Mnuchin, Powell Strike Somber Tones On Economy But Offer Different Paths Forward

The Wall Street Journal: Powell, Mnuchin Outline Contrasting Perils Facing Economy
The nation’s top two economic policy leaders offered contrasting visions about the economic outlook, with Treasury Secretary Steven Mnuchin favoring a wait-and-see approach to more federal aid and Federal Reserve Chairman Jerome Powell suggesting more would be needed. Their positions expressed Tuesday reflected differing views on the prospects for a swift economic rebound from the coronavirus pandemic. (Timiraos and Davidson, 5/19)

The Hill: Powell, Mnuchin Split On Benefits Of Easing COVID-19 Restrictions 
Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin warned Tuesday that the economy could suffer long-term damage without further congressional action on the coronavirus pandemic, but differed over how the country and its leaders should tackle that challenge. During a joint virtual appearance before the Senate Banking Committee, Powell and Mnuchin revealed one of the few differences in their approaches to guiding the world’s largest economy out of the worst downturn since the Great Depression. Their input comes amid an escalating partisan battle over easing restrictions imposed to slow the spread of COVID-19. (Lane, 5/19)

Reuters: Mnuchin Defends U.S. Fiscal Response To Pandemic, Seeks Payroll Loan Extension
In a sometimes testy hearing before the Senate Banking Committee, Mnuchin and Federal Reserve Chair Jerome Powell said the nearly $3 trillion in federal rescue programs rolled out over the past two months were working to support an economy devastated by the novel coronavirus. The Treasury and Fed chiefs faced tough questions over whether the administration’s plans to quickly reopen the economy in the wake of lockdowns imposed in March and April would leave low-wage workers without adequate protections from the virus. (Lawser, 5/19)

The New York Times: Top Policymakers Warn That The Economy Is Likely To Weaken Before A Turnaround Begins.
Mr. Powell sounded a more cautious tone, explaining that a full recovery will not come until the health crisis is resolved. “The No. 1 thing, of course, is people believing that it’s safe to go back to work, and that’s about having a sensible, thoughtful reopening of the economy, something that we all want — and something that we’re in the early stages of now,” Mr. Powell said. “It will be a combination of getting the virus under control, development of therapeutics, development of a vaccine.” (5/19)

ABC News: Mnuchin, Powell Differ On Outlook As They Defend US Economic Response To Coronavirus 
Mnuchin did warn of the possibility of severe and extended economic downturn, saying "there is the risk of permanent damage.” But he also reiterated "We expect economic conditions to improve in the third and fourth quarter and into next year." Powell disagreed with that prediction in an interview with CBS News program "60 Minutes" on Sunday, saying "it may take a period of time, it could stretch through the end of next year, we really don't know.” (Kolinovsky, 5/19)

The Washington Post: Mnuchin Defends White House Push To Reopen Economy As Democrats Voice Growing Concerns
“How many workers will die if we send people back to work without the protections they need, Mr. Secretary?” Sen. Sherrod Brown (D-Ohio) asked Mnuchin. “How many workers should give their lives to increase our [gross domestic product] by half a percent?” “No workers should give their lives to do that, Mr. Senator, and I think your characterization is unfair,” Mnuchin replied, insisting that the administration is working with governors and has provided “enormous amounts” of protective equipment. (Werner, Kim and Stein, 5/19)

In other news on the economy —

The New York Times: Too Big To Fail: The Entire Private Sector
During the 2008 financial crisis, Wall Street banks and other big financial institutions were deemed “too big to fail.” The crisis unleashed by the pandemic has broadened that elite status to a significant swath of the American private sector. In a bid to soften the coronavirus’s economic blow, the government has stretched its financial safety net wide — from strategically sensitive companies, to entire industries such as energy and airlines, to the market for corporate bonds. (Phillips, 5/19)

ABC News: For Minority-Owned Businesses Shut Out Of Coronavirus Loans, An Ongoing Push For Access
Rahama Wright has been in business for 15 years, but the experienced entrepreneur could never have foreseen the impacts of a pandemic coming her way. "It has been an up and down rollercoaster," Wright told ABC News' Alex Presha. The owner of Shea Yeleen, a social impact business that sells shea butter products made by women in rural west African villages, Wright says one of the lowest points was being unable to secure a Paycheck Protection Program loan from the government's coronavirus emergency response. (Kolinovsky, 5/20)

The Wall Street Journal: Floridians Lose Patience With State’s Unemployment Claims System
Florida’s problem-riddled unemployment system is emerging as the face of national frustration and angst felt by workers sidelined by the coronavirus pandemic. A number of states’ unemployment systems have suffered delays and other glitches due to a historic surge of applicants and faulty computer systems. Florida, though, has seen sustained issues, and outrage continues to build. On Monday, Gov. Ron DeSantis, a Republican, said some applicants weren’t completing forms correctly. (Leary, 5/19)

The Hill: Workers File Class-Action Lawsuit Against McDonald's Over Coronavirus Precautions 
A group of McDonald's employees in Chicago on Tuesday filed a class-action lawsuit alleging that the fast-food chain failed to adopt government safety guidelines to protect workers amid the coronavirus outbreak, Reuters reported. The lawsuit accuses McDonald's of failing to provide a sufficient amount of hand sanitizer, gloves and masks. It also claims that the company hadn't contacted staff when an employee had tested positive for COVID-19, according to a copy of the suit obtained by the news service. (Wise, 5/19)

WBUR: A Labor Attorney On The Rights Of Employees Returning To Work
Some companies in Massachusetts can begin calling up to a quarter of their workforce back to offices as soon as next Monday. Other industries, such as construction and manufacturing, can resume work immediately — as long as proper safety measures are in place. While some workers may be more than happy to get back out there, others are wondering about the health and their rights. (Oakes, 5/19)