“Committing” money and actually turning the funds over are two very different things.
By Pam Martens and Russ Martens of Wall Street on Parade.
On November 27, Wall Street On Parade reported that U.S. Treasury Secretary Steve Mnuchin had failed to turn over to the Federal Reserve 75 percent of the $454 billion that Congress had earmarked in the CARES Act for the Fed’s emergency lending programs. We wrote at the time:
“…for months now, the Federal Reserve’s weekly financial statements known as the H.4.1 have indicated that all the Fed received from Treasury for its emergency lending facilities was $114 billion, leaving $340 billion unaccounted for.”
We also took the time to send an email to the Federal Reserve’s press office to confirm that the Fed had received only the $114 billion from the Treasury for its emergency lending programs. They directed us to Fed public documents confirming this.
Now the Congressional Research Service (CRS), a century old nonpartisan agency that provides legal analysis to Congress, has confirmed what Wall Street On Parade reported more than three weeks ago. In a December 17 letter to the House Select Subcommittee on the Coronavirus Crisis, the CRS wrote the following:
“Section 4003(b)(4) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act authorizes the Treasury Secretary to invest up to $454 billion in emergency-lending programs established by the Federal Reserve (the Fed). To date, the Treasury Secretary has committed $195 billion to such programs, and appears to have transferred $114 billion of that amount as of December 9, 2020.”
“Committing” money and actually turning the funds over to the Fed are very different things. For example, the Term Sheet for the Municipal Liquidity Facility indicates that the Treasury had committed $35 billion to that emergency lending facility. But the Fed’s H.4.1 that was released on December 17 shows that the Fed had only received half of that amount, $17.5 billion. The same thing occurred with the Fed’s Primary and Secondary Market Corporate Credit Facilities. The term sheet indicated that the Treasury would be providing a total of $75 billion combined to the two facilities. But the Fed’s H.4.1 has indicated for months that all it received from Treasury was exactly half that amount for the two facilities, $37.5 billion. (See footnote 14 to Table 1 of the H.4.1.)
Mnuchin was able to delude the public with the idea that the Fed has just been sitting on over $400 billion of Treasury’s money, so it was time for Mnuchin to claw it back and kill the programs, because that information was inaccurately reported by mainstream media…