- Treasury Secretary Steven Mnuchin said Monday the deficit shouldn't be a critical concern right now.
- "Now is not the time to worry about the reduction in the deficit or the Fed's balance sheet," Mnuchin said during a CNBC interview.
- The comments come from the fact that many Republican senators are strongly against further federal spending to strengthen the economy.
- Many economists say that additional government action is needed to prevent the economic recovery from stalling while the unemployment rate remains high.
- You can find more stories on the Business Insider homepage.
Treasury Secretary Steven Mnuchin said Monday that reducing the national deficit by around $ 3 trillion shouldn't be a critical issue right now. The comments come from the fact that many Republican senators are strongly against further federal spending to strengthen the economy.
"Now is not the time to worry about reducing the deficit or the Fed's balance sheet," Mnuchin said during a CNBC interview.
—Squawk Box (@SquawkCNBC) September 14, 2020
Mnuchin praised the Federal Reserve's response to the pandemic, saying the two-pronged response saved the economy from collapse earlier this year.
"If we hadn't passed the $ 3 trillion deal and the Fed hadn't acted the way they did … I think you'd see a very different economic scenario now," he said.
Mnuchin's comments seem like a thinly veiled criticism of Republican lawmakers battling another stimulus package because of the growing federal debt. Democrats are asking for at least $ 2.2 trillion more to spend, but many Republicans are opposed to this as an expensive and unnecessary measure.
Continue reading: Morgan Stanley says the future of the stock market is "unusually dependent" on another stimulus package – and recommends 5 portfolio moves that should be made if Congress passes another round
Congress has pumped more than $ 3 trillion in emergency spending into the economy since March, increasing the debt to $ 26.7 trillion so far. But over a dozen Republican senators shrink from the idea of approving more federal aid, arguing that the economy is recovering on its own.
"We don't have an unlimited checking account," said Wisconsin Senator Ron Johnson said in early August.
Many economists say another sizeable stimulus package is needed to keep an economic recovery from stalling, suggesting the low cost of borrowing and an inflation rate that is being kept in check. The number of permanent layoffs is increasing and nearly 30 million Americans are receiving unemployment benefits.
"If the economy is on a stronger footing, serious thought must be given to the country's unsound budget development," said former Finance Ministers Robert Rubin and Jacob Lew wrote in a Washington Post last week. "But with a pandemic in the midst of a prolonged, deep recession, this is not the time for deficits to stand in the way of adequately addressing the crisis and the huge needs that come with it."
On Thursday, Democrats blocked a $ 500 billion GOP stimulus plan and ridiculed it as "emaciated" for lack of additional aid to state and local governments or a second round of economic reviews of $ 1,200 for Americans included.
The proposal also included a $ 300 surcharge on state unemployment benefits, only half of what the Democrats want to achieve.