Secretary Mnuchin Wants Grants for Main Street

There are CARES Act funds available for Congress to reallocate.

The Federal Reserve’s key pandemic lending programs expire on December 31.  Treasury Secretary Steven Mnuchin said Congress should use leftover money to help small U.S. companies with grants instead of loans.

Federal Reserve Chairman Jerome Powell and Chicago Federal Reserve Bank President Charles Evans have opposed the move by Treasury, saying that, while not being used extensively, the programs provided an important backstop for the economy with the loans.

In a letter to the Chairman, Secretary Mnuchin said that the $435 billion allocated to Treasury under the CARES Act last spring should be made available for Congress to reallocate. Much of the funds had been set aside to support Fed lending to businesses, nonprofits, and local governments.

Secretary Mnuchin said it had always been the intent of Congress for the lending programs to end December 31, but he wanted the markets to be reassured that the Fed and Treasury had many tools left to support the economy. “We have plenty of capacity left,” he said. “To the extent these need to be reactivated, we have over $800 billion of capacity, so I consider that to be a pretty good bazooka. … We want Congress to reappropriate this money.”

As the Lord Leads, Pray with Us…

  • For Congress to give prompt consideration to the potential for reallocating the billions of dollars in the forms of grants rather than loans to suffering U.S. businesses.
  • For wisdom for government officials returning states to lockdowns due to increases in positive Covid tests.

Sources: CNBC, Reuters


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