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Mnuchin Cites Principles in Clawing Back Fed Money. Democrats See Politics. – The New York Times

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WASHINGTON — Treasury Secretary Steven Mnuchin broke sharply with the Federal Reserve this week, choosing to end a variety of programs aimed at helping markets, businesses and municipalities weather the pandemic and asking the central bank to return the funds earmarked to support those efforts.

Mr. Mnuchin said his decision was driven by a deference to what he believed was Congress’s intent when it allocated the funding, a desire to repurpose the money toward better uses and a belief that markets no longer needed them. But his actions, which will limit the incoming Biden administration’s ability to use those programs at scale, seem driven by politics.

“The law is very clear,” Mr. Mnuchin said in an interview on CNBC Friday. He defended his decision and suggested that the programs were no longer needed, because market conditions “are in great shape.”

But that view is not shared by the Fed, which quickly issued a statement expressing disappointment with the decision, calling the economy “still-strained and vulnerable.” It is worth noting that Mr. Mnuchin only publicly took the position that Congress meant for the programs to end after Dec. 31 once it became clear that President Trump had lost the election to Joseph R. Biden Jr.

By ending the programs — which have been funneling loans to medium-sized businesses and backstopping municipal and corporate bond markets — Mr. Mnuchin is taking away a source of economic support just as the new administration comes into office and as rising virus cases dog the recovery. By asking the Fed to return the money that enables the emergency efforts, he could make it harder for Democrats to restart them at a large scale and on more generous terms.

Chair Jerome H. Powell indicated the Fed would return the funds, in a letter to Mr. Mnuchin on Friday afternoon.

“It’s not just closing the store down for Biden,” said Ernie Tedeschi, a policy economist at Evercore ISI. “It’s burning the store down.”

Mr. Biden’s transition team criticized the move as trying to hamstring his ability to help the economy.

“The Treasury Department’s attempt to prematurely end support that could be used for small businesses across the country when they are facing the prospect of new shutdowns is deeply irresponsible,” Kate Bedingfield, a spokeswoman for the transition, said in a statement.

Mr. Mnuchin’s decision came as a surprise to Mr. Trump, who was alerted to the decision shortly before Mr. Mnuchin’s letter was released on Thursday and who, on Friday morning, expressed some concern that the move could have a negative impact on the stock market, according to a person familiar with the matter who was not authorized to speak publicly. Asked if Mr. Trump had instructed Mr. Mnuchin to end the programs, Mr. Mnuchin’s spokeswoman said that it was “solely a Treasury decision based on what the law and congressional intent required.”

Here is a rundown of how these programs work, why Mr. Mnuchin says he is killing them, and why his arguments leave unanswered questions.

Mr. Mnuchin is pulling the plug on a set of Fed emergency lending programs, which the central bank can use to keep credit flowing in times of crisis. After the 2008 recession, Congress insisted that the Treasury secretary sign off on such efforts.

The Fed is loath to take credit losses, so Treasury has been providing a layer of money to cover any loans or purchases that go bad. It initially used the Exchange Stabilization Fund, a pot of unused money. But in March, Congress beefed up the Treasury’s capacity.

Mr. Mnuchin and lawmakers earmarked $454 billion to support Fed lending when they cut a deal on a government pandemic response package. The Fed can make money out of thin air, and it only needs a little bit of backing — $1 of insurance can be turned into as much as $10 in bond buying or business loans. The programs offered a big potential bang for the government’s buck.

Mr. Mnuchin ultimately earmarked $195 billion for specific loan programs. Not much of that capacity has been used. Some programs calmed market conditions merely by reassuring investors. The small and medium-sized business loan program had restrictive terms.

When Mr. Mnuchin said Thursday that he would end the five appropriation-backed programs at the end of 2020, he asked the Fed to give back all but $25 billion, which he is leaving to support already-made loans and bond purchases.

Mr. Mnuchin has said “it is very clear in the law” that the allocation-backed programs must end Dec. 31. That is not true.

The law states that the Treasury should not hand out money from its $454 billion pot after the end of 2020 — but it allows already-dedicated funds to remain available. Because the Treasury had handed hundreds of billions of dollars in insurance money to the Fed, the central bank theoretically has lots of capacity left to make loans and buy bonds.

The Fed’s lawyers have interpreted the law to mean that they can keep the programs running into 2021, supported by the existing Treasury backstop, as the central bank’s statement on Thursday indicated.

Mr. Mnuchin himself had previously suggested that the programs could be extended past the end of the year, writing in an October letter that the decision would hinge on market conditions.

A Treasury spokeswoman said on Friday that Mr. Mnuchin had always believed Congress meant for the funding to sunset, and had planned to use Exchange Stabilization Fund money — plus the $25 billion that he is leaving with the Fed to cover existing loans — to extend the programs if needed.

That logic is hard to follow given Mr. Mnuchin’s belief that the law prevents new Fed lending backed by Congress’s money after Dec. 31. If that’s the case, it should also prevent new lending against the $25 billion, which comes from the same congressional pot, said Peter Conti-Brown, a lawyer and Fed historian at the University of Pennsylvania.

Mr. Mnuchin also suggested that taking back the earmarked money would allow Congress to reroute it to other purposes in ways that “won’t cost taxpayers any more money.”

But the Congressional Budget Office, in assessing the budget impact of the money dedicated to Fed programs, found it to be nearly free of cost. The idea was that the loans the money backed would eventually be returned, and fees and interest earnings would cover any expenses. So if the money is clawed back and repurposed for spending — not lending — it would add toward the deficit for accounting purposes.

Top Republicans have suggested that leaving the programs operational for too long could distort markets, which is a genuine concern with such backstops. In his letter announcing his intent to close the programs, Mr. Mnuchin noted that normal market conditions prevail.

It’s true that corporate bond issuance has been rapid and states and localities are able to fund themselves at low rates. But virus cases are also spiking, suggesting that conditions could worsen and Fed backstops might again be needed.

Over the summer, Mr. Mnuchin agreed to extend the programs until Dec. 31 at a time when coronavirus infections were much lower than they are today, markets were functioning well, and companies were issuing bonds at breakneck speed.

Treasury’s move to claw back the funding limits Mr. Biden. The Fed and the next Treasury secretary can use the Exchange Stabilization Fund to back up bond purchases and business lending.

But it contains much less money than the government would have had with the congressional appropriation. That could hamper a goal that had been percolating among Democrats: to restart the programs, make them more generous and use them as a backup option if additional stimulus was tough to get through Congress.

Senator Mitch McConnell of Kentucky, the majority leader, said the request to end the programs and return the money was “fully aligned with the letter of the law and the intent of the Congress.”

Democrats reacted with outrage.

“It is clear that Trump and Mnuchin are willing to spitefully destroy the economy and make it as difficult as possible for the incoming Biden Administration to turn this crisis around and lead the nation to a recovery,” Representative Maxine Waters of California said in a letter.

Jim Tankersley contributed reporting.

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Paul Quassa quits Nunavut legislature after 40 years in politics – CBC.ca

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Nunavut Speaker Paul Quassa has resigned from his role as MLA for Aggu.

The news was first reported by Nunatsiaq News. Quassa confirmed his resignation to the CBC and said he is done with politics. He said he’s been thinking about the decision since the spring.

“I really cherish the time that I spent [in] my life here at the Legislative Assembly,” Quassa said.

“I knew that I could do at least two terms. And once … that term is up, I think it’s high time that we see somebody else there. And I have great confidence in in the next person that’s going to be elected.”

Quassa was elected as the Nunavut premier in 2017, but was ousted in 2018, though he continued in his role as MLA for Aggu. 

He said he stayed on because he made a commitment to represent his community.

“No matter what happens, you just continue, keep going because you were elected … you’re representing your community. You cannot just stop there just because the other MLAs don’t agree with you,” he said. 

His resignation, which will be effective as of Aug. 13, comes just shy of the end of his term, with Nunavut’s general upcoming election scheduled for Oct. 25.

Quassa says he wants young people to come forward to run for leadership positions in Nunavut. (CBC)

Quassa said he wanted to give others the chance to be in leadership, and in particular, he encouraged young people to step forward and consider the opportunity of running for MLA.

“I thought this would be the right timing after talking with my family and my constituents, that it would be only right for me to step down and give other opportunities,” he said. 

“I believe that our young people should really go for it, because again, we have to remember that at least 60 per cent of our population is under 25. So, you know, that’s a big population to represent. And I think it is high time that we start getting new ideas, new challenges, and then young people can make that difference.”

Though he didn’t say specifically what he plans to do next, Quassa hinted it might be something in the public sphere.

“I’m looking forward to do something else where I can speak my mind on behalf of Inuit and Nunavut,” he said.

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N.W.T. Métis activist remembered as unfiltered politician, caring friend – CBC.ca

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A leading figure in the Northwest Territories Métis community has died.

Clem Paul passed away on July 30. He was 64.

During his entire adult life, Paul was a champion of Métis rights in the Northwest Territories, specifically in the North Slave region. He is a former president of the old Yellowknife Métis Council and one of the founding leaders and a former president of the North Slave Métis Alliance, which was formed when three Métis groups in the North Slave region merged.

Trevor Teed was a friend of Paul’s since they were Grade 1 students in Yellowknife.

“Quite often in life you’ll hear somebody say in times of trouble, ‘I sure wish I had a friend to lean on’ or ‘I sure wish I had a shoulder to cry on’ — something like that,” said Teed. “That’s an experience I have never felt … because I always had a friend, Clem. He was always there for me.”

In 1991 Paul was awarded the Governor General’s medal of bravery for hauling Teed out of the frigid waters of Harding Lake. Teed and another man, who perished in the accident, had gone through the ice on their snowmobile. Paul used his gun case to paddle his sled out across 30 meters of open water, pulled Teed in, and paddled back to solid ice.

Teed said Paul was someone who spoke his mind, regardless of the effect his words had on those they were directed at.

“Clem was involved in politics but he wasn’t really a politician because he was point blank,” said Teed. “He often told people things they did not want to hear. If you were working with Clem on a project he was engaged in and weren’t putting in the effort he thought was warranted, he’d let you know about it.”

Taking time for strangers

Paul’s softer side was evident one of the first times I met him. On a paddling trip about 20 years ago, I stopped into an area on Great Slave Lake known as Old Fort Rae or Mountain Island, once a thriving community. My paddling partner and I were surprised to find a group of men building cabins there in the sweltering August heat.

They were led by Paul. He stopped his work and explained to us that they were revitalizing the community to re-establish it as a base for Métis in the region. Paul then told us about the history of the place, how it was an ideal location for a settlement because you could dock on either side of the peninsula, depending on which way the wind was blowing. 

Paul spent the next hour giving us a tour of the remnants of the community and talking about the history of Métis in the area. He showed us where those who lived in the community were buried and talked about his plans for the place. He was obviously very busy, but took the time to show around two strangers.

Youngest certified journeyman welder in N.W.T.

Alongside his political activities, Paul initiated several high-profile court cases aimed at asserting and protecting Métis rights in the region, but his sister, Kathy Paul-Drover, said he was also very much a working man.

When he was 18, she said, he became the youngest person in the N.W.T. to be certified as a journeyman welder. He helped found Paul Brothers Welding, a longstanding Yellowknife business.

Paul-Drover said her brother got his work ethic and strong-willed nature from their mother, the late Theresa Paul.

One of Clem’s first political experiences was seeing his mother fight off an attempt by the City of Yellowknife to evict their family and others in a small Métis community that had settled in the School Draw Avenue area. The attempt happened in the mid-60s, shortly after Yellowknife was named the capital of the N.W.T.

“We had a fairly big Métis community here in the School Draw and she was the only one that maintained title to her land,” said Paul-Drover of her mother.

A difficult year

Paul-Drover said the past year has been difficult for her brother. He had fought off an earlier bout of cancer, but it returned.

“He was in and out of hospital for months, and with all of the restrictions with COVID he wasn’t able to see his grandchildren or children,” said Paul-Drover. “That was very difficult for him. That’s why he and his wife decided he should go home from the hospital despite not being able to take food or water. He was home for two days and he passed.”

A service will be held at the Yellowknife River on Thursday starting at 2 p.m. with a final viewing held shortly before. The gathering will then move to Lakeview Cemetery for the burial. Then it will return to the Yellowknife River for a celebration of life.

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How politics is tearing families apart | Cupp – Chicago Sun-Times

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The year was 2004, and a month after Barack Obama would make his national debut at the Democratic National Convention, another Democrat made news — at the Republican National Convention in New York City.

Georgia Democrat Zell Miller — a former governor who won with the help of longtime Democratic adviser James Carville, who had addressed the 1992 DNC waxing nostalgic for FDR, Truman, Kennedy and Carter, who endorsed Bill Clinton and opposed George H.W. Bush — was now standing at the podium at the Republican National Convention, about to endorse George W. Bush.

“Since I last stood in this spot, a whole new generation of the Miller family has been born,” he said. “They are my and Shirley’s most precious possessions.”

As he explained it, “My family is more important than my party.”

It was a powerful moment, and one that seems nearly impossible to imagine today, when bitter partisanship and party loyalty threatens to supersede our not only our commitment to our country, but to our families.

Nowhere is this corrosive effect more acute than inside right-wing politics, where loyalty to party and, more specifically, to Donald Trump, have managed to corrupt so many important democratic institutions — our elections, for one — but worse, institutions as fundamental as the family, what Pope John XXIII called “the first essential cell of human society.”

Under the presidency and post-presidency of Donald Trump, families have found themselves more divided, disaffected, even estranged, in some startling — and in some cases, very public — ways.

This weekend, three siblings of Arizona Rep. Paul Gosar penned a pointed op-ed at NBCnews.com slamming their brother for a history of political abominations, from birtherism to anti-Semitism, and from downplaying COVID-19 to inciting an insurrection at the U.S. Capitol. They got personal.

“Maybe your lifelong, insecure need for the approval of others caused you to sacrifice your common decency and integrity to satisfy Trump and his followers in order to keep your seat,” they wrote.

They’ve long been publicly critical of their brother, even pushing for his expulsion from Congress.

Gosar has previously responded to their laments without much affection, telling CNN in 2018, “These disgruntled Hillary supporters are related by blood to me but like leftists everywhere, they put political ideology before family. Lenin, Mao and Kim Jung Un (sic) would be proud.”

The Gosars are hardly alone.

The Conways, matriarch and former Trump adviser Kellyanne, patriarch and Never-Trumper George, and teenage anti-Trump activist and “American Idol” contestant Claudia have been embroiled in a very public, hard-to-watch family conflict for the past two years. Recently Claudia has said her relationship with her parents has improved, thankfully.

Planning for the Gaetz-Luckey wedding might be difficult, as the future sister-in-law of Florida Rep. Matt Gaetz has taken to social media to slam his “weird and creepy” behavior with women in the wake of allegations of sex crimes. Gaetz’s fiancée has clapped back, “My estranged sister is mentally unwell.”

What once might have been kept behind closed doors is now being aired out for all to see, perhaps even in the hopes that public shaming will have some kind of behavior-changing effect.

But more tragic than these public figures’ public spats are the stories of average American families devastated by politics, conspiracy theories, and extremism. They’re not hard to find.

One NPR report recounts a sub-Reddit group called “Q Casualties,” made up of users who could no longer communicate with their QAnon family members — people like “Tyler,” who was despondent when he learned his dad had gone to the Capitol on Jan. 6 with loaded guns in his camper.

In another story, a woman going by “Caroline” told an Iowa news outlet that she was “married to a QAnon believer and lived in fear.” “QAnon has destroyed my life,” she said. “I live with someone who hates me.”

There’s the story of Rosanne Boyland, whose family was worried by her increasingly conspiratorial political ideas. She was one of five people who died at the Capitol insurrection, effectively giving her life for a false cause despite, according to her family, never even voting before 2020.

COVID-19 has brought another kind of political estrangement — over masking and vaxxing. There’s the story of two Chicago sisters whose mother stopped speaking to them after they defied her wishes not to get vaccinated.

There are countless more stories of families torn apart by politics in the last few years — by the politics of Trump, the cults of conspiracy groups like QAnon, the extremism of groups like the Proud Boys and The Oath Keepers, and the new politics of masks and vaccines.

What these destructive elements have done to divide our country and turn American against American is well-documented and horrific. But even worse is what it has done, and is still doing, to our families, isolating us further and further from the things that matter most. If we don’t correct this soon, we’re in for a very dark and lonely future.

S.E. Cupp is the host of “S.E. Cupp Unfiltered” on CNN.

Send letters to letters@suntimes.com.

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