- In an extraordinary clash with the Federal Reserve, McConnell backed the Treasury’s Manuchi.
- Both want Congress to reinvent unpainted stimulus funds to support small businesses.
- “American workers shouldn’t lose their jobs unnecessarily while a second round of job-saving paycheck protection programs for hard-hit small businesses will make a big difference,” the Kentucky Republican said.
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Senate Majority Leader Mitch McConnell released a statement Friday afternoon backing Treasury Secretary Steven Muchin’s call for Congress to change the money of the obscure stimulus – and backing the Trump administration in its extraordinary clash with the Federal Reserve.
McConnell said he has a “clear right” to unused funds. He argued that it should be directed at “immediate, important, and targeted relief measures” that are not enough to address the tensions between the people and many sectors of the economy over Republican recurring democratic objections over the months.
“American workers shouldn’t lose their jobs unnecessarily while a second round of job-saving paycheck protection programs will make a big difference for hard-hit small businesses,” the Kentucky Republican said. “Our medical system should not be denied additional support, including the distribution of life-saving vaccines that appear on the horizon.”
The statement excludes any reference to helping unemployed Americans, filling a step that Munchin said Congress could take on Friday with funding. Next month, U.S. The economy of 12 million unemployed Americans faces another cliff with the risk of losing all their unemployment benefits as federal initiatives are coming to an end.
McConnell’s comments came as Munich on Friday defended its decision not to increase the five Fed emergency lending programs that lend to businesses, cities and states on December 1. The rift between the two government agencies that collaborated closely this year to manage the economic consequences of the epidemic.
In an interview with CNBC, Munuchin said Congress had devised programs for the end of this year and the Fed was wrong in its interpretation of the law. “They weren’t in the room, that’s not their job,” he said.
He also urged Congress to redistribute the money, although the Fed will also need to sign.
“We don’t need this money to buy corporate bonds. We need this money to help small businesses that are still closed or hurt, not their own fault.” “Or people who are coming to unemployment that is ending.”
At the center of the controversy was the establishment of Fed programs shortly after the Care Act was passed in March. Congress allocated 45 4,454 billion to the Treasury to back up Fed lending and settle in markets plagued by epidemics.
On Friday afternoon, Munuchi took a more conciliatory tone with Munuchi in a letter from Federal Reserve Chairman Jerome Powell. He credited the programs for maintaining stability in the financial system and said unauthorized funding would be returned.
“We will work with them to make arrangements for the return of unused portions of funds allocated to the Care Act facilities with respect to the end of the year,” he wrote.
Democrats arrested Munuchin for not increasing programs. They argued that it would limit the resources available to President-elect Joe Biden to strengthen the economy. The Biden Transition team condemned the move in a statement to the Washington Post, calling it “ir irresponsible.”
“At this critical juncture, as the Covid and economic crisis is gaining momentum again, we must strengthen the government’s ability to respond and support the economy,” said spokeswoman Kate Beddingfield.
The Treasury Secretary also faced growing criticism from economists and some Republicans over the virus case, leading to renewed sanctions and fears that the economic recovery could backfire. However, the Trump administration was more optimistic about the risks to the U.S. economy.
“The economy is booming,” Larry Cudlow, director of the White House National Economic Council, told reporters on Friday. He also said that “there are many difficulties out there” and reiterated the administration’s support for targeted assistance.
