Treasury Secretary Steven Mnuchin removes $455 billion allocated for COVID-19 relief from the Federal Reserve, making it more difficult for the incoming Biden administration to help Americans during the pandemic.
The funds being returned to the Treasury are what remain from the CARES Act that was approved by Congress and signed into law in March. Without those funds, Biden may not be able to provide relief to families and businesses without another law passed by Congress. That would take time and probably won’t happen — Republican Senators have applauded Mnuchin’s decision.
Mnuchin also shut down five emergency COVID relief facilities that are funded by the CARES Act.
Mnuchin said last week that he was shuttering a handful of the Fed’s emergency lending facilities, a move the central bank opposed in a rare critical statement. Those facilities, though little used during the pandemic, were seen as confidence boosters for capital markets…
Bharat Ramamurti, a former adviser to Sen. Elizabeth Warren (D-Mass.) who now serves as a member of the congressional committee appointed to oversee the funds and, called Mnuchin’s move “illegal.”
“This is Treasury’s latest ham-handed effort to undermine the Biden Administration,” he said on Twitter.
The Hill (MSN link)
The law was set to expire on December 31 but could have been extended.
“The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy,” the central bank said in an unusually direct response to the letter. The Federal Reserve generally avoids weighing in on policy specifics in public.
On Tuesday, [Jerome] Powell said “I don’t think it is time yet, or very soon” to close down the programs, adding that the Fed was committed to “using all of our tools to support the recovery for as long as it takes until the job is well and truly done.”
The Hill
Sources
https://www.msn.com/en-us/news/politics/mnuchin-puts-24455b-in-covid-19-relief-funds-beyond-successors-reach/ar-BB1bm8ug
https://thehill.com/policy/finance/526785-mnuchin-asks-fed-to-return-455-billion-in-unspent-covid-emergency-funds
https://www.nytimes.com/2020/11/20/business/economy/mnuchin-fed-covid.html
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