Mnuchin to put $455B in COVID-19 relief funds beyond successor's reach

Treasury Secretary Steven MnuchinSteven MnuchinDemocrats justified in filibustering GOP, says Schumer Yellen provides signature for paper currency Biden's name will not appear on stimulus checks, White House says MORE signaled that he will move $455 billion in COVID-19 relief from the Federal Reserve back into the Treasury’s General Fund, a move that would make it harder for his successor to access the emergency funding.

Mnuchin said last week that he was shuttering a handful of the Fed's emergency lending facilities, a move the central bank opposed in a rare critical statement. Those facilities, though little used during the pandemic, were seen as confidence boosters for capital markets.

The amount to be returned by Mnuchin was part of a $500 billion allocation in the $2.2 trillion CARES Act that President TrumpDonald TrumpThe Memo: The Obamas unbound, on race Iran says onus is on US to rejoin nuclear deal on third anniversary of withdrawal Assaults on Roe v Wade increasing MORE signed into law in late March.


Mnuchin at the time requested the Fed return the funding, which Congress appropriated to cover potential pandemic-related losses, saying the CARES Act set a legal deadline for the facilities to expire by year’s end.

Putting the cash back into the general fund would make it harder for former Fed chair Janet YellenJanet Louise YellenRepublicans attack Biden agenda after disappointing jobs report On The Money: Five takeaways on a surprisingly poor jobs report | GOP targets jobless aid after lackluster April gain Bad jobs report amplifies GOP cries to end 0 benefits boost MORE, President-elect Joe BidenJoe BidenDefense lawyers for alleged Capitol rioters to get tours of U.S. Capitol Sasse to introduce legislation giving new hires signing bonuses after negative jobs report Three questions about Biden's conservation goals MORE's reported pick to lead the Treasury Department next year, to deploy the funds, and may require another act of Congress to do so.

Bharat Ramamurti, a former adviser to Sen. Elizabeth WarrenElizabeth WarrenFree Speech Inc.: The Democratic Party finds a new but shaky faith in corporate free speech Debate over ICBMs: Will 'defund our defenses' be next? Manchin on collision course with Warren, Sanders MORE (D-Mass.) who now serves as a member of the congressional committee appointed to oversee the funds, called Mnuchin's move “illegal.”

“This is Treasury’s latest ham-handed effort to undermine the Biden Administration,” he said on Twitter.

Neither the Treasury Department nor the Biden transition team immediately responded to a request for comment.


Republicans on the Senate Banking Committee applauded Mnuchin, saying he was faithfully following the intent and letter of the law.

“Congress’s intent was clear: these facilities were to be temporary, to provide liquidity, and to cease operations no later than the end of 2020,” GOP lawmakers said in a letter spearheaded Committee Chairman Mike CrapoMichael (Mike) Dean CrapoBiden to meet with GOP senators amid infrastructure push Bottom line Senate GOP crafts outlines for infrastructure counter proposal MORE (Idaho) and Sen. Pat ToomeyPatrick (Pat) Joseph ToomeySasse rebuked by Nebraska Republican Party over impeachment vote Philly GOP commissioner on censures: 'I would suggest they censure Republican elected officials who are lying' Toomey censured by several Pennsylvania county GOP committees over impeachment vote MORE (Pa.).

“With liquidity restored, we strongly support Treasury Secretary Mnuchin’s decision to close these facilities by year-end, as Congress intended and the law requires, and the Federal Reserve’s decision to return unused CARES Act funds to Treasury,” they added.

The GOP senators said Congress could take action to “revive” the facilities if the need arose. But Congress has struggled to pass extensions for key provisions of the CARES Act that expired July 31, and congressional leaders have remained deadlocked over a new coronavirus relief bill for months.

Updated at 3:42 p.m.