WHEN: Today, Wednesday, April 8, 2020
WHERE: CNBC’s “Squawk on the Street“
The following is the unofficial transcript of a CNBC interview with Treasury Secretary Steven Mnuchin and CNBC’s Jim Cramer on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) today, Wednesday, April 8th. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2020/04/08/full-interview-with-treasury-secretary-steven-mnuchin-on-coronavirus-stimulus.html.
All references must be sourced to CNBC.
JIM CRAMER: I know we’re on information overload, but you can’t get enough from the man who is the Treasury Secretary of the United States, Steven Mnuchin. Good to always have you back, Mr. Secretary.
STEVEN MNUCHIN: Great, Jim. Always good to be with all of you.
JIM CRAMER: Okay. Phenomenal, successful, this program. Phenomenal. Imagine, so successful that we need more money already. Which is great, because it’s small and medium-sized businesses. Community banks doing a terrific job. Going to go into some of the larger banks not doing as well. But can we now do the trillion-dollar war bond? 1.75% I’m willing to give you. We know that Speaker Pelosi is in favor of it. We know Larry Kudlow is in favor of it. We need the money. I want to give the treasury money. Why? To put people to work. I feel helpless. So do 317 million other people. Can we have a way, like March of Dimes against polio, to give you money so you can beat COVID?
STEVEN MNUCHIN: Jim, here’s my idea for the 50-year. We are going to be auctioning off 30 years and 20 years. Buy one of each, and it’s the 50-year. That will give us twice as much money, and we appreciate your efforts.
JIM CRAMER: So, 50-year, we would be able — can we earmark it? Or is it a 50-year Treasury — can we note it as COVID, so that we know who our enemy? It is a common enemy, Democrat and Republican.
STEVEN MNUCHIN: Jim, we’re raising over $2 trillion, as you know, for our COVID relief. We’re raising it all across the curve. And we have tremendous demand for U.S. Treasuries. Everybody wants to buy U.S. Treasuries. It’s the safe-haven. So, it’s being very well received. And I just want to comment, the SBA event we had yesterday with the president at the White House yesterday, it was a great success. He got to speak to both community bankers, as well as the large bankers. Again, we have 3,500 lenders up on the system, with many more getting signed up every day. And I want to assure all small businesses out there we will not run out of money. The president has asked us to go back to Congress. We hope they pass this tomorrow and Friday. And we want to assure everybody, if you don’t get a loan this week, you’ll get a loan next week or the following week. The money will be there.
JIM CRAMER: Alright, Mr. Secretary, you know I support this program with everything I have. I think it’s fantastic. The community bankers stepped up in a way I cannot believe. The small and medium-sized are going to be saved by that. How about the large guys? I go to Citi’s site today, and I’m pro-Citi, I think it’s a great bank, and it says: Citi is working with the SBA to provide relief to small business owners. While we are working as quickly as we can, we are not able to yet accept applications for the Paycheck Protection Program. Meanwhile, Charlie Scharf, one of the best bankers, Wells Fargo, the biggest small business lender in the country, is constrained by something that Janet Yellen did during the Friday before the Super Bowl two years ago. Let’s change that. They should be able to give all the loans they want. We need Wells and Citi involved in this if this is going to be a success, Mr. Secretary.
STEVEN MNUCHIN: Well, let me just comment. I think overall the banks have done a phenomenal job, as you said. Some of them are further ahead. I just want to reemphasize, this was just launched last Friday. So, we’re literally three days into this. I can tell you the Fed has put out a notice that they’re going to be doing a program, a 13-3 program so that they can buy these loans. So, that is going to provide in excess of 350 billion of liquidity. I know the Fed is speaking to all the banks. So, we want to make sure the SBA, the Fed Treasury, everybody is working with all the banks. Let me just comment, you know, there were a lot of banks that were signed up that had not used this system in a long time. The SBA has signed up over 30,000 individual people to be entitled on the system, and every day they sign up thousands more. Because at every single bank, you have lots of people that need to be entitled to approve these loans.
JIM CRAMER: Okay. Well, I think that — look, again I think the system is great. I know when I pick up the Times today, small business borrowers frustrated by long delays. I know it’s only been a couple of days — I know you worked all weekend, everyone is working all weekend, it’s certainly not for lack of work. I know that there’s technology. It’s just no one ever thought this would happen. But it does lead me to think, why don’t we do something in the interim for everybody who is in a jam, mortgage-wise and rent wise? What’s the problem with, instead of just canceling mortgages, which I don’t think is good for the system, we just tack on 30 days to the end of a mortgage, 30 days to the end of a lease and we literally pay people to stay at home so we can beat this thing, get the testing we need and open up America at the time when let’s just shoot for something, how about the all-star game? Something that is all American. We have got to shoot for a date, Mr. Secretary. And it can’t be wild high.
STEVEN MNUCHIN: Well, I know the president is working on a date. I know he wants to reopen the economy as soon as we get the appropriate all clear and things are looking good. And I know he wants to do that soon. As it relates to mortgages, let me just say, most of the mortgage is Fannie Mae, Freddie Mac, Ginnie Mae, FHA, and VA. As it relates to all of those, we have already put out guidance that borrowers that have issues can call up. And as you said, their payments will be tacked up on the end. And my understanding is that the banks for their own portfolio have already instituted a very similar issue. So, where we could mandate people on government-related loans, we did. And we’ve encouraged the banks to work on the private loans. So, I know that’s added much-needed relief to borrowers who are having issues in these difficult times.
DAVID FABER: Mr. Secretary, it’s David Faber. Speaking of relief, I’ve noted this in the past, I know you’re aware of it. Companies more than 500 employees who are not investment-grade who conceivably are in need of capital right now. Is Treasury thinking about a new plan to try to address that group? I’ve heard that there’s at least the idea that a lot of large investors might be putting money in towards a fund that could be levered by Treasury to access capital for these businesses at some appropriate interest rate. Is that a real effort undergone, being looked at by Treasury right now?
STEVEN MNUCHIN: It’s a very real effort. It’s not something we’re just thinking about. It’s something we’ve been actively working on. For the last week we’ve had daily calls with the Fed. This would be a 13-3 facility that we call the Main Street Lending Facility for companies that are, as you said, over the 500 persons and below the corporate facilities that we’ve announced. And we hope to have an announcement this week with the details on that and get it up and running as soon as we can.
DAVID FABER: Mr. Secretary, on Monday the president removed the Chairman of the federal panel that was overseeing the CARES act. Glenn Fein, he had been Acting Pentagon Director and he was going to be the Inspector General for the CARES program. He’s been replaced by another gentleman with that job previously at the EPA. Can you tell us why the president did that if you know why? And whether or not that’s going to create any tension with Congress when you do go back for more money? Because we have certainly gotten statements from the likes of Nancy Pelosi indicating they were unhappy with that move by the president.
STEVEN MNUCHIN: Well, I think the president thought that the appropriate oversight was very important, and that’s why he wanted to move forward quickly and nominate someone for this position. I think, you know, this is a new Inspector General that was set up under the CARES act. It’s someone who has a lot of experience. And I look forward to working with him. I think, as you know, with he very much support proper oversight. There’s also going to be a congressional oversight committee. We have enhanced disclosure. So, I think that the American public deserves to know what’s going on, given the amount of money that we’ll be putting out.
CARL QUINTANILLA: Mr. Secretary, you say the president wants to reopen the economy soon, and Kudlow yesterday did say that he would await the green light from health officials. Once that process begins, are you going to prioritize states that say contribute to GDP. Are you going to prioritize states that were either most or least effected by the crisis in the first place?
STEVEN MNUCHIN: Well, my expectation is that we’ll be opening it up based upon medical conditions. So, obviously we’d like to open up as much GDP as we can. But, you know, my expectations are that places like New York are going to take a little bit longer. And there are many areas of the country that have very little disease and have been effective at combating this. So, I think we’ll look at it on a medical basis.
JIM CRAMER: Alright, Mr. Secretary, I like many people in this country are sick of the blame game. We’re sick of, who did this wrong, who did that wrong? Enough already. Let’s think positive and let’s think of going forward. I say we have to keep the pressure on, not the media, not the Senate, not the Congress, not the President, keep the pressure on COVID. COVID is the enemy. So, why don’t we offer a big prize to anybody who tries to — who gets this thing dead? Let’s offer a March of Dimes like prize where we found out Dr. Salk, University of Pittsburgh killed the thing. Nobody thought he could do it. Why don’t we offer — offer a plan — people offer a plan to get the economy restarted and we give them a prize? We give a biotech company a prize? I think we have got to change the spirit here, Mr. Secretary. There’s way too much complaining and bitching, and not enough about how do we kill this thing called COVID, which is who unites us?
STEVEN MNUCHIN: Well, Jim, I agree with you. The best way to open up the economy and kill this is for medical breakthroughs. And let me just say, we have the most advanced medicine in the world. We already have all the medical professionals working together. I don’t think they need a big prize. I think they all understand there is a big prize, which is killing this virus. This is a giant project. And I think we have the best minds working on this. And I look forward to great advances. I know the president has already approved many drugs for compassionate use. I think there are more drugs that he’s going to be approving. I know we have now corporate America working together to basically kill this virus and provide the needed relief of various different medical tools.
JIM CRAMER: There’s no doubt about it, corporate America wants to even do more but is looking for guidance and guidance from you, sir. You’re a business person. So, let me give you some things I hear. Retail is basically closed in the country except Costco, Walmart, Target, and Amazon. But, you know what, there’s a lot of space and factory space to be able to build instead of shirts, instead of clothes, instead of dresses, we can build gowns. But someone has to say to these companies, listen, this is wartime. You have all those factories overseas in Thailand, Vietnam. We want to see gowns and we want to see them now. Not just planes from damn China. Why can’t we have these retailers do what we need? Make masks. Make gowns. Because There’s a thing called the Defense Production Act. Because we used to tell GM they have to go make planes. Why can’t we tell the retailers you have got to go make gowns?
STEVEN MNUCHIN: Jim, as you suggested, a lot of them are making gowns. A lot of them are now making masks. These things do take some time to ramp up. So, in the interim, we’re buying everything we can. I know every day I get suggestions from people that I forward on to the appropriate people in the White House. So, I know there’s a whole team in the White House who is working on these supplies to make sure we get these supplies. And we get, as you said, U.S. manufacturing. I know the president is very focused on the pharmaceutical issue. He’s been working with companies there. So, I can assure you, there’s a lot of people working on this. And we agree with you.
JIM CRAMER: Alright, Mr. Secretary, here’s radical action. I will congratulate you on a program that’s amazing, unprecedented, great speed, and has helped community banks. I know it’s unprecedented to have something just outwardly positive, but you know what, the hell with it. Good job, Mr. Secretary. Thanks for calling in.
STEVEN MNUCHIN: Thanks, Jim. Great to be with all of you.
DAVID FABER: Thank you.
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