IN A year full of turmoil and trouble — medical, political and economic — a bright spot has been the relatively functional relationship between the Treasury Department under Secretary Steven Mnuchin and the Federal Reserve under Chair Jerome H. Powell. Unfortunately, Mr. Mnuchin has just chosen to break with Mr. Powell on a major policy matter. And he has taken this risk at a delicate moment in which his boss, President Trump, is sowing chaos over his election defeat, while obstructing a smooth transition to his successor — and, ultimately, Mr. Mnuchin’s.

At issue is Treasury funding for various credit-support programs the Fed launched under the Cares Act, adopted by overwhelming bipartisan consensus on March 27. Contrary to Mr. Powell’s publicly expressed wishes, Mr. Mnuchin says that the programs must cease new operations on Dec. 31, and unused funds, to the tune of roughly $450 billion, revert to the Treasury for reprogramming by Congress. The secretary offers two reasons: The Cares Act set a year-end sunset; and actual usage of the program has been minimal — only $25 billion in actual lending — so it is already overcapitalized.

On the legal point, Mr. Mnuchin’s is a plausible interpretation, though hardly the only one possible. What is clear, though, is that his position suits Senate Republicans who have been lobbying the secretary to shut down the Fed programs lest they survive into a Democratic administration, where, Sen. Patrick J. Toomey (R-Pa.) has said, they “could be very, very badly misused.” A more cautious, less partisan view would be that the Fed’s programs should remain as an insurance policy against problems that very well might occur this winter due to a surging coronavirus.

Erring on the side of insurance is also the best answer to Mr. Mnuchin’s argument — albeit accurate — that there has been so little use of the programs so far. In fact, the smooth functioning of markets reflects investor confidence that the Fed was standing by with a huge arsenal of financial firepower. That confidence may now weaken. We might add that the limited use of the Fed’s Main Street program for nonfinancial companies was due in part to restrictions Mr. Mnuchin himself advocated. Yes, there are other sources of capital, not linked to the Cares Act, for the next administration to draw upon, as Mr. Mnuchin noted. Again, though, the question is: Why limit the next administration’s options, given how hard it will be to get a request for new funding through Congress next year?

Defending his decision, Mr. Mnuchin made the valid point that what U.S. workers and businesses — especially those in the hard-hit restaurant, hospitality and travel industries — may need most is direct government aid as opposed to loans, Fed-backed or otherwise. Returning money to the Treasury, in theory, provides a source for such grants, which could be authorized in a new economic support bill during the lame-duck session. This is what Mr. Mnuchin, and the Senate Republicans who urged him to end the Fed programs, say they want. The Treasury secretary’s latest action puts a heavy burden on him and the GOP to make that happen.

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