WHEN: Today, Thursday, March 26, 2020
WHERE: CNBC's "Squawk on the Street"
The following is the unofficial transcript of a CNBC interview with Treasury Secretary Steven Mnuchin on CNBC's "Squawk on the Street" (M-F 9AM – 11AM) today, Thursday, March 26th. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2020/03/26/watch-cnbcs-full-interview-with-treasury-secretary-steven-mnuchin-on-coronavirus-relief-bill.html.
All references must be sourced to CNBC.
JIM CRAMER: Joining us now is Treasury Secretary Steve Mnuchin. First, Mr. Secretary, congratulations on the record time you put this together, particularly vs. 2007, 2009. When will the checks be in the mail?
SEC. STEVEN MNUCHIN: First, thanks for having me back. I want to thank the Senate for their swift action. People literally worked around the clock for five days. And the President and I and others couldn't be more pleased with the absolute unanimous support on a bipartisan basis to get this done. In regard to the checks, I announced yesterday from the White House press conference, first of all, most of these will be direct deposit, so we call them checks in the mail, but most of them will be direct deposits. It will be within three weeks. We're determined to get money in people's pockets immediately. So, that will be within three weeks.
JIM CRAMER: No issues with the House? We don't have to worry about that, can they hold it up?
SEC. STEVEN MNUCHIN: I would hope that the House passes this unanimously. I have already reached out to the speaker and to Kevin McCarthy on the sense of urgency. The American workers and American public and American business, they need the money now. So, this is not the time to debate a bill that passed with every single vote, other than the few people who couldn't be there in person.
JIM CRAMER: You know what, Mr. Secretary, when I go through the bill, what I keep finding, and it struck me, is that you told us at the very beginning, this is going to be like business interruption insurance. This is going to be about small and medium-sized business. I tried very hard to try to discredit that and I couldn't. It's really true. There's very little about corporations. It's very much about the small and medium-size. And you added the 1099, which I know is the new economy, the gig economy. Can you find all these people to give them the money? Because this is a very complicated task, to give all these people the money. Because you delivered, it goes to the people, not to the companies.
SEC. STEVEN MNUCHIN: Well, Jim, you're right. The majority of this bill is all about small business and American workers. We wanted to include in the definition of small businesses, as you said, the new gig economy, sole proprietorships. Between the small business retention loans, again, which is about 50% of the payroll. For companies that don't qualify that, there's retention tax credits that they get for retaining people. And then hopefully, for the small number of people that are laid off, there is enhanced unemployment insurance. Again, this is something that we hope only lasts a short period of time. But the president wants to make sure that all American workers are protected. They did nothing wrong. This was an act of the government for medical reasons to shut down parts of the economy. And as the Fed Chair said, we had a very, very healthy economy. We will have a healthy economy. We will win this war, as the President says, against this virus.
JIM CRAMER: Page 640 has some excellent stuff about finally get this, the Department of Defense, military. Some nice allocations to them. When I read what's happening in Elmhurst, which is New York for people all over the country, to me, it says you have defense procurement, you're going to get protection gear. How quickly can you operate on the parts of this bill that are about making the country safe, not just paychecks, which I think is marvelous, but using all this money with the Defense Department to make it so that we match up the areas that are in trouble with the help they need?
SEC. STEVEN MNUCHIN: Jim, the President has made clear to every single cabinet secretary that has a responsibility, this is about in capital words, fast. That getting money or getting action three or four months from now doesn't do anybody any good. SO, I can assure you the President and the Vice President's task force will be working to make sure every cabinet moves fast on whatever provisions they have in this bill.
JIM CRAMER: David.
DAVID FABER: Secretary Mnuchin, we knew the jobless claims number was not going to be a good one, but I'm curious what your thoughts were when you saw that 3.832 million number this morning?
SEC. STEVEN MNUCHIN: You know, to be honest with you, I think these numbers right now aren't relevant. You know, whether they're bigger or smaller in the short term. You know, obviously, there are people who have jobless claims. And the good thing about the bill is the President is protecting those people. So, now with these plans, small businesses hopefully will be able to hire back a lot of those people. Last week, they didn't know if they had protections. They didn't have any cash. They had no choice. Now with this bill passed by Congress, there are protections. And as I said, hopefully, those workers will be rehired. But between these three programs, it protects all of American workers. And by the way, you know, lots of big companies do continue to hire, for obviously, grocery stores, pharmacies, you know, delivery services. These companies are on overtime. So, I know they're hiring people as fast as they can.
DAVID FABER: Yeah. The Fed is obviously a very important part of this overall plan, Mr. Secretary. Chair Powell was on the "Today" show this morning talking about his views of the economy. How closely are you working with him? And what are your expectations in terms of the Fed taking that, what is it, $500 billion, and turning it into perhaps as much as $4 trillion in direct lending? How is that going to work?
SEC. STEVEN MNUCHIN: Well, I think you know for the last few years, the Fed Chair and I speak on a regular basis. Even in normal times, we'd always make sure we met once a week and many times we would speak multiple times a week. I can tell you, there's not a day that goes by now that he and I don't speak. Sometimes it's five times. Sometimes it's 30 times. But he and I are coordinating very closely. The way the 13-3 program works, the Fed makes a request to me as Secretary of Treasury. I have approved every single one of those requests. I can assure you that the Fed and Treasury will work together very, very closely, and we both have the same objectives, to protect American workers and protect American companies. And I must say, I applaud the Fed, even outside the 13-3 program and their swift action supporting the mortgage-backed securities market. This is about ordinary Americans getting mortgages. I also applaud FHFA, lifted certain provisions for Fannie Mae and Freddie Mac to buy mortgages. So, this is an entire government plan to kill this virus. As the President said, this is a war, and we're going to win it quickly.
DAVID FABER: 30 times a day, Secretary Mnuchin? That has to be a pretty bad day, doesn't it? What in the world are you talking about 30 times in one day?
SEC. STEVEN MNUCHIN: Not a bad day at all. It just shows there could be times when we're coordinating. I have consulted, when we were going through the negotiations on issues that impacted 13-3, I consulted with the Fed Chair constantly to make sure he was aware of the language and we were both on board. So, some of these were just technical situations. A lot of times, it could be just exchanging market information and what we're both seeing in the market. And again, these are the times when, you know, the Fed and Treasury, we each have different responsibilities, but we coordinate and act together.
JIM CRAMER: Alright, Mr. Secretary, economic stabilization, assistance to severely distressed sectors in the economy. Page 515 to 540, is really the live or die part, where you get to choose where the money goes. Not more than $25 billion available to make loans, guarantees for passenger air carriers. What is the philosophy you're going to have about what industries really need protection, what industries you may have to give equity to, and then finally, what industries are going to make it so it isn't just when the smoke clears that we have an economy run by Walmart, Costco, Home Depot, Amazon, and maybe Lowe's and Target. Because I'm worried about when we get through this, that some live, some die, and I've got to be sure that you got the right priorities because the world's looking towards you.
SEC. STEVEN MNUCHIN: Well, Jim, let me make a couple of points. First of all, both the Republicans and the Democrats supported full transparency in what we're doing. So, when we do take actions, either through our direct program or throughout programs with the Fed, there will be disclosures to the American public, much faster than they would normally occur. So, we very much support, this is a lot of money, and we support full transparency. I would also say there are two different programs. There is a program that -- where we can do things direct out of Treasury. That is focused on the airlines and companies that have national security interests. So, one of the things the President wanted to make sure, if there are certain companies that do pose national security interest to the United States, we have flexibility on that. And then the 13-3 programs with the Fed are broad-based programs. Everything from, you know, the Fed announced a corporate bond, both primary and secondary, that we put up capital already, through capital we had with the exchange stabilization fund, even before this bill was passed. As well as they have already announced we'll be working with them on a Main Street Lending Program. So, there will be transparency, and this will be broad-based for many businesses to be able to participate.
JIM CRAMER: Curious to know, when I look at the bill in its entirety, what it says to me is, one thing that's missing that I know you can provide because this is an incredible bipartisan act: can you challenge American business to keep people on the payroll? Particularly the larger public companies? Make them give a pledge, a pledge to the country that they will do everything they can to keep as many people on, like a Cisco that just did it yesterday, a Salesforce that did it, a Wynn. We need that optimism, and you can provide it.
SEC. STEVEN MNUCHIN: Jim, you know we don't believe in mandating and regulating certain big businesses. We did put restrictions on where companies take transactions, there will be restrictions on share buybacks and equity comp and dividends, but I can tell you I have been on the phone constantly. The President has had multiple conversations with all the different industries. And I Can tell you, all the big companies I hear from are doing everything they can to support their employees, their commitment. I would even tell you, you know, although the bill we passed last week on protecting people who need to have sick leave for small businesses, mostly all of the existing big companies have already come out and said they will either participate on that basis or more generous terms. So, I think the big companies are doing everything they can and understand the commitment to the American worker.
JIM CRAMER: I think that's terrific. One thing that was hard for me in the bill to understand is, what is the actual forbearance? Is there forbearance for landlords, for the people who live in a studio, who live in a one-bedroom and they've got five kids in there? Is there forbearance for the -- Cheesecake just yesterday, just use that as a metaphor, they can't pay their bill, their rent bills. Forbearance, what does it mean, and what does it mean for all the mortgage securities out there that are so difficult to understand that we have to unravel? Can people stay in their homes if they can't pay their rent?
SEC. STEVEN MNUCHIN: Jim, I want to commend Mark Calabria who oversees the FHFA which as you know is the primary regulator for Fannie Mae and Freddie Mac. And also, Secretary Carson who oversees HUD and FHA. And prior to the bill being passed they both put out guidance allowing for forbearance and putting a temporary hold on mortgage foreclosures, evictions. So, what this bill does is basically just write into law what those two people had already announced. And again, I want to commend them. They didn't wait for Congress to act. They came out last week and they already made these protections for American homeowners. We understand that, again, during this short period of time, homeowners need relief. And that's what those two individuals had already provided.
JIM CRAMER: Mr. Secretary, I know you have to go. I want to thank you. This is a real good bill and it's a great start. And I wish you the best of luck. And so does the country. Secretary Mnuchin, thank you for joining us.
SEC. STEVEN MNUCHIN: Thanks, Jim. Appreciate it. Bye.
JIM CRAMER: Absolutely.
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