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Powell, Mnuchin to Congress: more aid needed

(MNUCHIN) "America is in the midst of the fastest economic recovery from any crisis in the U.S."

(POWELL) "Many economic indicators show marked improvement. Household spending looks to have recovered about three quarters of its earlier decline, likely owing in part to federal stimulus payments and expanded unemployment benefits."

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steve Mnuchin went up to Capitol Hill Tuesday with the same message - the U.S. economy is recovering faster than expected from the shutdown but more needs to be done to help Americans and businesses still hurting.

For Powell, that means the Federal Reserve will continue to do what it can, including keeping interest rates near zero for years to come, temporarily relaxing banking regulations and lending money that Congress has appropriated. But he had a warning to the House Financial Service Committee Tuesday: that won't be enough, unless there's more help for workers and the unemployed through another stimulus agreement with the White House.

"Still 11 million people unemployed so the risk is overtime they go through those savings . They haven't been able to find employment yet because it's going to take a long time, it's going to take a while to get 11 million people back to work. And so their spending will decline. Their ability to stay in their homes will decline. And so the economy will begin to feel those negative effects at some time. At the same time the economy is recovering. And that's a good thing. And it's very hard to have any certainty about the path forward, because we don't know which of those two forces will will, you know, dominate."

The $2.3 trillion CARES Act passed by Congress in March was cited by both Powell and Mnuchin for rescuing the economy from the abyss. But Congress is at an impasse on negotiations over additional economic support, emergency aid which Mnunchin said the economy needs to be given out in a more specific way than earlier this year.

"I think the next package should be much more targeted. It should be focused on kids and jobs in areas of the economy that are still hard hit, particularly areas such as the travel business and others restaurants. I think there's broad bipartisan support for extending the PPP (Paycheck Protection Program) to businesses that have had revenue drops, or a second check. I think small businesses are a large priority of that."

But getting Congress to open the purse strings again won't be easy. Both took criticism for billions of dollars that haven't been that haven't been given...small business that are still in trouble and can’t access the Fed’s lending program...and for the millions of Americans still living without a paycheck.