You know, there’s a deal to do if the democrats are reasonable and want to compromise and if their attitude is, you know, we’d rather give you nothing than agree on things, then we’re not going to get a deal. But I heard pelosi over the weekend and Schumer and I think that they’re willing to compromise again, if we can get a fair deal, we’ll do it this week.
But the president needed to take action he’s not going to sit around we left the meeting on friday. Mark Meadows and I reported back to him that we were no where and that’s why he moved forward.
Faber: Well, yeah, no where to somewhere would be good. While I got you, Mr. Secretary something else the markets were certainly focused on is our relationship with China. You have been instrumental in negotiating a potential ban on tiktok in the U.S. and negotiations for a potential buyer of that business can you give us an update on this business. Is Microsoft in position to buy TikTok or another buyer so it stays a viable business here in the United States?
Sec Mnuchin: I’m not going to comment on the specifics of microsoft negotiations or other parties. I’m very proud that congress passed an updated legislation where now we have all the tools we need to use so we have both but it’s perfectly clear that there’s 100% agreement both across republicans and democrats that we can’t have an app like this that’s collecting information on americans of this size and scale so, the president made perfectly clear.
It’s not going to continue to exist in this format and to the extent, there is an appropriate U.S. buyer that can get us comfortable with the security issues going forward that deal will be approved if not, the president has given a deadline and it will be shut down.
Cramer: Mr. Secretary, when Nancy Pelosi said that you’re basically heartless and don’t give a damn. It reached a level that we both agree is really terrible is there any way, the president just tweeted that Schumer/Pelosi wants to make a deal amazing how it all works where they were the last four weeks when they were hardliners and only wanted bailout miney for democrat run states and cities that are failing badly and they know my phone number can we ratchet it back I mean, look, this is a pandemic the country needs to get together how many states have 100,000 cases and 5 million cases in the country.
This is not the time for fancor, the time figure it out for working people in small business. That kind of rhetoric, you’ll make an effort to get that rhetoric to calm down.
Sec Mnuchin: well, Jim, the issue isn’t the rhetoric, the issue is the action so we’ve done four deals with the democrats on coronavirus we passed the U.S. MCA and we got a budget deal. When they’re reasonable, we can get deals done if they’re going to be unreasonable, we’re not going to get a deal done. But what is important is now is the time as we said in the middle of this COVID crisis we need the democrats and republicans to come together we did this previous two times 96-0, 100-0 much more diversity of ideas and we’re not nearly in the same emergency that we were in last time but we still have more work to do and that’s why we need to pass legislation let’s start with education we all agree on education.
I’ve spoken to the governors I know how much money they need. The president will be more than happy to sign a stand alone education bill well, let’s get that done. Let’s not hold up our kids and let’s not hold up our small businesses that need to get back to work. This is not about partisan politics let’s focus on the kids and the jobs
Cramer: well, Mr. Secretary, I know we have to leave, but am I wrong to have any hope here whatsoever I don’t want to be pollyanna I mean, is it just better to say, listen, better luck next time.
Sec Mnuchin: Jim, I don’t speculates if there’s a fair deal to do, we’ll do a fair deal that’s always been our approach. The president wants action that’s his first choice. There’s a fair deal to do, we’ll do it. Again, we’re not the ones who are holding this up. We’re the ones who are saying, let’s pass legislation that we can both agree on.
Cramer: All right, Mr. Secretary. I do hope that something, look, the American people hope that something happens. There’s just too many people unemployed thank you so much for coming on cnbc, though you’re always welcome because I know you represent a person who wants to get the job done. Mr. Secretary mnuchin, thank you so much.
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