Treasury Secretary Steven Mnuchin brings his own issues to the role of administration frontman in this crisis.
Mnuchin argued on Sunday the $600 federal payments to the unemployed are too generous. Republicans are proposing instead to cut the payment to $200 or use a formula that would peg it to two-thirds of their wages before they lost their jobs. “In some cases, people are overpaid, and we want to make sure there are the right incentives,” he said on ABC’s “This Week.'
“But some preliminary studies on the issue have not found the temporary bump is a disincentive for a noticeable number of workers,” Erica Werner and Eli Rosenberg report. “A recent study by three Yale economists found workers receiving the extra benefits returned to work at roughly the same rate as others, finding ‘no evidence that more generous benefits disincentivized work.’”
The extra payments have helped people meet basic needs, including making rent and mortgage payments. But the benefit expired last week, along with a moratorium on evictions from federally-backed housing, putting more than 12 million renters at risk of losing their homes.
Mnuchin, the Goldman Sachs veteran now helping lead the administration’s response to this crisis, found opportunity to profit in the last one. He led a group of investors that put up $1.6 billion to buy the failed IndyMac Bank from the FDIC in 2009 as the great financial crisis hit full tilt. They completed a $3.4 billion merger with CIT Group in 2015, and Mnuchin walked away with a $10.9 million severance, on top of what he earned from stock options and a multimillion-dollar salary running the bank.
Treasury Secretary Steven Mnuchin. (Stefani Reynolds/Bloomberg)
Mnuchin contended in his Senate confirmation hearings that his group stepped in to salvage a failed institution no others would touch. “OneWest inherited some 178,000 foreclosures already in the pipeline,” Politico reported. 'As house prices fell and job losses mounted, more home seizures were inevitable.” Mnuchin emphasized the bank under his leadership made more than 100,000 modification offers to borrowers.
But the bank also foreclosed on some 36,000 homes, by one estimate, and its federal regulator detailed cases of bank employees falsely claiming to review individual foreclosure filings. In 2011, the Treasury Department that Mnuchin would later lead forced his bank into an agreement to monitor the conduct of its employees.
August 4th, 2020
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