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Acting Chairman of the Council of Economic Advisers Tyler Goodspeed said that while ‘significant’ issues remain, Treasury Secretary Steven Mnuchin and House of Commons Speaker Nancy Pelosi are ‘moving closer’ of a coronavirus stimulation agreement.
Treasury Secretary Steven Mnuchin is expected to transfer $ 455 billion of unspent coronavirus stimulus money into a fund the new Biden administration cannot deploy without Congressional approval, Bloomberg reported.
The funding for the CARES Act will be placed in the agency’s general fund, a Treasury Department spokesperson told Bloomberg. If Mnuchin’s successor – Biden should usually pick former Federal Reserve Chairman Janet Yellen to fill the role – wants to access that money, she will need to receive the blessing of Congress.
The Treasury Department did not respond to a request for comment from FOX Business.
MNUCHIN LAUNCHES A CONNECTION TO CERTAIN PANDEMIC LOAN PROGRAMS THAT THE FED CONSIDERS ESSENTIAL
Last week, Mnuchin said he would not extend several emergency loan programs put in place with the Federal Reserve, which drew rare criticism from the U.S. central bank. Although the loan facilities have been little used so far, they were seen as vital support for the economy ravaged by the pandemic.
The money is part of the Treasury Department’s $ 500 billion fund established at the end of March by the CARES Act. The Treasury Fund set aside $ 46 billion for loans and loan guarantees to the airline industry, and the remainder was designated to support the Fed’s lending programs to businesses, states and municipalities.
Transferring the money to the General Fund leaves just under $ 80 billion available in the Treasury’s Exchange Stabilization Fund.
FED KEEP TARIFFS STABLE, SAYS ECONOMY REMAINS “ WELL BELOW ” PREPANDEMIC LEVELS
Democrats were quick to condemn the move, with Bharat Ramamurti, a former adviser to Senator Elizabeth Warren, who is now a member of the congressional committee overseeing the funds, calling it “illegal.”
“This is the Treasury’s latest clumsy effort to undermine the Biden administration,” he tweeted Tuesday. “The good news is that it is illegal and can be canceled next year. For its part, the Fed should not accept this attempted sabotage and should keep the CARES Act funds it already has.”
A Treasury spokesperson, however, dismissed this analysis and said Mnuchin’s decision was legal under the CARES Act, which provided the initial funding.
Republicans on the Senate Banking Committee applauded Mnuchin, saying he was following both the law and the intent of Congress.
ECONOMIC GROWTH IN THE UNITED STATES REDUCES A RECORD TO 33.1%, BUT ESCAPES THE CORONAVIRUS RECESSION
“These facilities were to be temporary, provide liquidity and cease operations no later than the end of 2020,” GOP lawmakers said in an open letter led by committee chair Senator Mike Crapo and Senator Pat Toomey . , we strongly support Secretary of the Treasury Mnuchin’s decision to shut down these facilities by the end of the year, as expected by Congress and the law requires, as well as the Federal Reserve’s decision to return unused funds. of the CARES law to the Treasury.
Lawmakers said Congress could “revive” the facilities if necessary. But for months, Congress has stalled on further coronavirus relief measures, even as the CARES Act’s provisions expired.
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