Treasury Slow to Hand Out Billions in Virus Relief Money, Panel Finds

None of the $46 billion set aside for specific industries has gone out the door yet, according to an oversight commission.

Treasury Secretary Steven Mnuchin wears a mask as he walks on the grounds of the White House last week. (AP Photo/Alex Brandon)

WASHINGTON (CN) — A congressional panel overseeing a $500 billion economic relief fund said Monday the Treasury Department has not doled out any of the money set aside to help airlines and certain other industries ride out the coronavirus pandemic.

The fund was created as part of the $2.2 trillion CARES Act and is meant to help businesses and state and local governments during the economic downturn brought on by state-mandated closures used to slow the spread of the virus.

The Treasury Department can use the money in the relief fund to give out loans, loan guarantees and other financial relief to businesses and state and local governments, and $46 billion is specifically set aside for certain industries.

Of that total, $25 billion in relief can go to passenger airlines, with another $4 billion set aside for cargo air carriers. Another $17 billion can go to businesses that are designated as “critical to maintaining national security.”

None of that money has gone out the door yet, according to Monday’s report. Airlines had until April 17 to apply for loans, while businesses critical to national security faced a May 1 deadline. The Treasury Department is currently evaluating applications it has received for the funds, according to the report.

All told, the Treasury Department has obligated $37.5 billion from the fund, all of which went to a lending facility that allows the Federal Reserve to purchase outstanding corporate bonds. The report also details several other lending facilities the administration has already said will receive CARES Act money.

The 17-page report is the first the newly created Congressional Oversight Commission has released detailing the Trump administration’s handling of the relief fund.

The bulk of the initial report is a list of 52 questions about how the Treasury Department and Federal Reserve will administer the program, including how the agencies will measure success, how they reached certain decisions and how they expect their lending decisions to impact employment in the United States.

The Treasury Department did not return a request for comment on the report.

The commission is one of three oversight bodies created in the CARES Act and must submit monthly reports to Congress on how the $500 billion relief fund is being distributed. Four of its members are appointed by each of the party leadership teams in the House and Senate, while the chair is to be appointed by the House and Senate majority leaders.

The panel currently has four members — Senator Pat Toomey, R-Pa., Representatives Donna Shalala, D-Fla., and French Hill, R-Ark., and Bharat Ramamurti, a former adviser to Senator Elizabeth Warren, D-Mass. Even with the first report out Monday, the commission still does not have an appointed chairperson.

Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell are scheduled to testify before the Senate Banking Committee on Tuesday about the CARES Act funding. 

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