WASHINGTON—Treasury Secretary Steven Mnuchin on Friday defended his decision not to extend funding for several Federal Reserve lending facilities, calling on Congress to reappropriate the nearly $500 billion to help small businesses and unemployed workers.
The Treasury Department’s announcement Thursday that it would allow the funding to expire after Dec. 31 prompted a rare statement of objection from the Fed, which wants to maintain the lending programs as a backstop in the face of the continuing coronavirus pandemic.
It also fueled speculation by some commentators that the Trump administration was attempting to constrain President-elect Joe Biden’s ability to respond to the economic fallout from the pandemic as Covid-19 cases surge in the U.S.
“We’re not trying to hinder anything,” Mr. Mnuchin said in an interview Friday on CNBC. “It was very clear that the congressional intent is [that the money] expires on December [31] of this year. It’s very clear in the law.”
Fed lawyers and several lawmakers involved in drafting the Cares Act, which allocated $454 billion to support direct lending by the central bank to swaths of the economy, have expressed disagreement with that view or suggested the Treasury could have asked Congress to approve a reauthorization.
