When the United States Congress passed the CARES Act earlier this year, it was unprecedented in scale. One of the key components was a major allocation of funds to an emergency lending program at the Federal Reserve that is set to expire at the end of the calendar year.
Rather than choosing to renew the program, Secretary Mnuchin instead asked that the Federal Reserve return the funds when the program expires. This will allow Congress to allocate the $455 billion in funds to other projects. Fiscal hawks have applauded the decision in a year where the federal deficit hit a record level, rather than forcing the treasury to borrow more.
The Federal Reserve said it disagreed with the decision in a statement, saying it "would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy."
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