Democrats Criticize $500b in Relief Bill for Exchange Stabilization Fund Calling it Corporation ‘Slush Fund’

Democrats have taken exception to language in the Senate version of the relief bill and specifically, $500b that has been earmarked to add to the Exchange Stabilization Fund. That fund is overseen by Treasury Secretary Steven Mnuchin and at the end of February, it held $93.7b.

By providing funds from the ESF, the Treasury is agreeing to cover losses on the Fed’s emergency lending. If there are losses, the taxpayers are on the hook. During the 2008 financial crisis, the Fed experienced no losses on individual loans made under its emergency programs. In fact, the Fed earned an estimated $20 billion in interest and fees on the loans and remitted those profits to the Treasury.

This didn’t stop Democrats like AOC from criticizing the measure by saying that, “it seems to give a *HALF TRILLION DOLLARS* away to big corporations, w/ few worker protections.”

The developments of this Senate relief bill are concerning.

We are hearing lots of vague statements, but not a single member of Congress has seen actual bill text.

It seems to give a *HALF TRILLION DOLLARS* away to big corporations, w/ few worker protections.

Half a trillion.

— Alexandria Ocasio-Cortez (@AOC) March 24, 2020

Senator Mazie Hirono from Hawaii questioned, “We’re gonna give $500 billion in basically a slush fund to help industries controlled by Mnuchin with very little transparency? Is that what we ought to be doing?”

Failed Democratic Presidential candidate and Senator Elizabeth Warren cried, “We’re not here to create a slush fund for Donald Trump and his family, or a slush fund for the Treasury Department to be able to hand out to their friends. We’re here to help workers, we’re here to help hospitals. And right now, what the Republicans proposed does neither of those.”

Mnuchin denied the claim by saying, “It’s not a slush fund; it’s a mechanism that we can use working with the Federal Reserve that will provide another $4 trillion of potential liquidity into the market. That’s on top of the Fed’s balance sheet.”

It seems Nancy Pelosi and the Democrats would rather give money to people with little possibility of a return in an effort to buy votes, rather than making sure that we have a sustainable economy that can come back from the current crisis we find ourselves in.