Pandemic relief efforts by the Treasury and the Federal Reserve boosted the corporate bond market, but may be falling short in helping small business and state and local governments get access to loans, according to a report from a bipartisan congressional watchdog.

The Fed’s announcement in March that it would buy corporate bonds was enough to rally credit markets, with many large companies endangered by the pandemic finding enough cash in capital markets to cushion the blow.

Yet several of the lending facilities that are aimed to help smaller businesses aren’t fully in operation, a report released Thursday by the Congressional Oversight Commission found, and only one state has received a loan.

The panel said it’s an “open question” whether the central bank should continue using public funds to purchase some corporate bonds, and urged the Fed to instead do more for small businesses, states and cities.

“In some areas of the economy, such as the ability of larger companies to issue debt to continue operations, the agencies’ actions have had a clear and powerful impact,” the report says. “There is less evidence that the actions of the Treasury and the Federal Reserve have been as beneficial for small and mid-sized businesses and state and local governments.”

In all, the Treasury and Fed have tapped just $6.7 billion of the half-trillion dollar pandemic rescue package that Congress authorized them to tap in March, the panel found, leaving lots of cash still to flow into the economy.

$500 Billion

The report is the second from the bipartisan congressional panel responsible for overseeing $500 billion in grants and loans from the Treasury Department and the Fed to help struggling businesses, including airlines, during the coronavirus pandemic. The panel said it plans to meet with Treasury and Fed officials later this month.

“The agencies should bear in mind that the Federal Reserve’s emergency lending powers are statutorily limited to ‘unusual and exigent circumstances’,” the report said. “The Covid-19 crisis clearly created such circumstances.

However, it is important that the Federal Reserve’s use of these emergency powers not extend for a longer period of time than is necessary.”

The central bank’s emergency lending programs has helped stabilize financial markets, the panel said. The Treasury Department has issued loans and grants to airlines through a separate package meant for payroll assistance.

In April and May, U.S. corporate bond issuance, including investment grade and high-yield bonds, totaled over $300 billion each month, far outpacing the $105 billion and $130 billion in issuances in April, according to the report.

The Fed has launched its secondary market lending facility, purchasing $1.3 billion in exchange traded funds by mid May. The central bank also has a primary credit program, which has not yet begun buying new bonds.

Boeing Co. was able to raise $25 billion from private investors, meaning it turned down its share of Treasury’s $17 billion direct loan program for companies deemed critical to national security.

Still, small businesses have not yet been able to tap the Main Street lending programs that just opened on Monday to support three facilities in lending up to $600 billion to small and mid-sized businesses.

The loans will go to businesses with as many as 15,000 employees or $5 billion in revenue last year, and the loans will range in size from $250,000 to $300 million. The program is an alternative to the popular Paycheck Protection Program, which will stop accepting applications at the end of June.

None of the money for airline loans has yet to be distributed, according to the report.

American Airlines has said it applied for a $4.75 billion loan, and several other airlines, including United Airlines, Southwest Airlines and Jet Blue Airways, have said they are planning to tap some of the money, according to the report. The Treasury Department has issued loans and grants to airlines through a separate package meant for payroll assistance.

Boeing and GE

The Treasury Department is considering delaying distribution of the $17 billion for national security businesses in case Boeing and General Electric Co. eventually need the money. The loan program was created with those two defense giants in mind, according to Treasury Secretary Steven Mnuchin. But so far both companies have taken a pass.

The congressional oversight panel has four members but still lacks a chairman. House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell are supposed to choose that person jointly but have yet to announce an agreement. Pelosi said earlier this month that a selection was “imminent.”

The rest of the congressional panel was chosen by Pelosi, McConnell, Senate Democratic leader Chuck Schumer and House Republican leader Kevin McCarthy. The members are Democratic Representative Donna Shalala of Florida; GOP Senator Pat Toomey of Pennsylvania; Bharat Ramamurti, a former aide to Senator Elizabeth Warren of Massachusetts; and Representative French Hill, an Arkansas Republican.

The panel, one of three oversight bodies created by Congress to oversee the government’s coronavirus response spending, is not alone in facing delays in becoming fully operational. Trump removed the official who was supposed to head a separate accountability committee.

And a special inspector general, confirmed earlier this month, is facing pushback from Democrats who express doubts he can act independently because he was previously a White House lawyer.