Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell in background have disagreed on whether emergency lending programs should be extended

Washington (AFP) - US Treasury Secretary Steven Mnuchin on Friday defended a decision to not continue a series of emergency lending programs after the Federal Reserve called for the initiatives to be extended.

Mnuchin, appearing on CNBC, said Congress was “very clear” in its intent about the programs, calling for them to expire in December.

The programs were enacted in the spring to boost liquidity amid turmoil in financial markets.

But financial conditions today are “in great shape,” Mnuchin said. “When the emergency is over, let’s put them away.”

On Thursday, Mnuchin notified Fed Chair Jerome Powell that programs targeting the corporate credit market, municipal lending and small and medium-enterprises through the Main Street Lending Program would not last beyond the end of 2020.

Mnuchin requested that the Fed return $455 billion in unused funds allocated for the program.

Minutes after Mnuchin’s announcement, the Fed on Thursday night sent out its own statement, saying it “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”

On Friday, Mnuchin called for the funds to be redeployed to small businesses and other parties that have suffered a devastating blow from the coronavirus.

“We need Congress to reappropriate these funds, we could do a $500 billion fiscal response immediately that won’t cost taxpayers any more money,” Mnuchin told CNBC.

Mnuchin brushed aside a question on whether the move was an attempt to tie the hands of the incoming administration led by President-elect Joe Biden.

Mnuchin’s boss, President Donald Trump, has not conceded the election and is pushing state officials to overrule the will of voters after his numerous attempts to claim voting irregularities were dismissed by courts or withdrawn by his attorneys.

“This is not a political issue,” Mnuchin said. “This is very simple, and really that the story is, let’s go reappropriate $500 billion.”