Please ensure Javascript is enabled for purposes of website accessibility

West Bank Town Becomes ‘Big Prison’ as Israel Fences It In

3 days ago

Trump Says He’s Willing to Let Migrant Farm Laborers Stay in US

3 days ago

US Electric Vehicle Tax Breaks Will Expire on Sept. 30

3 days ago

Eyeing Arctic Dominance, Trump Bill Earmarks $8.6 Billion for US Coast Guard Icebreakers

3 days ago

Trump’s Sweeping Tax-Cut and Spending Bill Wins Congressional Approval

3 days ago

Americans Celebrate Their Independence With Record-Breaking Travel Numbers

4 days ago

US Supreme Court to Decide Legality of Transgender School Sports Bans

4 days ago

Nvidia Set to Become the World’s Most Valuable Company in History

4 days ago

Poll: 41% in US ‘Extremely Proud’ to Be American, Near Historic Low

4 days ago
Mnuchin Denies He's Trying to Hinder Incoming Administration
gvw_ap_news
By Associated Press
Published 5 years ago on
November 20, 2020

Share

WASHINGTON — Treasury Secretary Steven Mnuchin denied that he is attempting to limit the choices President-elect Joe Biden will have to promote an economic recovery by ending several emergency loan programs being run by the Federal Reserve.

Mnuchin said his decision was based on the fact that the programs were not being heavily utilized. He said Friday that Congress could make better use of the money by re-allocating it in another direction to support grants to small businesses and extended unemployment assistance.

“We’re not trying to hinder anything,” Mnuchin said in a CNBC interview. “We don’t need this money to buy corporate bonds. We need this money to go help small businesses that are still closed.”

However, critics saw politics at play in Mnuchin’s decision, saying the action would deprive the incoming administration of critical support the Fed might need to prop up the economy as coronavirus infections spike nationwide.

“There can be no doubt, the Trump administration and their congressional toadies are actively trying to tank the U.S economy,” Sen. Sherrod Brown, D-Ohio, said in a prepared statement Friday. “For months, they have refused to take the steps necessary to support workers, small businesses and restaurants. As the result, the only tool at our disposal has been these facilities.”

Mnuchin on Thursday had written Federal Reserve Chairman Jerome Powell announcing his decision not to extend some of the Fed’s emergency loan programs, which had been operating with support from the Treasury Department. The decision will end the Fed’s corporate credit, municipal lending and Main Street Lending programs as of Dec. 31.

The decision drew a rare rebuke from the Fed, which said in a brief statement Thursday that the central bank “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.”

Economists Argued Mnuchin’s Decision to End Five of the Emergency Loan Facilities Represents an Economic Risk

The U.S. Chamber of Commerce also criticized the move. “A surprise termination of the Federal Reserve’s emergency liquidity program, 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,” said Neil Bradley, the chamber’s executive vice president, in a prepared statement.

Private economists argued that Mnuchin’s decision to end five of the emergency loan facilities represents an economic risk.

“While the backstop measure have been little used so far, the deteriorating health and economic backdrop could shine a bright light on the Fed’s diminished recession-fighting arsenal and prompt an adverse market reaction,” said Gregory Daco, chief U.S. economist at Oxford Economics.

Under law, the loan facilities required the support of the Treasury Department, which serves as a backstop for the initial losses the programs might incur.

In his letter to Powell, Mnuchin said that he is requesting that the Fed return to Treasury the unused funds appropriated by Congress.

He said this would allow Congress to re-appropriate $455 billion to other coronavirus programs. Republicans and Democrats have been deadlocked for months on approval of another round of coronavirus support measures.

The Future of the Main Street and Municipal Lending Programs Has Taken on Greater Importance

In public remarks Tuesday, Powell made clear that he hoped that the loan programs would remain in effect for the foreseeable future.

“When the right time comes, and I don’t think that time is yet, or very soon, we’ll put those tools away,” he said in an online discussion with a San Francisco business group.

The future of the Main Street and Municipal Lending programs has taken on greater importance with President-elect Joe Biden’s victory. Many progressive economists have argued that a Democratic-led Treasury could support the Fed taking on more risk and making more loans to small and mid-sized businesses and cash-strapped cities under these programs. That would provide at least one avenue for the Biden administration to provide stimulus without going through Congress.

Neither program has lived up to its potential so far, with the Municipal Lending program making just one loan, while the Main Street program has made loans totaling around $4 billion, to about 400 companies.

Republicans including Senate Banking Committee Chairman Mike Crapo of Idaho and Sen. Pat Toomey of Pennsylvania supported Mnuchin’s move.

“Congress’ intent was clear: These facilities were to be temporary, to provide liquidity and to cease operations by the end of 2020,” Toomey said in a statement. ”With liquidity restored, they should expire, as Congress intended and the law requires, by Dec. 31, 2020.”

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

TikTok Building New Version of App Ahead of Expected US Sale, the Information Reports

DON'T MISS

Hamas Government Office Rejects US Accusation of Involvement in Gaza Aid Site Attack

DON'T MISS

Death Toll From Texas Floods Reaches 78, Trump Plans Visit

DON'T MISS

Trump Calls Musk’s Formation of New Party “Ridiculous” and Confusing

DON'T MISS

Fresno DUI Driver Slams Into CHP Motorcycle, Tow Truck on Highway 99

DON'T MISS

Russia Downs 120 Ukrainian Drones Overnight, Defense Ministry Says

DON'T MISS

Israel Sends Delegation to Qatar for Gaza Talks Ahead of Netanyahu Trip to US

DON'T MISS

San Luis Obispo’s Madre Fire Grows to Nearly 80,000 Acres, 30% Contained

DON'T MISS

Musk Announces Forming of ‘America Party’ in Further Break From Trump

DON'T MISS

Death Toll From Texas Floods Reaches 59, Including 21 Children

UP NEXT

Death Toll From Texas Floods Reaches 59, Including 21 Children

UP NEXT

Fresno Crash Involving Unlicensed Teen Driver Sends Woman to Hospital

UP NEXT

Americans Celebrate Their Independence With Record-Breaking Travel Numbers

UP NEXT

Poll: 41% in US ‘Extremely Proud’ to Be American, Near Historic Low

UP NEXT

Poorest Americans Dealt Biggest Blow Under Senate Republican Tax Package

UP NEXT

Poll: Most Americans Say National Divide, Political Violence Threaten Democracy

UP NEXT

Trump Pulls Back 150 Guard Troops From Federal Duties in California

UP NEXT

Suspect Identified in Ambush Shooting That Killed 2 Idaho Firefighters

UP NEXT

Suspect Identified in Ambush Shooting That Killed 2 Idaho Firefighters

UP NEXT

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

Trump Calls Musk’s Formation of New Party “Ridiculous” and Confusing

8 hours ago

Fresno DUI Driver Slams Into CHP Motorcycle, Tow Truck on Highway 99

14 hours ago

Russia Downs 120 Ukrainian Drones Overnight, Defense Ministry Says

15 hours ago

Israel Sends Delegation to Qatar for Gaza Talks Ahead of Netanyahu Trip to US

15 hours ago

San Luis Obispo’s Madre Fire Grows to Nearly 80,000 Acres, 30% Contained

15 hours ago

Musk Announces Forming of ‘America Party’ in Further Break From Trump

15 hours ago

Death Toll From Texas Floods Reaches 59, Including 21 Children

15 hours ago

California’s Politics Drifts Right While New York’s Leans Left

15 hours ago

How Trump’s ‘Big, Beautiful Bill’ Will Make China Great Again

2 days ago

What’s Caitlin Clark Worth to the WNBA? A Lot More Than Her $78,066 Salary.

2 days ago

TikTok Building New Version of App Ahead of Expected US Sale, the Information Reports

TikTok is building a new version of its app for users in the United States ahead of a planned sale of the app to a group of investors, The I...

8 hours ago

A logo is displayed over a door at the U.S. headquarters of the social media company TikTok in Culver City, California, U.S. January 17, 2025. (Reuters File)
8 hours ago

TikTok Building New Version of App Ahead of Expected US Sale, the Information Reports

Boxes of aid are stacked as Gaza Humanitarian Foundation said it has commenced operations to begin distribution of aid, in Rafah, in the southern Gaza Strip, May 26, 2025. (Reuters File)
8 hours ago

Hamas Government Office Rejects US Accusation of Involvement in Gaza Aid Site Attack

A volunteer searches for flood victims after deadly flooding in Kerr County, Texas, U.S., July 6, 2025. REUTERS/Sergio Flores
8 hours ago

Death Toll From Texas Floods Reaches 78, Trump Plans Visit

Tesla CEO and X owner Elon Musk listens as US President-elect Donald Trump speaks during a meeting with House Republicans at the Hyatt Regency hotel in Washington, DC, U.S. on November 13, 2024. (Reuters File)
8 hours ago

Trump Calls Musk’s Formation of New Party “Ridiculous” and Confusing

A 22-year-old suspected DUI driver crashed into a parked CHP motorcycle and tow truck on Highway 99 near Fresno, narrowly missing an officer and bystanders, CHP said Saturday, July 5, 2025. (CHP)
14 hours ago

Fresno DUI Driver Slams Into CHP Motorcycle, Tow Truck on Highway 99

A service member of a drone unit of the 24th Separate Mechanized Brigade named after King Danylo of the Ukrainian Armed Forces controls a heavy combat drone while it flies over positions of Russian troops, amid Russia's attack on Ukraine, in Donetsk Region, Ukraine June 12, 2025. (Reuters File)
15 hours ago

Russia Downs 120 Ukrainian Drones Overnight, Defense Ministry Says

An Israeli tank maneuvers in Gaza, as seen from the Israeli side of the border, July 6, 2025. (Reuters/Amir Cohen)
15 hours ago

Israel Sends Delegation to Qatar for Gaza Talks Ahead of Netanyahu Trip to US

The Madre Fire near New Cuyama has burned nearly 80,000 acres as of Sunday, July 6, 2025, morning, prompting widespread evacuation orders and warnings across three counties. (CalFire)
15 hours ago

San Luis Obispo’s Madre Fire Grows to Nearly 80,000 Acres, 30% Contained

Help continue the work that gets you the news that matters most.

Search

Send this to a friend