Mnuchin: $900 Billion Covid Relief Bill For Small Businesses

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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, December 21. Following are links to video on

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Mnuchin: Direct payments to qualifying Americans could hit bank accounts soon

Treasury Secretary Mnuchin on targeted aid for small businesses in the $900 billion Covid relief bill


JIM CRAMER: Joining us now Treasury Secretary Steven Mnuchin to talk about the big stimulus that otherwise is being overlooked, I think. Mr. Secretary, always good to, to talk to you.

SECRETARY MNUCHIN: Always good to be with you, Jim.

CRAMER: Maybe be our last time so we’ve got to take a little perspective too but this stimulus package comes at a much different time than the last stimulus bill. How does this bill adjust to the fact that we really are in a much better world for jobs and for the economy than last time?

MNUCHIN: Well, we're definitely in a much better position and there's no question the first bill, the CARES Act is the reason why we're here today and the economy has continued to rebound but as you and I have talked about before, there are still parts of the economy that are particularly hard hit. As you know, we've been working on for months additional money for those parts of the economy and we couldn't be more pleased that we got this done in time for the end of the year. The President wanted direct payments so, we will be sending out next week direct deposit I expect we'll get the money out by the beginning of next week, $2,400 for a family of four so much needed relief just in time for the holidays. We also have extensions of the PPP you know how important this has been Jim to small business, particularly restaurants. So not only are we recycling $140 billion that's been sitting there that we've been waiting for approval, but we have substantial other money so over $325 billion targeted for small business, much more directed Congress also agreed to reinstate the tax deductibility on the PPP expenses so that'll be additional relief for small business. And I think as you know the President is particularly concerned about restaurants, so we restored the deductibility of meal expenses for business people so we couldn't be more pleased, it too long to get here but as we said before, this is about kids and jobs and vaccines.

CRAMER: Now, earlier on our air, Senator Toomey said, wait a second on the 600 that there are 93% of the people are employed in this country and a lot of those people are going to get $600 and whether that’s fair or whether it should go to people only who don't have jobs.

MNUCHIN: Well, I think, as you know that the good news is, this is a very, very fast way of getting money into the economy and again let me emphasize that people are going to see this money the beginning of next week so it's very fast. It's money that gets recirculated in the economy, so people go out and spend this money and that helps small business and that helps getting more people back to work. Now you're right, the good news is unemployment has come way down. So, I think as you know, you know we were worried about, you know, something like a great depression, again, earlier in the year, but this is now much more targeted. I expect it's needed in a short period of time and I think this will take us through the recovery. And let me just say, I'm going to push back I heard your comments on vaccine distribution I think the Department of Defense and HHS has a fabulous plan. This project Warp Speed that the President invested literally billions and billions of dollars in early on has really paid off and there's no difference that there's, there's just a huge difference of where we are now versus where we were earlier in the year.

CRAMER: Right so and I understand that and I think Warp Speed has done amazing things that I'm on record saying that. How do the people in small businesses actually get this money, is it the same system as last time and what do you do about the ones that didn't make it. Secretary Mnuchin, a lot of them just didn't make it to, to now.

MNUCHIN: Well, you're right on for that, that is unfortunate and, you know, we've said our job is not done until we get everybody back to work and that's what this is about. It is a similar distribution as last time for the PPP there'll be some additional programs also set up that are targeted. Let me just say in the PPP if businesses are down 25%, they'll be able to get a second check. We also added employer retention tax credits, up to $10,000 per quarter per person. This is a very, very big incentive for small businesses as well. And I expect this is going to have a much needed big impact and in the PPP also additional money, particularly for hotel and food services that had been hard hit.

DAVID FABER: Mr. Secretary, it’s David Faber. We've spoken in the past of course about the back and forth about direct aid to state and municipalities that's not a part of this bill but they are going to be able to potentially use existing money in different ways and I think there is at least some aid going to some of these transportation authorities, can you tell us a bit more in terms of how if you're not giving direct aid it is potentially going to at least help maybe stabilize some budgets a bit.

MNUCHIN: Well, as you said, there's, there's no question about that. I mean, first of all, let me just say, we have a lot of money going to schools, we have over $80 billion going to schools, we want to make sure that kids can get back to school safely as appropriate and that is an expense typically of the states. The money that we sent to the states last year, we gave them another year to use that money and again that was for COVID related expenses. We're, we're spending a lot of money on vaccines, in vaccine and distribution so that everybody gets the vaccine free and we get it to people. So, there is not money to make up for revenue loss but there is plenty of other money and let me just say, you know, places like California are having record tax revenues because of the capital gains associated with the great market recovery.

CRAMER: Mr. Secretary, one thing that I'm trying to get a line on is some of these groups that got money that I think people are going to be concerned about live entertainment, local newspapers and broadcasters, I presume that I'm not a beneficiary of that but that's always worth asking, airline payrolls, these all seem kind of catches, catch can now your interest had always been small business and business interruption insurance. I don't understand how these particular live entertainment, local newspaper, how did that get in?

MNUCHIN: Well, Jim, as you know and anytime getting a deal over the finish line, there's a lot of compromise that is needed so, you know, this overall bill I think is fabulous. The airlines, there was broad, broad bipartisan support for airlines, I think, you know, if we hadn't given money before and give additional money, we'd have no airline industry so we really need to keep the airlines available so that when the economy bounces back and people can travel they're there. Airline workers have been hit at no fault of their own. There is some money for what's called small venues again these venues have been shut down due to no fault of their own, but as you said, this is a large bill and has a little bit of everything in it for everybody.

CRAMER: You, for renters, can you discuss how this is going to keep people in apartments, one in four homes, one in five do rent. How do you calculate what rent is and how do these people apply for this aid.

MNUCHIN: Jim, as you know, you know, there's lots of things the President and I would have done much earlier when literally we had hundreds of billions of dollars that we just couldn't spend and rent was one of them. The President did put together a moratorium to help those that were especially hard hit. But this is a much better program, this is now rental assistance it'll be channeled through the states, the states are much better at executing this than having another federal program and it will be much needed relief for again very targeted to the people who really, really need it.

FABER: Secretary, Jim and I have spent a lot of time and Carl talking over these last nine months about the fate of restaurants and I mean how important they are to our overall economy some of the numbers are mind boggling what 900 billion or so and so many people employed and/or employed in adjunct industries that service those restaurants. So, what do you tell the small restaurant owner right here about what this bill is going to be able to do for them in terms of helping them keep the doors open, particularly if they're relying for example here in New York on only outdoor dining right now during cold months.

MNUCHIN: Well, you're right. People don't realize how big the restaurant industry really is as an employer and it tends to be very small businesses but very large employment and unfortunately, a lot of restaurants had to shut down, they just couldn't make it. There were people who were waiting for the second PPP check and just couldn't last long enough. But the good news is, for those businesses that did last, this is going to be the needed relief to get them through next year, through the vaccine and as you said, we have areas of the country where you have to eat outdoors. We have areas of the country where you can't even eat outdoors, I must say, you know, listening to the medical professionals, I do think outdoor dining with proper social distancing and people wearing masks to and from the restaurants is something that I think in many places people can do but you're right that the restaurant industry is particularly hard hit. And again, Congress decided to restore the deductibility so that's of both meals as well as the expenses that restaurants had so that's that's additional tax relief to those small businesses.

CRAMER: Mr. Secretary, this restaurant money was something you cared about tremendously and felt at a certain point maybe the Fed’s money could go back to you and Congress. Did you get any resolution on 13(3) on what it meant for small business.

MNUCHIN: We did Jim and let me just say, you know, the Treasury and the Fed really worked together in an incredible way through this crisis and if you go back to March, when the entire economy was shut down both the Fed on monetary policy and the Fed working together with the Treasury on the 13(3) facilities were instrumental in opening up the lending markets that were completely shut down. I think you may recall the initial facilities were opened by Fed Chair Powell and me using money that we had in the Exchange Stabilization Fund. That was a kind of a way we were able to do it quickly and those funds now are very clear in law that the original facilities can still be used in an emergency. I think you know Congress entrusted me with $500 billion. It was an extraordinary responsibility. Many of the democrats at the time referred to this as my slush fund. And as you know, the mere announcement of those facilities opened up the markets, so we took $250 billion, we, we used it to announce additional fed facilities, we made direct airline loans, but the majority of the money we never spent. Matter of fact, of all the fed facilities, I think we did about $25 billion in gross lending. So this really worked, what happened was the mere announcement unlocked the private markets, the private markets took over, there was $429 billion that I had that, you know, I prudently wanted to recycle for other things and that's we agreed to do and to areas of the economy that needed small businesses, kids, schools and other important things. And the Fed still has very significant risk allowable activities with the Treasury going forward but some of the super emergency facilities would have to go back to Congress and by the way, this is no different than after the financial crisis in Dodd-Frank, the Fed used to be able to lend directly to any one company, and Congress said no, we want you to come back if you need that in the future. So, I think this was a very good compromise and was key to unlocking the deal.

CRAMER: Let me ask you, in our world, $600 to individuals I have Robinhood on tonight, they would tell you a massive amount of that money went to them. I mean there's no really restrictions with $600, a lot of people, a lot of younger people who invested it you nothing wrong with that, but shouldn't it have been more targeted to certain let’s say food, I mean, like food stamps, how do you feel about maybe the unintended consequences of people investing.

MNUCHIN: Jim, first, let me just say there is money for nutrition, food as you said, there’s agriculture support in here, there's money for childcare, there's even money for broadband to make sure that kids have access to broadband, there's money in the Provider Relief Fund for more medical programs. Again, the effective part about the direct payments is they get into the economy very quickly as you said you can't target them but the fact that we can get this much money into the economy in one week, let me tell you, I spoke to many CEOs who saw their business kind of the minute that money came into the bank account, they saw their, their business increase and if some people who had extra money were fortunate enough to invest in the stock market at 18 or 20,000, they're doing pretty well today.

CRAMER: Absolutely true, we all watch the tape. On another topic, there was a hack from SolarWinds and I'm trying to figure out how bad it really is Treasury apparently was hacked in communications. At the same time, I'm not sure what how smart the Russians are or did some of these companies, including SolarWinds, just not have the right software and it could have been stopped.

MNUCHIN: Jim, I'm going to be a little bit careful in what I say because obviously I have access to information that we're not yet ready to disclose that is classified information but let me just say, I've been very focused for the last four years on cyber issues. This has been a big focus of the administration and within Treasury, we have a large group that is focused for cyber actually it's, it's led by a former general and we, we have much needed resources in working in protecting the financial industry. As it relates to this program as we've disclosed, the Treasury as a result of some third-party software and again, this is the unclassified systems at this point, we, we do not see any break in into our classified systems. Our unclassified systems did have some access. I will say the good news is there's been no damage, nor have we seen any large amounts of information displaced. I think, as you know, in this day and age where everything is connected, the issue of cyber security is very, very important and this is something that we will be continued to be focused on but we are, we are working with the National Security Council, we're working with the Intel agencies and, and I can assure you, we are completely on top of this.

CRAMER: And any communications with them soon to be Secretary Treasury Janet Yellen whom I know you've always had a good relationship with.

MNUCHIN: I have. I’ve spoken to her several times I think, as you know, we worked very closely when she was Fed Chair for the first year, so I know her very well and we had that relationship. We are cooperating with the transition team and I've had several direct sessions with her to tell her about many of the Treasury priorities and what needs to be done.

CRAMER: Mr. Secretary, we've always enjoyed working with you. Certainly, of course, happy birthday, that does matter. Pleasantries.

MNUCHIN: Thank you.

CRAMER: And thank you for all of your informing and I'd say enlightening because it's always been terrific to learn more about what you're doing for small business and you're doing for so many people who've lost their jobs. So, with that, I wish you the best of luck sir.

MNUCHIN: Thank you. It was a great birthday present for me to have Congress pass this today.

CRAMER: Yeah, don't blame you at all. I think that's right. Carl, back to you.