Moving the money into the General Fund would make it harder for Biden administration to access it
Treasury Secretary Steven Mnuchin is expected to move $455 billion in unspent coronavirus stimulus money into a fund that the incoming Biden administration cannot deploy without congressional approval, Bloomberg reported.
The CARES Act funding will be placed in the agency’s General Fund, a Treasury Department spokesperson told Bloomberg. If Mnuchin’s successor — Biden is widely expected to pick former Federal Reserve Chair Janet Yellen to fill the role — wants to access that money, she will need to receive Congress’ blessing.
The Treasury Department did not respond to a FOX Business request for comment.
Last week, Mnuchin said he would not extend several emergency loan programs set up with the Federal Reserve, prompting a rare criticism from the U.S. central bank. While the lending facilities have been little used so far, they were viewed as a vital backstop for the pandemic-ravaged economy.
The money is part of the $500 billion Treasury Department fund created at the end of March by the CARES Act. The Treasury Fund set aside $46 billion for loans and loan guarantees to the airline industry, and the remainder was designated to support Fed lending programs to businesses, states and municipalities.
Shifting the money to the General Fund leaves just under $80 billion available in the Treasury’s Exchange Stabilization Fund.
Democrats quickly condemned the move, with Bharat Ramamurti, a former adviser to Sen. Elizabeth Warren, who now serves as a member of the congressional commission charged with overseeing the funds, calling it “illegal.”
“This is Treasury’s latest ham-handed effort to undermine the Biden administration,” he 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 spokesperson, however, rejected that analysis and said Mnuchin’s decision was legal under the CARES Act, which provided the original funding.
Republicans on the Senate Banking Committee applauded Mnuchin, saying that he was following both the law and Congress’ intent.