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Democrats accused Treasury Secretary Steven Mnuchin of incorrectly citing the Cares Act to justify the termination of Fed lending programs
Mnuchin had advanced several reasons for pulling the plug on the programs, including his interpretation of the law https://www.wsj.com/articles/mnuchin-defends-decision-to-end-fed-lending-programs-11606928688
Mnuchin had advanced several reasons for pulling the plug on the programs, including his interpretation of the law https://www.wsj.com/articles/mnuchin-defends-decision-to-end-fed-lending-programs-11606928688
Mnuchin cited his reading of two sections of the Cares Act, Sections 4027 and 4029, to justify his explanation that the Fed's lending facilities can't be extended beyond Dec. 31.
Sections 4027 and 4029 say that the Treasury use any of the $500 billion Congress appropriated, including the $454 billion reserved for Fed lending programs, to make "new loans, loan guarantees, or other investments."
There is a dispute over what these words mean.
One reading: The Treasury's authority to invest in new Federal Reserve LLCs expires on Dec. 31.
Mnuchin and Sen. Pat Toomey (R., Pa.) say their intention was different: The Fed LLCs could not make new loans after Dec. 31.
One reading: The Treasury's authority to invest in new Federal Reserve LLCs expires on Dec. 31.
Mnuchin and Sen. Pat Toomey (R., Pa.) say their intention was different: The Fed LLCs could not make new loans after Dec. 31.
This is Mnuchin's legal justification for refraining from extending the facilities.
Others say Mnuchin could have adopted the broader interpretation to extend the life of the programs.
Before his Nov. 19 decision, Mnuchin hadn't expressed his current view of his legal limit.
Others say Mnuchin could have adopted the broader interpretation to extend the life of the programs.
Before his Nov. 19 decision, Mnuchin hadn't expressed his current view of his legal limit.
Democrats on Wednesday pointed to other legislative proposals Republicans had advanced to support their argument that the Cares Act didn't mean what Mnuchin and Republicans say it requires.
For example, the Heals Act, first introduced in July and submitted here on Sept. 30 by McConnell, would have explicitly terminated the Fed's authority to make new loans under the Cares Act-funded facilities by January 19, the last full day of Trump's first term.
This more direct language in the Heals Act isn't necessary if Senate Republicans can convince Mnuchin to adopt the narrower legal interpretation of the language in Sections 4027 and 4029 of the Cares Act, which is what happened.
