- Treasury Secretary Steven Mnuchin has asked the Federal Reserve to return $455 billion in stimulus funding for key emergency lending programs when they expire at the end of the year.
- Previously, the Treasury Department was expected to extend those programs as the pandemic is still raging. Because it’s now pursuing the opposite, the Fed has rebuked Mnuchin’s decision, a rare move to see from the agency.
- Other critics have called Mnuchin’s move political, saying it appears to be a blatant attempt to hamper Biden’s transition into the White House in January.
- Still, the Fed has agreed to return the funding, and it’s now being reported that the money will be placed into an account that Mnuchin’s likely successor, Janet Yellen, will need Congressional approval to access.
Mnuchin To End Emergency Funding Without Extension
Treasury Secretary Steven Mnuchin said Thursday that he doesn’t plan to extend $455 billion in key emergency lending programs past the end of the year. Instead, he’s planning on stashing that money in a fund that his successor can’t reach without Congressional approval.
Mnuchin has asked Federal Reserve Chairman Jerome Powell to return the $455 billion in unused funding. Notably, that money is meant to fund programs stemming from the $2 trillion CARES Act — the only stimulus package Congress has agreed upon thus far. Those programs are meant to prop up the economy by providing financial assistance and loans for struggling businesses and local governments.
In his letter to Powell, Mnuchin said the Fed programs “have clearly achieved their objective” because “Markets responded positively, spreads tightened, and banks continued lending.”
While he also said that Congress will later be able to use that $455 billion for other purposes, such as PPP and grants, his decision has been so controversial that even the Fed criticized it. That’s highly unusual because the Fed isn’t usually keen on inserting itself within sensitive political issues.
The Fed has said that the programs are necessary while the pandemic rages on. In fact, it even noted the “important role” of these programs “as a backstop for our still-strained and vulnerable economy.”
The Treasury Department cannot simply reallocate that money on its own. Instead, it needs agreement from the Fed. Despite the Fed’s criticism, it ultimately gave that agreement on Friday.
Critics Blast Mnuchin’s Plan as an Attack on Biden
Top Republicans like Senate Majority Leader Mitch McConnell and Senator Patrick Toomey have backed Mnuchin’s decision. Last week, McConnell described it as “fully aligned with the letter of the law and the intent of the Congress.”
Among some Republicans, there is a concern that leaving the programs operational for too long could distort markets.
On top of that, only about $20 billion of that $455 billion has actually been used, likely because the program’s loan terms for small- and medium-sized businesses are very restrictive. Still, that’s not to say this money hasn’t been useful. As The New York Times pointed out, “Some programs calmed market conditions merely by reassuring investors.”
Connected to that and similar to the Fed’s arguments, economists are concerned that Mnuchin is pulling the plug on these programs too soon, arguing that they should not be ended before the markets have fully recovered.
The U.S. Chamber of Commerce — the largest lobbying group in the country — said that Mnuchin’s decision to end these programs “closes the door on important liquidity options for businesses at a time when they need them most.”
The chamber also added that it “unnecessarily ties the hands of the incoming administration.”
“This appears to be a political move by Team Trump to limit what President-elect Joe Biden can do next year to boost the economy, especially if Congress fails to pass a big stimulus,” Jaret Seiberg, an analyst at Cowen Inc., added.
“It’s not just closing the store down for Biden,” policy economist Ernie Tedeschi said. “It’s burning the store down.”
Mnuchin has said that this decision isn’t political. He also argued that in the “unlikely event” that these programs need to be re-established, the Fed can still request approval from other emergency funds.
Yellen Would Need Congressional Approval to Access Funds
Still, as The New York Times noted last week, this move could prevent President-elect Joe Biden’s incoming Treasury secretary from quickly restarting the efforts at scale in 2021.
That incoming secretary is expected to be Janet Yellen, who Biden chose for the role on Monday. Notably, if confirmed by the Senate, she would be the first female Treasury secretary.
On Tuesday, it was reported that Mnuchin is planning on moving that $455 billion into the Treasury’s General Fund, which means that Yellen would need Congressional approval to access any of that money.
That would then leave Yellen with only $80 billion at her discretion. While that might sound like a lot of money for the average person, it’s much less than the nearly half a trillion dollars currently set to be removed from play.
It also comes at a time where coronavirus cases are spiking, local and state governments are once again employing more restrictive lockdowns, and millions of people are set to lose their unemployment benefits at the end of the year.
Bharat Ramamurti, a Democratic member of the congressional watchdog panel overseeing the $455 billion, said on Twitter that Mnuchin’s move is illegal and that it can be reversed next year.
A spokesperson for the Treasury has asserted that Mnuchin’s move is legal under the CARES Act.
In the summer, Mnuchin initially extended the fund’s expiration date, which is why it now expires at the end of the year.
See what others are saying: (Business Insider) (Axios) (Bloomberg)
Supreme Court Rules High School Football Coach Can Pray on Field
All of our rights are “hanging in the balance,” wrote Justice Sonia Sotomayor in a dissenting opinion.
Court’s Conservatives Break With 60 Years of History
The Supreme Court on Monday ruled in favor of a former high school football coach who lost his job after he refused to stop praying on the field at the end of games.
Joseph Kennedy, who was hired at Bremerton High School in Washington State in 2008, kneeled at the 50-yard line after games for years and prayed. He was often joined by some of his players, as well as others from the opposing team.
In 2015, the school asked him not to pray if it interfered with his duties or involved students.
Shortly after, Kennedy was placed on paid administrative leave, and after a school official recommended that his contract not be renewed for the 2016 season he did not reapply for the position.
Kennedy sued the school, eventually appealing the case to the Supreme Court.
The justices voted 6 to 3, with the liberal justices dissenting.
“Respect for religious expressions is indispensable to life in a free and diverse republic — whether those expressions take place in a sanctuary or on a field, and whether they manifest through the spoken word or a bowed head,” Justice Neil Gorsuch wrote in the majority opinion.
“Here, a government entity sought to punish an individual for engaging in a brief, quiet, personal religious observance,” he added.
Justice Sonia Sotomayor wrote a dissenting opinion.
“Today’s decision is particularly misguided because it elevates the religious rights of a school official, who voluntarily accepted public employment and the limits that public employment entails, over those of his students, who are required to attend school and who this court has long recognized are particularly vulnerable and deserving of protection,” she said.
“In doing so, the court sets us further down a perilous path in forcing states to entangle themselves with religion, with all of our rights hanging in the balance.”
The defense in the case argued that the public nature of Kennedy’s prayers put pressure on students to join him, and that he was acting in his capacity as a public employee, not a private citizen.
Kennedy’s lawyers contended that such an all-encompassing definition of his job duties denied him his right to self-expression on school grounds.
“This is just so awesome,” Kennedy said in a statement following the decision. “All I’ve ever wanted was to be back on the field with my guys … I thank God for answering our prayers and sustaining my family through this long battle.”
Religious Liberty or Separation of Church and State?
Sixty years ago, the Supreme Court decided that the government cannot organize or promote prayer in public schools, and it has since generally abided by that jurisprudence.
But the court led by Chief Justice John Roberts has been increasingly protective of religious expression, especially after the confirmation of three conservative Trump-appointed judges.
Reactions to the ruling were mostly split between liberals who saw the separation of church and state being dissolved and conservatives who hailed it as a victory for religious liberty.
Americans United for the Separation of Church and State, which represented the Bremerton school district, said in a statement that the ruling “gutted decades of established law that protected students’ religious freedom.”
“If Coach Kennedy were named Coach Akbar and he had brought a prayer blanket to the 50 yard line to pray after a game,” one Twitter user said, “I’ve got a 401(k) that says this illegitimate, Christofascist SCOTUS rules 6-3 against him.”
“The people defending former Coach Kennedy’s right to kneel on the field after the game to pray – are the ones condemning Colin Kaepernick’s right to kneel on the field to protest police brutality against Black Americans,” another user wrote.
Others, like Republican Congressmember Ronny Jackson and former Secretary of State for the Trump administration Mike Pompeo, celebrated the ruling for protecting religious freedom and upholding what they called the right to pray.
“I am excited to build on this victory and continue securing our inalienable right to religious freedom,” Pompeo wrote.
See what others are saying: (The Washington Post) (The New York Times) (Fox News)
Rep. Schiff Urges DOJ to Investigate Trump for Election Crimes: “There’s Enough Evidence”
“When the Justice Department finds evidence of criminal potential criminal wrongdoing, they need to investigate,” the congressman said.
Schiff Says DOJ Should Launch Inquiry
Rep. Adam Schiff (R-Ca.) told Rogue Rocket that he believes there is “certainly […] enough evidence for the Justice Department to open an investigation” into possible election crimes committed by former President Donald Trump.
Schiff, who took the lead in questioning witnesses testifying before the House committee investigating the Jan. 6 insurrection on Tuesday, said that it will be up to the DOJ to determine whether “they have proof beyond a reasonable doubt” of criminal activity, but added that an investigation must first be launched.
“Donald Trump should be treated like any other citizen,” the congressman said, noting that a federal judge in California has already ruled that Trump and his allies “likely” engaged in multiple federal criminal acts. “When the Justice Department finds evidence of criminal potential criminal wrongdoing, they need to investigate.”
“One of the concerns I have is it’s a year and a half since these events. And while […] there’s an investigation going on in Fulton County by the district attorney, I don’t see a federal grand jury convened in Atlanta looking into this, and I think it’s fair to ask why,” Schiff continued, referencing the ongoing inquiry into Trump’s attempts to overturn the election in Georgia.
“Normally, the Justice Department doesn’t wait for Congress to go first. They pursue evidence and they have the subpoena power. They’re often much more agile than the Congress. And I think it’s important that it not just be the lower-level people who broke into the Capitol that day and committed those acts of violence who are under the microscope,” he continued. “I think anyone who engaged in criminal activity trying to overturn the election where there’s evidence that they may have engaged in criminal acts should be investigated.”
Schiff Takes Aim at DOJ’s Handling of Committee Subpoenas
Schiff also expressed frustration with how the DOJ has handled referrals the committee has made for former Trump officials who have refused to comply with subpoenas to testify before the panel.
“We have referred four people for criminal prosecution who have obstructed our investigation. The Justice Department has only moved forward with two of them,” he stated. “That’s not as powerful an incentive as we would like. The law requires the Justice Department to present these cases to the grand jury when we refer them, and by only referring half of them, it sends a very mixed message about whether congressional subpoenas need to be complied with.”
As far as why the congressman thought the DOJ has chosen to operate in this manner in regards to the Jan. 6 panel’s investigation, he said he believes “the leadership of the department is being very cautious.”
“I think that they want to make sure that the department avoids controversy if possible, doesn’t do anything that could even be perceived as being political,” Schiff continued. “And while I appreciate that sentiment […] at the same time, the rule of law has to be applied equally to everyone. If you’re so averse, […] it means that you’re giving effectively a pass or immunity to people who may have broken the law. That, too, is a political decision, and I think it’s the wrong decision.”
On the Note of Democracy
Schiff emphasized the importance of the American people working together to protect democracy in the fallout of the insurrection.
“I really think it’s going to require a national movement of people to step up to preserve our democracy. This is not something that I think Congress can do alone. We’re going to try to protect those institutions, but Republicans are fighting this tooth and nail,” he asserted. “It’s difficult to get through a Senate where Mitch McConnell can filibuster things.”
“We don’t have the luxury of despair when it comes to what we’re seeing around us. We have the obligation to do what generations did before us, and that is defend our democracy,” the congressman continued. “We had to go to war in World War II to defend our democracy from the threat of fascism. You know, we’re not called upon to make those kinds of sacrifices. We see the bravery of people in Ukraine putting their lives on the line to defend their country, their sovereignty, their democracy. Thank God we’re not asked to do that.”
“So what we have to do is, by comparison, so much easier. But it does require us to step up, to be involved, to rally around local elections officials who are doing their jobs, who are facing death threats, and to protect them and to push back against efforts around the country to pass laws to make it easier for big liars to overturn future elections.”
“We are not passengers in all of this, unable to affect the course of our country. We can, you know, grab the rudder and steer this country in the direction that we want.”
See what others are saying: (The New York Times) (The Washington Post) (CNN)
Senate Passes Bill to Help Veterans Suffering From Burn Pit Exposure
For Biden, who believes his son Beau may have died from brain cancer caused by burn pits, the issue is personal.
Veterans to Get Better Healthcare
The Senate voted 84-14 Thursday to pass a bill that would widely expand healthcare resources and benefits to veterans who were exposed to burn pits while deployed overseas.
Until about 2010, the Defense Department used burn pits to dispose of trash from military bases in Iraq, Afghanistan, and other locations, dumping things like plastics, rubber, chemical mixtures, and medical waste into pits and burning them with jet fuel.
Numerous studies and reports have demonstrated a link between exposure to the toxic fumes emitted by the pits and health problems such as respiratory ailments and rare cancers. The DoD has estimated that nearly 3.5 million veterans may have inhaled enough smoke to suffer from related health problems.
For years, the Department of Veterans Affairs resisted calls to recognize the link between exposure and illness, arguing it had not been scientifically proven and depriving many veterans of disability benefits and medical reimbursements.
Over the past year, however, the VA relented, awarding presumptive benefit status to veterans exposed to burn pits, but it only applied to those who were diagnosed with asthma, rhinitis, and sinusitis within 10 years of their service.
The latest bill would add 23 conditions to the list of what the VA covers, including hypertension. It also calls for investments in VA health care facilities, claims processing, and the VA workforce, while strengthening federal research on toxic exposure.
The bill will travel to the House of Representatives next, where Speaker Nancy Pelosi has pledged to push it through quickly. Then it will arrive at the White House for final approval.
An Emotional Cause for Many
Ahead of a House vote on an earlier version of the bill in March, comedian John Stewart publically slammed Congress for taking so long to act.
“They’re all going to say the same thing. ‘We want to do it. We want to support the veterans. But we want to do it the right way. We want to be responsible,’” he said. “You know what would have been nice? If they had been responsible 20 years ago and hadn’t spent trillions of dollars on overseas adventures.”
“They could have been responsible in the seventies when they banned this kind of thing in the United States,” he continued. “You want to do it here? Let’s dig a giant fucking pit, 10 acres long, and burn everything in Washington with jet fuel. And then let me know how long they want to wait before they think it’s going to cause some health problems.”
For President Biden, the issue is personal. He has said he believes burn pits may have caused the brain cancer that killed his son Beau in 2015.
Senate Majority Leader Chuck Schumer applauded the fact the long-awaited benefits could soon arrive for those impacted.
“The callousness of forcing veterans who got sick as they were fighting for us because of exposure to these toxins to have to fight for years in the VA to get the benefits they deserved — Well, that will soon be over. Praise God,” he said during a speech on Thursday.
A 2020 member survey by Iraq and Afghanistan Veterans of America found that 86% of respondents were exposed to burn pits or other toxins.
Although burn pits have largely been scaled down, the DoD has not officially banned them, and at least nine were still in operation in April 2019.