Warren, Mnuchin spar over Treasury’s $500 billion bailout fund
Sen. Elizabeth Warren (D-Mass.) and Treasury Secretary Steven Mnuchin sparred Tuesday over the Treasury Department’s handling of a $500 billion emergency loan fund to help companies hard hit by the coronavirus pandemic.
Speaking at a Senate Banking Committee hearing, Warren repeatedly pressed Mnuchin to require companies keep all workers on board if they take money from the fund, which was part of the $2.2 trillion CARES Act signed into law in late March.
“Congress passed the CARES Act and put nearly half a trillion dollars in corporate bailout money in your hands,” Warren told Mnuchin. “The law gives Treasury and [Federal Reserve] authority to write rules for who gets the money. So does this mean that you will require companies that receive the bailout money from the taxpayers to keep their workers on payroll?”
Mnuchin replied that jobs were his top priority, but avoided answering Warren directly.
“These specifics were negotiated on a bipartisan basis very clearly in each one of these programs, and it is our intent … to fulfill both the spirit and the details of the law,” he said.
“I’m sorry, Secretary Mnuchin, that’s not quite right,” Warren shot back, noting that the law had given the Treasury Department authority on how to implement this portion of the CARES Act.
Mnuchin said the funds came with strict restrictions for companies receiving the funds, including limits on executive compensation and bans on stock dividends and buybacks, as well as a promise for businesses to make their “best efforts” to support jobs.
The $500 billion in emergency economic stabilization funds includes money set aside for the airline industry, but has only a handful of restrictions on how the rest should be used to help companies and local governments. The Treasury Department has set up several lending facilities to distribute the funds, including the Main Street Lending Program for businesses with up to 10,000 employees, a facility to help municipalities with cash flow and two corporate credit facilities.
Warren accused Mnuchin of providing easy lending terms to help his “friends” on Wall Street while leaving regular people in the dust.
“Sen. Warren, I think that’s a very unfair characterization, and these issues were discussed with both Republicans and Democrats at the time,” Mnuchin replied.
Warren also asked Mnuchin to ensure executives who lie about the condition of their company to secure taxpayer dollars be held criminally liable, something Mnuchin said he would look into.