Treasury Secretary Steven Mnuchin's plans to transfer $455 billion in unspent CARES Act funding into a general fund account that his successor will not be able to use without congressional approval sparked rebuke Wednesday from congressional Democrats.
House Ways and Means Committee Chairman Richard E. Neal, D-Mass., criticized the plan and the White House for politicizing the pandemic.
"Now, on their way out the door, they're continuing to put petty politics ahead of Americans' safety. The next administration needs access to all available resources to continue fighting the virus and getting Americans back to work," Mr. Neal said in a statement. "The Trump administration still doesn't understand that the stock market is not the same thing as the economy. Their inability to grasp the American people's hardship has real consequences."
Bharat Ramamurti, managing director of the corporate power program at the Roosevelt Institute and a member of the congressional committee overseeing the Coronavirus Aid, Relief and Economic Security Act's COVID-19 relief funds, said Mr. Mnuchin's move violates the law and could be promptly corrected by the incoming Biden Administration.
"This is Treasury's latest ham-handed effort to undermine the Biden Administration. The good news is that it's illegal and can be reversed next year," Mr. Ramamurti said on Twitter.
Mr. Mnuchin said Nov. 19 that he was personally involved in drafting the CARES Act provision related to the funding, and he believed the congressional intent was to have the authority expire Dec. 31, prompting his request that the Federal Reserve return the unused funds to the Treasury. "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," Mr. Mnuchin said at the time.
Senate Banking Committee Chairman Mike Crapo, R-Idaho, agreed with Mr. Mnuchin's analysis of the success of the program and the language allowing its termination. "Returning the unused $455 billion to the Treasury allows those funds to be reappropriated for other uses, such as reducing our national debt, or providing additional targeted relief to sectors of the economy most in need," Mr. Crapo said in a Nov. 19 statement. "Since the announcement of the backstop facilities, markets have stabilized, liquidity has improved and credit has flowed more freely. More than $1 trillion in new nonfinancial corporate bonds and more than $250 billion in municipal debt has been issued, almost entirely by the private sector."