By Isaac Cohen*
Now that the transition to the new administration has officially started, perhaps politicians from both parties can agree on a new relief package, which they were unable to approve before the election. As we approach winter, the pandemic is entering into a second wave, the economy is slowing down and the benefits approved from a previous relief package expire by the end of the year.
It was almost incredible how politicians were unable to agree on a relief package before the election, when they were seeking the approval of voters. President Donald Trump was fully aware because he signed the relief checks sent to individuals and families. But the distance between the Senate and the House proposed amounts was too wide and the President hesitated.
However, there still may be an opportunity. Treasury Secretary Steven Mnuchin has asked the Federal Reserve to return funds that were authorized in the previous relief package to create several credit facilities, to finance state and municipal lending and credit for corporations, businesses, and asset backed purchases. Not much lending was done by these facilities, but their availability contributed to increase confidence and they are set to expire by the end of the year. Therefore, the Treasury Secretary has asked the Federal Reserve to return $455 billion in unused funds, which Congress can allocate to other activities, such as shortening the distance between the amounts for a new relief package which was under negotiation between the Treasury, the House of Representatives and the Senate.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, TELEMUNDO, UNIVISION and other media.