Courtesy of Pam Martens
Senator Ron Wyden of Oregon
On November 25, Senator Ron Wyden of Oregon Tweeted this: “The Trump administration is working harder to sabotage the economy and tie the Biden administration’s hands than it is to help working families survive a pandemic.” Wyden’s Tweet included a clip from a Bloomberg News article about how U.S. Treasury Secretary Steve Mnuchin was planning to move $455 billion of CARES Act money to the General Fund of the Treasury so that the next Treasury Secretary in the Biden administration wouldn’t be able to use it to help bolster the economy.
That same Bloomberg News article included this sentence: “The money in question includes $429 billion that Mnuchin is clawing back from the Fed — which backed some of the central bank’s emergency lending facilities…” But as we detailed last Friday, 75 percent of the $454 billion that the CARES Act earmarked for emergency lending programs at the Fed to help struggling Americans and businesses survive the pandemic and support bank lending was never handed over to those programs by Mnuchin. All that the Fed has been reporting on its weekly financial statements for months is $114 billion from the Treasury for these programs. The breakdown of that $114 billion is as follows, according to the Fed’s weekly H.4.1 financial statements: (See Footnote 14 to Table 1.) We contacted the Fed via email and it stands by this breakdown:
$10 billion for the Commercial Paper Funding Facility; $37.5 billion for the Corporate Credit Facilities to buy up corporate bonds and Exchange Traded Funds; $37.5 billion for the Main Street Lending Facilities for loans to small and mid-size businesses; $17.5 billion for the Municipal Liquidity Facility to support municipal bond issuance; $10 billion for the Term Asset-Backed Securities Loan Facility; and $1.5 billion for the Money Market Mutual Fund Liquidity Facility.
Under the structure of the Fed’s emergency lending programs, it has the ability to leverage the money coming from the Treasury by as much as 10-to-1 to expand its lending programs, if the situation warrants.
Wyden has very good reasons to be suspicious of Mnuchin’s motives. During Mnuchin’s Senate confirmation hearing on January 19, 2017, Wyden made the not-so-subtle suggestion that Mnuchin had falsified his financial disclosures to the Senate Committee. Wyden said this:
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