Treasury Secretary Mnuchin says ‘we can’t shut down the economy again’

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Treasury Secretary Steven Mnuchin told CNBC on Thursday that shutting down the economy for a second time to combat the spread of Covid-19 isn’t a viable option and could cause even more headaches for Americans.

His comments came as Wall Street grew more concerned about a second wave of coronavirus cases in the United States. Texas has reported three consecutive days of record-breaking Covid-19 hospitalizations while nine California counties are reporting a spike in new cases or hospitalizations of confirmed cases, AP reported Wednesday.

“We can’t shut down the economy again. I think we’ve learned that if you shut down the economy, you’re going to create more damage,” Mnuchin said in an interview with CNBC’s Jim Cramer on “Squawk on the Street.” 

“And not just economic damage, but there are other areas and we’ve talked about this: medical problems and everything else that get put on hold,”  he added. “I think it was very prudent what the president did, but I think we’ve learned a lot.”

The rise cases amid U.S. reopening efforts has made investors nervous that states may have to reimpose business closures to again try to slow the spread of the coronavirus. That pessimism contributed to the Dow Jones Industrial Average’s 800 point slide Thursday morning and the S&P 500’s 2.6% loss.

Stocks that would benefit the most under a total U.S. reopening led the way lower, with United Airlines down 10%, cruise operator Carnival losing 8.8% and Gap shedding 6.6%.

United States Secretary of the Treasury Steven Mnuchin arrives for the Senate Small Business and Entrepreneurship Hearings to examine implementation of Title I of the CARES Act on Capitol Hill in Washington, DC, June 10, 2020.

Kevin Dietsch | Pool via Reuters

Mnuchin also said he’s prepared to return to Congress to request additional fiscal spending to help juice the economy if needed.

“We have the Fed program, we have Main Street [lending program], which is going to be now up and running, and we’re prepared to go back to Congress for more money to support the American worker,” he said. “So we’re going to get everybody back to work. That’s my No. 1 job working with the president and we’re going to do that.”

House Democrats last month passed a $3.5 trillion stimulus bill known as the HEROES Act that would prolong jobless benefits through the end of 2020 and provide relief for cities and states that have seen a marked drop in tax revenues. Senate Republicans have opted for a wait-and-see approach and await more data, such as last Friday’s better-than-expected jobs report, before voting to widen the federal deficit.

The Democrats’ bill would be in addition to the $2 trillion CARES Act, which President Donald Trump signed in March.

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