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US Treasury Secretary Steve Mnuchin speaks at a press conference announcing the reinstatement of sanctions by the Trump administration against Iran at the US State Department in Washington on September 21, 2020.
Patrick Semansky | Swimming pool | Reuters
President-elect Joe Biden’s Treasury Secretary will need Congress to approve the reuse of $ 455 billion in funds the Trump administration is taking from the Federal Reserve and other pandemic loan programs, said Monday the treasure.
Biden is expected to appoint former Federal Reserve Chairman Janet Yellen as Secretary of the Treasury, putting a woman to work for the first time since the department was established in 1789.
Current Treasury Secretary Steve Mnuchin said last week he would allow some underused coronavirus loan programs to the Federal Reserve to expire on Dec.31 and allow Congress to spend the funds on other aid to businesses and individuals.
Biden’s transition team called the move, which limits the new administration’s ability to support financial markets during a worsening pandemic, “deeply irresponsible.”
A Treasury spokesperson confirmed a Bloomberg report saying the recovered money would go into the general treasury fund, but denied that removing it from the currency stabilization fund would put the funds off limits.
The funds are tied to the expiration of the Fed’s loan programs for midsize companies, municipal bond issuers and other borrowers, the spokesperson said, adding that any new uses, including the renewal of facilities, would require the approval of Congress.
Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, said Mnuchin’s decision was “shameful” and marked a stark contrast to his efforts to negotiate a major stimulus deal before US President Donald Trump don’t lose the election.
“As the economy recedes amid skyrocketing Covid-19 affairs, Secretary Mnuchin is engaged in economic sabotage and attempts to tie the hands of the Biden administration,” Wyden said in a statement to Reuters .
A Treasury official said on Friday that funds covering about $ 25 billion in existing loans from the facilities would remain in the Treasury, but any money repaid on the loans could not be used for anything else without Congressional approval.
By the end of 2025, according to the CARES Act passed in March, any remaining relief funds must be transferred to the General Fund and used for reducing the budget deficit.
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