Senators Express Outrage at Hearing over Mnuchin’s Sneakiness with $500 Billion of Taxpayers’ Money

May 20, 2020

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U.S. Treasury Secretary Steve Mnuchin

We’ve been watching Senate Banking Committee hearings for decades. There is typically some level of professional politeness by Senators toward witnesses that are testifying. That didn’t happen yesterday. Both Republicans and Democrats lashed out at Treasury Secretary Steve Mnuchin for effectively cooking up a deal that put him in charge of $500 billion of taxpayers’ money under the stimulus bill known as the CARES Act and has now left Congress in the dark about how that money is being spent. During the hearing, which was held virtually, Senator Elizabeth Warren of Massachusetts summed up the situation to Mnuchin like this: “You are boosting your Wall Street buddies and leaving Americans behind.”

The hearing was called to hear from both Mnuchin and Fed Chair Jerome Powell. The CARES Act, irresponsibly, gave Mnuchin control of $500 billion, of which $454 billion was earmarked to go to the Fed to be leveraged into a $4.54 trillion bailout program. Apparently, Democrats were promised the money would go to help Main Street while the actual crafters of the legislation conveniently forgot to put that language in the bill. The bulk of the numerous programs set up by the Fed, which will use CARES Act money to absorb losses, are structured as bailout programs for Wall Street or the fossil fuels industry.

Senator Elizabeth Warren Grills Treasury Secretary Steve Mnuchin at Senate Banking Hearing on May 19, 2020

During the hearing yesterday, Democratic Senator Elizabeth Warren derided the $500 billion as a “slush fund” while Republican Senator John Kennedy of Louisiana described it as a backroom deal put together by Mnuchin, Mitch McConnell, Nancy Pelosi, Kevin McCarthy, and Chuck Schumer and then forced on other members of Congress who didn’t get to participate in the negotiations. Kennedy said Congressional members “moan and groan and complain and then moo and follow their leaders in the shoot like cattle.” Kennedy promised Mnuchin that the next deal he attempts to bring to Congress on this basis is going to receive “serious pushback from Republicans and Democrats in both houses.”