Mnuchin says infrastructure "priority" for US to stimulate economy in response to COVID-19 outbreak

A passenger wearing facial mask waits to buy ticket at Grand Central Station in New York, the United States, Feb. 29, 2020. (Xinhua/Wang Ying)

U.S. Treasury Secretary Steven Mnuchin said on Tuesday that infrastructure spending would be a "priority" for the Trump administration if there's any need to stimulate the U.S. economy as a result of the COVID-19 outbreak.

"I first want to note the administration's closely monitoring the coronavirus and its effects on public health as well as any effects on supply chains, markets, and the broader economy," Mnuchin said at a hearing before the House Ways and Means Committee.

"Particularly if there's any need to stimulate the economy as a result of the coronavirus, I am sure that infrastructure is a priority for the president," he said.

Richard Neal, chairman of the House Ways and Means Committee, also said in an opening statement that he thinks the administration should prioritize infrastructure as a way to stimulate the economy over temporary tax cuts.

"Before the administration begins to entertain any proposals for temporary tax cuts, the most important way that we can proceed in my judgment ... if we were to develop a stimulus package, the soundest way to do that is clearly to proceed with a major infrastructure initiative," Neal said.

Mnuchin told lawmakers that the administration stands ready to work closely with Congress on the emergency funding package to deal with the spreading coronavirus. Meanwhile, the administration is considering more tax cuts, but there's no firm plan yet.

"Let me just say that we are contemplating tax 2.0. We haven't in any way, come out with a plan that is tax 2.0. So yes, I can commit that as of now our expectation is to leave everything in place," he said.

Mnuchin also said that the administration is coordinating with international organizations and counterparts in other countries in response to the coronavirus outbreak.

"This morning, I had a call with the G7 finance ministers and central bank governors to do everything possible to limit the spread of the virus and limit the harm that it causes," he said.

Mnuchin's remarks came after the Federal Reserve earlier in the day decided to lower the target range for the federal funds rate by 50 basis points to 1 to 1.25 percent, as the COVID-19 outbreak poses "evolving risks" to economic activity.