In this report, we assess the financial policy implications of today’s wide-ranging House Small Business Committee hearing with Treasury Secretary Mnuchin and SBA Administrator Carranza.  Doubtless reflecting strong industry advocacy, Treasury Secretary Mnuchin now says that Congress should consider providing automatic forgiveness for smaller PPP loans.  However, he stressed that there should not be a “blank check” for PPP loans under $150,000, saying that appropriate fraud protections must apply without elaborating on what these could entail.  Mr. Mnuchin also said that the next COVID-relief package should use a revenue test to target the PPP to hardest-hit companies that should be eligible for second loans.  In response to a demand from Chairwoman Velázquez (D-NY), Mr. Mnuchin and Ms. Carranza also supported dedicated PPP funds for small minority-owned businesses.

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