Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Yellen would need Congress to approve use of clawed-back Fed loan funds, Treasury says

EconomyNov 24, 2020 07:15PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Senate's Committee on Banking, Housing, and Urban Affairs hearing 2/2

WASHINGTON (Reuters) - President-elect Joe Biden's Treasury secretary will need Congress to approve re-use of $455 billion in funds that the Trump administration is taking back from Federal Reserve and other pandemic lending programs, the Treasury said on Monday.

Biden is expected to name former Federal Reserve chair Janet Yellen as his Treasury secretary, putting a woman in the job for the first time since the department was created in 1789.

Current Treasury Secretary Steve Mnuchin last week said he would allow some little-used coronavirus lending programs at the Federal Reserve to expire on Dec. 31 and allow Congress to spend the funds on other aid for businesses and individuals.

Biden's transition team called the move, which restricts the new administration's ability to backstop financial markets during a worsening pandemic, "deeply irresponsible."

A Treasury spokesperson confirmed a Bloomberg report saying that the reclaimed money will be put into the Treasury's General Fund, but denied that moving it out of the Exchange Stabilization Fund would put the funds off limits.

The funds are tied to expiring Fed lending programs for mid-size businesses, municipal bond issuers and other borrowers, the spokesperson said, adding that any new use, including renewing the facilities, would require congressional approval.

Senator Ron Wyden, the top Democrat on the Senate Finance Committee, said Mnuchin's move was "shameful" and marked a sharp contrast to his efforts to broker a large stimulus deal before U.S. President Donald Trump lost the election.

"As the economy backslides amid skyrocketing COVID-19 cases, Secretary Mnuchin is engaged in economic sabotage, and trying to tie the Biden administration’s hands," Wyden said in a statement to Reuters.

A Treasury official said on Friday that funds covering about $25 billion in existing loans from the facilities would stay at Treasury, but any money paid back from the loans could not be used for anything else without Congressional approval.

At the end of 2025, according to the CARES Act legislation passed in March, any remaining relief funds must be transferred to the General Fund and used for budget deficit reduction.

Yellen would need Congress to approve use of clawed-back Fed loan funds, Treasury says
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
Daniel Hodel
Daniel Hodel Nov 24, 2020 10:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I call for a public hanging of mnuchin, and the remainder of Trump’s personnel. True patriots destroy the enemies of the state.
Jason Zou
Jason Zou Nov 24, 2020 9:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Mnuchin will soon be irrelevant to how Treasury runs its business.
Benjamin McIntire
Benjamin McIntire Nov 24, 2020 5:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Fire the villages and salt the fields!!! Does anyone still believe Reps are good for business?
Me comment
Me comment Nov 24, 2020 5:02PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The Trump administration is a bunch of crooks and sleezeballs to the very end.
Steffen vdm
Steffen vdm Nov 24, 2020 4:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I have enough room in my account left to put it into
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email