WASHINGTON (AP) — Treasury Secretary Steven Mnuchin is defending his decision to close down a number of emergency Federal Reserve loan programs at a time when coronavirus cases are surging.
Democrats were unconvinced, however, saying that Mnuchin’s actions are politically motivated and take away tools that the Biden administration could use to support the economy.
Mnuchin argued that the programs he decided not to extend into next year were being lightly utilized and the more than $400 billion allocated for those Fed loan programs could be better used elsewhere if Congress moved the funds into relief programs for small businesses and unemployed workers.
Democrats aired their criticism Tuesday as Mnuchin and Federal Reserve Chairman Jerome Powell testified at a Senate Banking Committee oversight hearing about the $2 trillion CARES Act approved by Congress last March.
Powell, as he had before, urged Congress to authorize further economic support, something that lawmakers have been struggling to do for months.
A bipartisan group of lawmakers pressured congressional leaders Tuesday to accept a compromise to end the impasse on COVID-19 relief before Congress adjourns for the holidays.
The group including Senate centrists such as Joe Manchin, D-W.Va., and Susan Collins, R-Maine, are pushing a $908 billion, including $228 billion to extend and upgrade “paycheck protection” subsidies for businesses for a second round of relief to hard-hit businesses like restaurants.
It would revive a special jobless benefit, but at a reduced level of $300 per week rather than the $600 benefit enacted in March. State and local governments would receive $160 billion, and there is also money for vaccines.
Powell said Tuesday that the way to think of the additional relief was as a “bridge” to get the economy from the current situation with rising virus cases to a period when the vaccines will be widely distributed.”
“We can see the end. We just need a way to get there,” Powell told lawmakers.