Most of $500B Treasury fund for coronavirus relief hasn't been distributed, oversight commission finds

The Treasury Fund set aside $46B for loans and loan guarantees to the airline industry

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A $500 billion Treasury Department fund created at the end of March by the CARES Act has yet to deploy much of the coronavirus-relief aid, according to a new report released Monday by a bipartisan Congressional Oversight Committee.

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The 17-page report is the first from the congressional watchdog panel, which was established in the massive $2.2 trillion stimulus package to oversee the distribution of loans by the Federal Reserve and Treasury Department.

The Treasury Fund set aside $46 billion for loans and loan guarantees to the airline industry. None of that money has been distributed, although the Treasury has received applications for the loans and is reviewing them. Up to $25 billion is available for passenger airlines and businesses certified to perform inspection, repair, replace, or overhaul services and ticket agents.

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Another $4 billion is available for cargo air carriers, and $17 billion is available for businesses “critical to maintaining national security.”

The remainder of the fund -- $454 billion -- was designated to support Federal Reserve lending programs to businesses, states and municipalities.

But only one of the lending facilities established by the Fed has received money, according to the report. The Treasury has disbursed $37.5 billion of the funds to the Fed's Secondary Market Corporate Credit Facility, which is supposed to purchase corporate debt.

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The Treasury Department has announced five lending facilities to deploy other portions of the money, but has not invested in them yet. That includes the Main Street Lending Program, which the central bank launched to help get money to small- and medium-sized businesses, and the Primary Market Corporate Credit Facility, designed to maintain the flow of credit to large employers.

"Their size and scope may also grow as the Treasury has only pledged $185 billion of the $454 billion appropriated in the CARES Act for investments in Fed lending facilities," the report said.

The commission has four members: Rep. Donna Shalala, D-Fla., Sen. Patrick Toomey, R-Penn., Rep. French Hill, R-Ark., and Bharat Ramamurti, a former adviser to Sen. Elizabeth Warren, D-Mass. The fifth member is supposed to be the chairperson, jointly appointed by House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell, but they have yet to announce any agreement.

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