In the News

Oversight panel puts out report; $500B fund barely touched, it notes

Arkansas Democrat Gazette
05/19/2020

The U.S. Treasury Department has barely tapped a $500 billion economic stabilization fund that was created in response to the covid-19 crisis, the Congressional Oversight Commission reported Monday.

The fund and the commission that monitors its use were created as part of the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act, which became law on March 27.

U.S. Rep. French Hill, R-Ark., is one of four people serving on the bipartisan panel.

In a 17-page report that was sent to Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell on Monday, the commissioners listed more than five dozen questions that they have thus far.

The first on the list: How will Treasury and Fed officials "assess the success or failure of this program?"

Among other things, the commissioners also want to know when officials plan to begin operating the Main Street Lending Program, which will enable small and medium-sized businesses to obtain loans.

In addition, they want a start date for the Municipal Lending Facility, which would help "state and local government manage cash flow problems relating to the COVID-19 crisis."

The report noted that the Treasury Department has already "disbursed $37.5 billion of CARES Act funds," using it to invest in the Secondary Market Corporate Credit Facility. The facility is designed to "support credit to employers by providing liquidity to the market for outstanding corporate bonds," the Fed's website states.

Between now and September 2025, the commissioners are tasked with evaluating efforts by the U.S. Treasury Department and the Federal Reserve System Board of Governors "to provide economic stability as a result of the coronavirus disease 2019 (COVID-19) pandemic of 2020," the new law states.

They will also monitor the "impact of loans, loan guarantees, and investments made under this subtitle on the financial well-being of the people of the United States and the United States economy, financial markets, and financial institutions," the law says.

While the law gives Mnuchin broad authority to administer the funds, it tasked the new commission with oversight.

Hill, a former banker from Little Rock, was appointed to serve on the commission by House Minority Leader Kevin McCarthy, R-Calif.

Joining him on the commission are U.S. Rep. Donna Shalala, D-Fla., appointed by House Speaker Nancy Pelosi, D-Calif.; U.S. Sen. Pat Toomey, R-Pa., selected by Senate Majority Leader Mitch McConnell, R-Ky.; and Bharat Ramamurti, a former aide to U.S. Sen. Elizabeth Warren, D-Mass., who was chosen by Senate Minority Leader Charles Schumer, D-N.Y.

Under the CARES Act, the commission is required to issue monthly reports. It's been hampered, however, by the failure of Pelosi and McConnell to jointly appoint a chairman to lead the body.

Despite the vacancy, the commissioners are moving forward, Hill said.

"I'm pleased that our four commissioners came together and [issued] the report as quickly as we could, considering that we don't have a chair and don't have a staff," Hill said. "I appreciate the opportunity to work with them on it and certainly encourage our leadership to reach a consensus on the chair as soon as possible."

In a letter to Mnuchin and Powell that accompanied a copy of Monday's report, the commissioners said they "look forward to meeting soon to discuss these matters."

"One of the first things we want to do is to hear directly from the Treasury and the Fed," Hill said late Monday afternoon.

Both entities have been busy helping the country navigate the recent economic challenges, Hill noted.

The Treasury Department, among other things, provided $1,200 checks or automatic deposits for tens of millions of Americans.

The Fed took actions in early March that had "a tremendous positive impact on the functioning of the bond and stock markets and calmed the market and reduced volatility," Hill said.