Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response... (EventID=111102)

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Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/FinancialDems/ Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Thursday, September 22, 2020, from 10:30 a.m. (ET) full Committee Chairwoman Waters and Ranking Member McHenry will host a hybrid hearing entitled, “Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response." - - - - - - - - Witnesses for this one-panel hearing will be: • The Honorable Steven Mnuchin, Secretary, U.S. Department of the Treasury • The Honorable Jerome Powell, Chair, Board of Governors of the Federal Reserve System Overview The Coronavirus Disease 2019 (COVID-19) pandemic has had profound health, economic, and financial impacts globally and in the United States. According to the Centers for Disease Control and Prevention (CDC), there have been more than 12.4 million cases and 259,000 deaths in the United States as of November 25. The economic impact of COVID-19 has been profound, resulting in the highest recorded monthly unemployment rate – 14.7% in April 2020 – since the Great Depression. Economic conditions have improved since the second quarter, but the economy remains in recession. The unemployment rate declined to 6.9% in October, but remained 3.4 percentage points higher than prepandemic levels with long-term unemployment numbers rising. In response, Congress has enacted a series of laws, including the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law on March 27, 2020. The CARES Act directs the U.S. Department of the Treasury (Treasury) and the Board of Governors of the Federal Reserve System (Federal Reserve or Fed) to take a series of actions to assist those affected by the economic impacts of the pandemic, including consumers, businesses, non-profits, states, territories, and municipalities. The law established ongoing streams of reporting to Congress related to the activities of the Treasury and the Fed under the CARES Act including: bimonthly reporting by GAO, ongoing oversight and monthly reports by the Congressional Oversight Commission, and quarterly reports by the Special Inspector General for Pandemic Recovery (SIGPR). The law also requires the Treasury Secretary and Federal Reserve Chair to testify quarterly before the Committee. This is the Committee’s third hearing fulfilling this statutory requirement. Emergency Relief for Businesses, Nonprofits, States, Territories, & Municipalities Congress appropriated $500 billion to the Treasury’s Economic Stabilization Fund to provide loans, loan guarantees or other investments, either directly, or through programs and facilities administered by the Federal Reserve, to eligible businesses, nonprofits, states, territories, and municipalities as provided under Title IV of the CARES Act. Treasury Emergency Lending Programs for Certain Industries: Of the $500 billion, Treasury can make up to $25 billion available to passenger airlines, up to $4 billion to cargo airlines, and up to $17 billion to businesses critical to maintaining national security. Treasury can make the remainder—$454 billion plus any unused funds initially allocated to assist the specified industries—available to support Federal Reserve lending facilities. These facilities will terminate on December 31, 2020 but can be extended by the concurrence of the Treasury Secretary and the Federal Reserve Board. Recipients are legally required to repay assistance with interest. As of November 13, Treasury has announced 11 Title IV (Subtitle A) loans to various companies totaling nearly $736 million on the basis that the companies are critical to national security and 24 loans to passenger and cargo airlines totaling over $22 billion. Separate from the $500 billion, Title IV (Subtitle B) of the CARES Act also provides up to $32 billion to continue payment of employee wages, salaries, and benefits at airline-related industries. As of November 9, Treasury has approved over $28.2 billion to 610 applicants, with nearly $25 billion in anticipated support to 352 passenger air carriers, $826 million to 39 cargo companies, and $2.4 billion to 220 contractor companies. Federal Reserve Emergency Lending Programs and Facilities: The Fed has created nine temporary emergency programs and facilities using authorities under Section 13(3) of the Federal Reserve Act in response to COVID-19. Many are backed by Treasury’s Exchange Stabilization Fund (ESF), including at least $454 billion provided through the CARES Act, in the event of losses. Seven of these programs are backed by ESF funds: Commercial Paper Funding Facility (CPFF); Main Street Lending Program (MSLP); Money Market Fund Liquidity Facility (MMLF)... Hearing page: https://democrats-financialservices.house.gov/calendar/eventsingle.aspx?EventID=407031