Thread by @BharatRamamurti

The Oversight Commission has just released its third report. In it, we make a number of key findings to help Congress as it considers new Covid legislation, and question some recent Fed and Treasury actions.

The full report is here: 1/

toomey.senate.gov/files/document…

The Fed's Main Street program is still not really doing much. It's supported a single $12M loan.

And as the Commission finds, it's also not designed to help smaller companies "facing serious declines in revenue that cannot take on additional debt to address that problem." 2/

Also on the Main Street program: "it's clear to the Commission that [Treasury and the Fed] are not going to impose mandatory payroll requirements on businesses..unless Congress mandates it in new legislation." Right now, they're not requiring or monitoring anything on payroll. 3/

On the Municipal Liquidity Facility: “As the Treasury and the Fed have made clear, the MLF is intended to help state and local governments with temporary cash flow needs and not longer-term financing problems that might arise from the impact of COVID-19 on the economy.” 4/

In other words, the Fed’s state and local lending program is not a substitute for direct financial support from the federal government to address the long-term consequences of COVID on state and local budgets. 5/

The Commission also expressed some skepticism about the Fed’s continuing corporate bond purchases: 6/

Treasury also provided a large loan to a company called YRC, claiming YRC was critical to national security. The Commission thinks the basis for that loan is shaky and will be following up with more questions for the Administration: 7/

A final note: 115 days after the passage of the CARES Act, the Commission still does not have a Chair.

Nevertheless, we plan on holding our first hearing -- which will focus on the Main Street program -- in the coming days.