U.S. Treasury Secretary Steven Mnuchin wrote in a letter to Senate Banking Committee Republicans on Friday that he hopes they will continue to show trust in the Treasury and Federal Reserve to manage coronavirus relief programs.
Mnuchin came under fire from President-elect Joe Biden’s transition team and Democrats in Congress over his decision to allow some Federal Reserve coronavirus lending programs to expire.
His action limits the ability of Mnuchin’s expected successor, Janet Yellen, to backstop credit markets for mid-size businesses, municipal bond issuers and other borrowers should financial conditions worsen, but frees up some $455 billion in borrowed cash for Congress to re-appropriate for other uses.
While Democratic Senator Ron Wyden on Tuesday called the move “economic sabotage” that would tie Biden’s hands, some Republican senators had applauded the move, including Senate Banking Committee Chairman Mike Crapo, who said markets had stabilized, credit was flowing freely and the money could provide targeted relief for hard-hit sectors or reduce debt.
“As a result of Congress’s swift legislative action and Treasury’s and the Federal Reserve’s work to implement these programs, we have been successful in restoring confidence in financial conditions,” Mnuchin said in the letter to Banking Committee Republicans.
“It is my hope that, because of our responsible use of these authorities in a manner consistent with Congressional intent, Congress will show similar trust in Treasury and Federal Reserve leadership in the future.”
A Treasury spokesperson said that the agency’s career transition team began meeting with Biden’s Treasury Agency Review Team following Monday’s decision by the General Services Administration to start the formal transition process.
The two teams would “share information and facilitate an effective transition,” the spokesperson said.
(Reporting by David Lawder; Editing by Howard Goller)