Treasury Secretary Mnuchin is moving $455 billion of unspent stimulus money into a fund the incoming Biden administration can't deploy without Congress
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The move, experts say, would likely undercut the ability ofMnuchin's likely successor Janet Yellenfrom restarting the Fed's lending programs at a similar scale early next year. Instead, she will have only $80 billion at her discretion.Ernie Tedeschi, policy economist at Evercore ISI, called Mnuchin's decision "a dangerous move" as the US economy faces a perilous moment in the pandemic.
"It's one more enormous risk we are piling onto the winter in the US atop of other risks already there," Tedeschi told Business Insider. "We may need that backstop again as cases have now blown through their prior peaks, state and local governments are making cuts, and we're about to kick off millions of people from unemployment insurance."
The development comes after Mnuchin recently announced he was not extending most of the Fed's emergency lending programs past December 31, including those supporting markets for corporate bonds and another providing loans to medium-sized businesses and state governments. headtopics.com
The treasury and central bank jointly operate the lending programs under the CARES Act which Congress approved in March. The pandemic relief law doesn't mandate Mnuchin to move the money into the Treasury's General Fund — it could keep it within easy reach for President-elect Joe Biden in another pot of money until 2026.
Mnuchin also requested Fed Chair Jerome Powell return unspent stimulus money last week. He objected and said the lending programs should continue,between two figures that had collaborated closely to contain the economic devastation from the pandemic. The Fed later said in a letter it would return the funds.
Mnuchin then called on Congress to repurpose the unspent money, andhe drew supportfrom Republicans like Senate Majority Leader Mitch McConnell. Read more: Business Insider »
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In current conditions, why is there unspent billions in stimulus money? I cannot wrap my mind around a regular voter, not a corporate or wealthy voter but a regular person, who can support this position. I know there are who do. Try as I might, I cannot see that perspective. That’s a lot of money that could of went to restaurant and bars. Probably could of saved many that are now closed forever.
Common sense dictates that such a large amount of surplus be invested into public markets as a means of providing economic stimulus while it isn't being actively distributed. This sort of funding would not only improve the markets it's in, but also generate more wealth for use. Ironic isn’t it. Republicans will do now what the Democrats did to Trump for 4 years. Vicious cycle.......
Hard to stomach the idea of a pile of our taxes sitting unused for this long and then being shelved for longer. I think I would just like my portion returned, if they're not using it. Sick billionaires. Nothing like using Americans as pawns in their own government. Fuck the people, let’s screw over the incoming administration and hurt the people we are supposed to be governing.