Mnuchin defends ending Fed loan programs

WASHINGTON — Treasury Secretary Steven Mnuchin defended his decision to close a number of emergency Federal Reserve loan programs as coronavirus cases continue to rise in the country.

Senate Democrats were unconvinced, however, saying that Mnuchin’s actions are politically motivated and intended to remove tools that the incoming Biden administration could use to support the economy.

Mnuchin argued that the programs he decided not to extend into next year were being lightly utilized.

He said the $455 billion allocated for those Fed loan programs could be better used elsewhere if Congress moved the funds into relief programs for small businesses and unemployed workers.

Democrats aired their criticism Tuesday as Mnuchin and Federal Reserve Chairman Jerome Powell testified at a Senate Banking Committee oversight hearing about the $2 trillion CARES Act approved by Congress last March.

Powell, as he had before, urged Congress to authorize further economic support, something that lawmakers have been struggling to do for months.

A bipartisan group of lawmakers pressured congressional leaders Tuesday to accept a a $908 billion compromise measure to end the impasse before Congress adjourns for the holidays.

As for the five lending programs that

Mnuchin terminated, he insisted that the CARES Act that allowed for creation of the five lending programs did not give him the authority to extend them past Dec. 31.

While the Fed initially said after Mnuchin’s Nov. 19 announcement that it would have preferred that the loan programs had been extended, Powell in his appearance Tuesday was careful not to criticize Mnuchin, who was supported by Republican senators on the committee.

But Democrats charged that Mnuchin intended to hobble the Biden administration.

“You appear to be trying to sabotage our economy on the way out the door,” Sen. Sherrod Brown, D-Ohio, told Mnuchin.

Brown said there was “no legitimate justification” for Mnuchin’s actions.