Much Of $500 Billion Fund Created By Cares Act Hasn’t Been Disbursed Yet

( The Cares Act has done a lot of good for families and small businesses throughout America thus far.
On Monday, though, the Congressional Oversight Commission found that one of the funds created under the multi-trillion-dollar program has hardly dispersed any money yet.
One fund created through the bill totaled $500 billion and was meant to help local governments and businesses that have asked for urgent help. So far, the Treasury Department has spent not much at all of those funds. The fund was created to help larger corporations, small- and mid-sized businesses, cities, states and the hard-hit airline industry.
Senators on both sides of the aisle don’t seem to happy with this Congressional Oversight Commission revelation, and the expectation is they will press Treasury Secretary Steven Mnuchin as well as Federal Reserve Chairman Jerome Powell about it during a hearing that is planned to be held Tuesday.
As Republican Senator Patrick Toomey from Pennsylvania said:
“If it doesn’t get out in a timely fashion, it’s not going to achieve the goal behind its creation.”
The Congressional Oversight Commission — which was also created through the bill to see how the money in this fund was being used — found only one of the lending facilities the Treasury Department created to operate through the Federal Reserve has received funding so far. That group is the Secondary Market Corporate Credit Facility, which is supposed to purchase corporate debt, which received $37.5 billion.
As part of this overall $500 billion fund, $46 billion was set aside by the Treasury Department for loans and loan guarantees designed specifically for the airline industry. Thus far, none of those funds have been disbursed.
The Secondary Market Corporate Credit Facility is one of five that were created to disburse portions of the fund. The most noteworthy is the Main Street Lending Program, which handles funds given out to small- and medium-sized businesses.
Other issues with this portion of the Cares Act, according to the commission report, is the constantly changing terms of the program. For example, the Main Street program changed the terms before it even lent out any money.
Among these changes are an increase to the size of the loans, changes to language that once required companies to attest they need the funding “due to the exigent circumstances presented by the coronavirus pandemic, and changing a requirement that companies needed to make “reasonable efforts” to maintain payroll and keep employees to only requiring them to make “commercially reasonable efforts” to do those things.
Democrats are expected to press Powell especially on Tuesday about not only why the Fed hasn’t launched the Main Street Lending Facility, but also why the program was altered to help companies with as many as 15,000 employees. Some are seeing this move as one that will help oil and gas firms.
For their part, Mnuchin and Powell said they’re working hard to get the programs running as fast as can be, but there’s just so much to do with all the funds and programs created by the Cares Act.