Treasury Secretary Steve Mnuchin is expected to move $455 billion in unspent coronavirus relief funds allocated under the CARES Act back to the Treasury’s general fund, presumably as a way to keep a potential Biden administration from using the money in whatever way it pleases, Fox Business reported.
The unused funds were set up as a backstop for banks so that they could lend to businesses in higher-risk situations during the pandemic, but could be diverted to use for other coronavirus-related priorities under new leadership.
Giving Biden’s treasury secretary access to the funds could allow an incoming Democratic administration to allocate the money to other priorities not sanctioned in current legislation.
Biden is expected to nominate former Federal Reserve chairwoman Janet Yellen for the treasury secretary position, and moving the funds would require Yellen to get congressional approval to use them for another purpose.
Congress has still not agreed on any further coronavirus relief funding after the CARES Act was passed in late March, and differing priorities have characterized months of stalemated talks on further relief.
The Democrats’ proposed HEROES Act would have given money to propping up failing Democrat-run states and cities that were failing long before the pandemic, implementing universal mail-in voting initiatives, and free healthcare and other benefits for illegal immigrants.
By moving the funds, the congressional approval needed to approve the funding is not likely if Republicans can hold their majority in the Senate after two January runoff races in Georgia.
Democrats accuse Mnuchin
Bharat Ramamurti, a Democrat who is part of the commission set up to oversee the funds, called Mnuchin’s planned move “illegal.”
“This is Treasury’s latest ham-handed effort to undermine the Biden administration,” Ramamurti tweeted Tuesday. “The good news is that it’s illegal and can be reversed next year. For its part, the Fed should not go along with this attempted sabotage and should retain the CARES Act funds it already has.”
A Treasury spokesman disagreed with the analysis, however, and the Fed has OK’d the move while publicly saying it doesn’t support it.
Republicans on the Senate Banking Committee said Mnuchin was following both the law and Congress’ intent, adding that the funds could be restored later if they were needed again.
“These facilities were to be temporary, to provide liquidity, and to cease operations no later than the end of 2020,” GOP lawmakers including Committee Chairman Sen. Mike Crapo (R-ID) and Sen. Pat Toomey (R-PA) said in an open letter. “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.”