House Financial Services Committee Chairwoman Maxine Waters called Treasury Secretary Steven Mnuchin’s decision to end several Federal Reserve lending programs amid the pandemic “foolish and reckless.”
“The law does not say that,” she said of what she called his “novel interpretation” of the law.
“What you’re doing is contrary to what’s lawful, and puts our entire economy in jeopardy,” Ms Waters said.
But the Treasury secretary shot back: “I believe I am following the law” as he read aloud the section of the law that is in question.
“The transfer of the funds is not up to me,” Mr Mnuchin said.
Federal Reserve Chairman Jerome Powell demurred when Ms Waters asked his view of the situation, saying Congress handed the treasury secretary “sole authority” over the lending funds. “And we respect that,” he said of the central bank.
Democrats want the monies to be used to help small businesses, which have been reeling during the pandemic due to restrictions and mitigation efforts.
Mr Mnuchin said he returned $500bn with the hope Congress could use those funds for other Covid relief programs, saying they were not on track to be spent this year.
He repeatedly noted that lawmakers could alter the language in the existing law to require the Treasury secretary to spend all such funds by simply passing new legislative language.
Despite her complaints, Ms Waters never signaled an intention to seek such a formal change.
The hearing also underscored a difference between some Senate Republicans and their colleagues across the Capitol.
Democratic Senator Christopher Murphy on Tuesday said during a television interview that “half” of that chamber’s GOP members he had just spoken to on the floor are opposed to passing any additional coronavirus relief legislation.
Congresswoman Ann Wagner, a Missouri Republican, a day later urged her colleagues to pass “targeted relief” immediately.
Small businesses, schools and “our hardest hit industries,” she said, “cannot afford to wait any longer.”
“We must stop playing partisan politics,” Ms Wagner said, warning some hospitals in her state are worried “they might not survive.”