November 20, 2020

In an op-ed published by The New York Times, Partner Neil M. Barofsky discusses Treasury Secretary Steven Mnuchin’s decision to terminate the emergency-lending programs, part of the CARES Act, that have helped keep companies and municipalities afloat during the pandemic. Mr. Mnuchin had an option to extend these programs, but instead is allowing them to expire on December 31, citing an improved economy. Mr. Barofsky writes that it seems the decision was intended to limit the incoming Biden administration’s options to manage the crisis, and was a significant departure from the precedent set by the Bush administration during the Great Recession. “The Treasury should reverse this reckless course and follow the precedent set with TARP by extending these programs to give the newly elected administration as much flexibility as possible,” Mr. Barofsky says. He adds that this would give the Biden administration the option of extending the reach of the programs as well. “Given the stakes of the pandemic and its impact on the economy, the Biden administration deserves to make its own policy decisions on how best to use the CARES Act funds to stabilize the economy and support a recovery,” Mr. Barofsky writes.

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