- 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)
Mississippi Asks Supreme Court To Overturn Roe v. Wade
The Supreme Court’s decision to consider Mississippi’s restrictive abortion ban already has sweeping implications for the precedents set under the landmark reproductive rights ruling, but now the state is asking the high court to go even further.
Mississippi’s Abortion Case
Mississippi filed a brief Thursday asking the U.S. Supreme Court to overturn Roe v. Wade when it hears the state’s 15-week abortion ban this fall.
After months of deliberation, the high court agreed in May to hear what will be the first abortion case the 6-to-3 conservative majority will decide.
Both a district judge and a panel of the U.S. Court of Appeals for the 5th Circuit had ruled that Mississippi could not enforce the 2018 law that banned nearly all abortions at 15 weeks with exceptions for only “severe fetal abnormality,” but not rape and incest.
If the Supreme Court upholds the Mississippi law, it would undo decades of precedent set under Roe in 1973 and upheld under Planned Parenthood v. Casey in 1992, where the court respectively ruled and reaffirmed that states could not ban abortion before the fetus is “viable” and can live outside the womb, which is generally around 24 to 28 weeks.
When the justices decided to hear the case, they said they would specifically examine the question of whether “all pre-viability prohibitions on elective abortions are unconstitutional.”
Depending on the scope of their decision on the Mississippi law, the court’s ruling could allow other states to pass much more restrictive abortion bans without the risk of lower courts striking down those laws.
As a result, legal experts have said the case will represent the most significant ruling on reproductive rights since Casey nearly three decades ago, and the Thursday brief raises the stakes even more.
When Mississippi asked the justices to take up its case last June, the state’s attorney general, Lynn Fitch (R), explicitly stated that the petition’s questions “do not require the Court to overturn Roe or Casey.”
But that was before the court’s conservatives solidified their supermajority with the appointment of Justice Amy Coney Barrett — who personally opposes abortion — following the death of liberal Justice Ruth Bader Ginsburg.
New Filing Takes Aim at Roe
With the new filing, it appears that Fitch views the high court’s altered makeup as an opportunity to undermine the constitutional framework that has been in place for the better part of the last century.
“The Constitution’s text says nothing about abortion,” Fitch wrote in the brief, arguing that American society has changed so much that the previous rulings need to be reheard.
“Today, adoption is accessible and on a wide scale women attain both professional success and a rich family life, contraceptives are more available and effective, and scientific advances show that an unborn child has taken on the human form and features months before viability,” she added, claiming the power should be left to state lawmakers.
“Roe and Casey shackle states to a view of the facts that is decades out of date,” she continued. “The national fever on abortion can break only when this Court returns abortion policy to the states.”
The Center for Reproductive Rights, which represents Mississippi’s sole abortion provider in the suit against the state’s law, painted Fitch’s effort as one that will have a chilling effect on abortion rights nationwide.
“Mississippi has stunningly asked the Supreme Court to overturn Roe and every other abortion rights decision in the last five decades,” Nancy Northup, the president and CEO of the group said in a statement Thursday. “Today’s brief reveals the extreme and regressive strategy, not just of this law, but of the avalanche of abortion bans and restrictions that are being passed across the country.”
The Supreme Court has not yet said exactly when during its fall term it will hear oral arguments on the Mississippi case, but a decision is expected to come down by next June or July, as is standard.
An anticipated ruling just months before the 2022 midterms will almost certainly position abortion as a top issue at the ballot box.
See what others are saying: (The New York Times) (The Washington Post) (Politico)
Republicans Boycott Jan. 6 Committee After Pelosi Rejects Two of McCarthy’s Picks
The House Minority Leader said that unless House Speaker Pelosi reinstated the two members, Republicans will launch their own investigation into the insurrection.
Pelosi Vetoes Republicans
Republicans are boycotting the select committee to investigate the insurrection after House Speaker Nancy Pelosi (D-Ca.) rejected two of the five GOP members Minority Leader Kevin McCarthy (R-Ca.) picked to serve on the panel Wednesday.
In a statement, Pelosi cited the “statements and actions” of Rep. Jim Jordan (R-Oh.) and Jim Banks (R-In.), whose nominations she said she was opposing “with respect for the integrity of the investigation.”
Jordan and Banks — both staunch allies of former President Donald Trump — have helped propagate the previous leader’s false election claims, opposed efforts to investigate the insurrection, and voted not to certify the election for President Joe Biden.
A senior Democratic aide also specifically told The Washington Post that Democrats did not want Jordan on the panel because he reportedly helped Trump strategized how to overturn the election and due to the fact he spoke to the then-president on Jan. 6, meaning there is a possibility he could be called to testify before the very same committee.
The aide also said that Democrats opposed Banks’ selection because of a statement he issued after McCarthy chose him.
In the statement, the representative compared the insurrection to the racial justice protests last summer, implied that the rioters were just normal American’s expressing their political views, and claimed the committee was a political ploy “to justify the Left’s authoritarian agenda.”
Notably, Pelosi did say she would accept McCarthy’s three other nominees — including Rep. Troy Nehls (R-Wi.), who also voted against certifying Biden’s win.
McCarthy Threatens Separate Investigation
McCarthy, however, refused to select new members, and instead opted to remove all his appointees from the would-be bipartisan committee.
In a statement condemning the move, the minority leader said that Pelosi’s action “represents an egregious abuse of power.”
“Denying the voices of members who have served in the military and law enforcement, as well as leaders of standing committees, has made it undeniable that this panel has lost all legitimacy and credibility and shows the Speaker is more interested in playing politics than seeking the truth,” he said.
“Unless Speaker Pelosi reverses course and seats all five Republican nominees, Republicans will not be party to their sham process and will instead pursue our own investigation of the facts.”
Pelosi defended her decision during a press conference Thursday, where she said that Banks and Jordan were “ridiculous” choices for the panel.
“When statements are ridiculous and fall into the realm of, ‘You must be kidding,’ there’s no way that they’re going to be on the committee,” she added.
See what others are saying: (The Washington Post) (The New York Times) (CNBC)
More Republican Are Pushing COVID Vaccinations, But the Party Remains Divided on Its Messaging
The renewed effort to encourage vaccination comes as the surge in COVID cases caused by the delta variant continues to disproportionately impact Republican-led states with low vaccination rates.
GOP Leaders Ramps Up Vaccination Push
In recent days, more Republican leaders and prominent conservatives have ramped up efforts to encourage members of their party to get vaccinated against COVID-19 as the U.S. continues to see massive surges from the delta variant.
Some, like Senate Minority Leader Mitch McConnell (Ky.), have been pushing Americans to get vaccinated for months — a call he reiterated again on Tuesday. Many others, however, have been reticent to do the same until recently.
Most notable on that list is Rep. Steve Scalise (La.), the no. 2 Republican in House leadership, who just got his first dose over the weekend after resisting vaccination, claiming he had antibodies from previously contracting COVID. Scalise explained he changed his mind because of delta and encouraged others to do the same.
“There shouldn’t be any hesitancy over whether or not it’s safe and effective,” he said.
The top leader is set to continue pushing that advice. Earlier this week, the GOP Doctors Caucus announced that it would hold a news conference Thursday alongside Scalise and the third-ranking House Republican, Rep. Elise Stefanik (N.Y.), to encourage vaccination.
Rank and File Republicans Continue To Cast Doubt, Spread Misinformation
There are still plenty of Republicans working to undermine the renewed push to get their party vaccinated.
While many have painted vaccination as a matter of freedom of choice, others have sought to downplay the virus. Florida Gov. Ron DeSantis, whose state currently accounts for 40% of all new COVID cases, dismissed the spikes as the result of a “seasonal virus” on Monday.
Rep. Barry Loudermilk — who has had COVID twice — echoed that in a statement to reporters on Tuesday, where he argued that COVID is just something everyone has to live with.
“This is something we deal with in our lives on a daily basis; ever since I’ve been born, there’s sicknesses, there’s flu, there’s different diseases,” he said.
Some members of the GOP have used their positions of power to actively fight against vaccination. That includes Sen. Ron Johnson (Wi.), who has openly said he is not vaccinated. He has also been widely condemned for promoting unproven treatments and false information about vaccines during interviews and congressional hearings.
Rep. Marjorie Taylor Greene (Ga.), who has repeatedly refused to share her vaccination status, has also drawn ire for sharing misinformation and continually comparing COVID prevention efforts to the Holocaust.
Greene was temporarily suspended from Twitter earlier this week for sharing false information on Monday, but she continued to utilize her spotlight to spread misinformation about vaccine-related deaths and side effects during a press conference the following day.
While those who downplay the coronavirus and spread false information about vaccinations are certainly not representative of the entire Republican Party, they are some of the most visible.
Greene and many of her counterparts who push anti-vaccine narratives have frequently been accused of acting in inflammatory ways to get more press — a strategy that more often than not tends to work in their favor.
As a result, Republicans who want to encourage people to get the jabs will have their work cut out for them. Even many of those who have not openly expressed skepticism themselves have still let it flourish in the party for so long by not publicly pushing back against claims from members who sow disinformation.
The GOP’s broader failure to unify around a singular message on vaccines shows clearly among the party’s base.
According to a recent Washington Post-ABC News, poll 86% of Democrats have received at least one shot, but just 45% of Republicans have done the same. While just 6% of Democrats say they are not likely to get the vaccine, 47% of Republicans said they probably will not, and 38% said they definitely will not.
Meanwhile, Republican-led states with low vaccination rates are suffering the most from the new spike in cases and the rapid spread of the delta variant.
Arkansas, which has one of the lowest vaccination rates in the country at just 35%, is currently reporting the highest per-capita cases in the U.S. Hospitalizations have gone up 85% in the state in the last two weeks, placing some hospital systems on the brink of collapse — a problem also faced by parts of Missouri, which has the third-highest COVID cases nationwide.