From Mnuchin to MTA: Just borrow a way out of the financial impact of COVID-19

MTA leaders and Treasury Secretary Steven Mnuchin are not about the financial crisis of government agencies, but about how to recover from the dire situation caused by COVID-19.

On November 20, Mnuchin joined CNBC’s “Squawkon the Street” as a guest, working with Jim Cramer on the feasibility of another stimulus bill and which agencies such as the MTA have sought a $ 12 billion grant. We talked about how it would be useful. The federal government will fund their activities until the end of 2021.

Thomas Dinapoli, MTA leader and state auditor, said that not only has credit ratings been downgraded since the pandemic, but more borrowing would result in $ 50 billion worth of debt by 2024. I proved it. Get ready to survive the financial crisis.

“Of course, the MTA has real revenue issues, and as you know, the MTA wants to get a subsidy from the government. They really don’t want more debt,” Mnuchin said. “But the MTA can borrow in the market, borrow some money from the facility, and borrow money outside the facility. The market is open to them. Again, when that matters. But, again, there’s a big difference between grants and loans, and how economic sectors, like the MTA, are currently hit hard to move forward. You need to work with the state and federal governments to get a grant to. “

The MTA already includes a $ 2.9 billion municipal facility loan plan in its 2021 financial plan, but agency Chairman Pat Foye said much of the money needed would avoid significant service cuts. I explained that it was also designed. Not only buses, but 50% of commuting routes.

“I’m glad that Mnuchin acknowledged that the MTA has serious and serious revenue problems, was pandemic-beaten, and that we are the economic lifeline of New York and the country,” Foy said. It was. “The MTA needs $ 12 billion in federal bailouts to avoid the significant cuts we’re talking about. This will devastate our customers and hurt our economy. The crisis begins. Since then, we’ve made it clear. We can’t borrow or circumvent it. We need federal bailouts and can’t afford to wait any longer. “

Mnuchin’s comments will affect the MTA as the board plans to vote for the 2021 financial plan at its December meeting. This is a proposal for the worst scenario, and authorities are hoping that the Biden Harris administration will be able to fund it.

Since the CARES Act in April, the hurdle remains to be stimulated on the US Senate floor under the guidance of Mitch McConnell, the leader of the majority who refused to pass the COVID-19 bailout bill.