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U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Board Chairman Jerome Powell testify during a Senate hearing on Sept. 24, 2020.

POOL/Reuters

U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell appear before a congressional panel on Tuesday in a hearing likely to highlight divisions over what more should be done in response to the COVID-19 pandemic and particularly on the fate of Fed emergency programs Mnuchin wants closed.

A vaccine is on the horizon, with inoculations potentially beginning this month. But coronavirus case rates have surged, the economy remains in recession, and U.S. policy-makers are divided over whether a full-on crisis response is still needed or whether any further help should target unemployed families and small businesses.

While a vaccine may speed the recovery and job creation next year, Powell said it was not clear how long that will take given the logistics around producing and distributing the new drug.

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“It remains difficult to assess the timing and scope of the economic implications of these developments with any degree of confidence,” Powell said in prepared testimony for the Senate Banking Committee.

The intervening months “could prove challenging,” he said, and that the risks around the course of the virus and the success of the vaccine are one reason he and other Fed officials wanted to maintain emergency programs that provided loans to small businesses, local governments and others.

But the Fed has made less than $25 billion in loans and asset purchases from those programs – pennies on the amount it was willing to extend. While Fed officials feel the programs are an important safety net if conditions worsen, Mnuchin has ordered them ended on Dec. 31, and the available $455 billion directed to other pandemic aid.

Congress remains deadlocked over how much more to do, even as millions of jobless workers face the loss of unemployment insurance benefits this month.

Members of the Senate Banking Committee have split along largely partisan lines over the Fed programs. Republicans have agreed that some Fed programs could be safely ended at this point and the money put to other uses; Democrats have argued Mnuchin aims to narrow the choices available to Democratic President-elect Joe Biden and his nominee to succeed Mnuchin, former Fed chair Janet Yellen.

The hearing is the latest quarterly review of the implementation of the multitrillion-dollar CARES Act approved last spring to bolster the economy from the impact of the pandemic.

A House committee will hold a similar hearing on Wednesday.

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