Former Treasury Sec. Jack Lew said Thursday the coronavirus pandemic does not look like the financial crisis and that the federal government should focus on the health crisis and wages for workers before addressing issues with major companies.
“It is incumbent on policy makers to look at fiscal tools very carefully and to target them where the need is greatest,” Lew said on “Closing Bell.” “I’ve been concerned by proposals that have huge amounts of money go to businesses in an un-targeted way … I think we need to wait and see where the real need is.”
Lew, who ran the Treasury from 2013 to 2017 under President Barack Obama, said that the corporate tax cut created by the current administration should have put most large businesses in a strong cash position to withstand an economic slowdown.
Instead, Lew said, the federal government should focus on helping the health care system and local governments fight the virus while supporting lower-income households. He also mentioned possibly helping states pay their bills to Medicaid.
“If you’re a family that’s living on an hourly wage and your main earners are not getting their hourly wages on a daily basis, there’s not a lot of financial reserves in those households,” Lew said. “They need immediate help in the form of assistance like SNAP, food stamps, and they need unemployment benefits.”
Congressional leaders have been negotiating this week for a relief package, but the proposed plan from House Democrats was opposed by Republicans.
Lew said he did not think the federal government should necessarily step in to help large companies that are seeing large revenue hits from the virus, such as the bailout of the auto industry during the financial crisis.
“I don’t think you should start right now thinking that this is a situation where that is the first response. Let’s start with the first things first,” Lew said.
“Let’s deal with the most vulnerable, let’s deal with the immediate health crisis, let’s deal with the small businesses that don’t have the capacity to help themselves, and let’s take a deep breath and see where things are going before we take those next steps.”