Treasury Secretary Steven Mnuchin has informed the US Federal Reserve that he expects the return of any and all unused funds given to it by the Treasury as part of emergency lending programs authorized by the Congress to help businesses during the Covid-19 recession. The programs, which are backed by $454 billion in funding, were set to expire at the end of the year, but could have been extended for an additional 90 days.
This was seen as yet another move by President Trump to make it more difficult for the Joe Biden administration when it gets to work on January 20. While Mr. Biden could simply order the program restarted, it would be more difficult to get things going again once the funds have been returned to the Treasury and after a two month pause.
Secretary Mnuchin’s action has been lumped together with the President’s refusal to allow the release of funds allocated for the Presidential transition process, refusal to permit President Elect Biden have security briefings or even let Mr. Biden be updated by America’s Corona Virus task force.
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While the President continues to refuse to concede the election, this latest move does not seem like something which would be done if Mr. Trump expected to remain in office. To some this action appears vindictive and a deliberate attempt to disrupt the Biden administration when it assumes office.
In a letter to the Chairman of the Federal Reserve he wrote, “I am requesting that the Federal Reserve return the unused funds to the Treasury. This will allow Congress to re-appropriate $455 billion, consisting of $429 billion in excess Treasury funds for the Federal Reserve facilities and $26 billion in unused Treasury direct loan funds.”
“In the unlikely event that it becomes necessary in the future to reestablish any of these facilities, the Federal Reserve can request approval from the Secretary of the Treasury and, upon approval, the facilities can be funded with Core ESF funds, to the extent permitted by law, or additional funds appropriated by Congress. I am deeply honored to have worked on executing these programs and hope that because of our collective actions, Congress will show similar trust in Federal Reserve Chairs and Treasury Secretaries in the future.”
The Federal Reserve, for its part, does not agree. It released a statement saying that it, “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.”
Businesses across the US could be harmed by the move. U.S. Chamber of Commerce Chief Policy Officer Neil Bradley criticized it in a statement saying, “A surprise termination of the Federal Reserve’s emergency liquidity programs, including the Main Street Lending Program, prematurely and unnecessarily ties the hands of the incoming administration and closes the door on important liquidity options for businesses at a time when they need them most.”
Republican Senator Pat Toomey of Pennsylvania, however, supports the return of the funds to the Congress. The Senator released a statement saying, “I applaud Treasury Secretary Steven Mnuchin’s decision to wind down, by year-end, the CARES Act’s temporary, emergency lending facilities, as Congress intended and the law requires.”
“These facilities, which were established in response to the unprecedented market turmoil caused by the COVID-19 pandemic earlier this year, have successfully achieved their intended purpose.”
In other Steve Mnuchin news, the Treasury Secretary’s Dune Entertainment has been implicated in the Charlotte Kirk Hollywood sex scandal.
According to the Hollywood Reporter, Dune Entertainment was hand written into a 2017 settlement which Charlotte Kirk signed over her accusations of sexual harassment. Former Warner Bros. CEO Kevin Tsujihara and NBCUniversal vice chairman Ron Meyer both resigned after admitting to sexual relationships with Kirk. Dune was exempted from liability in that agreement.
Steve Mnuchin, however, is not accused of any involvement in the allegations made by Kirk.
Treasury spokesperson Monica Crowley told the Hollywood Reporter that Mnuchin only learned of Kirk’s allegations against his former partners “when he read them in the press,”
“Secretary Mnuchin was not represented in the settlement as he was not involved nor was he aware of any settlement discussions,” she said.