Senate leaders urge compromise to end coronavirus relief deal on Saturday

Senate Minority Leader Chuck Schumer (D., NY) said lawmakers were still negotiating Saturday over the latest hurdle: a push by Sen. Pat Toomey (R., Pa.) To restrict the powers of Federal Reserve emergency loan.

“Sen. Toomey’s legislation creates barriers to emergency lending that go far beyond current legislation, “Schumer said in the Senate floor on Saturday.” It’s about tying the hands of the next Treasury secretary and the next Fed president. in a real emergency “.

Senate Majority Leader Mitch McConnell (R., Ky.) Said Democratic leaders and Treasury Secretary Steven Mnuchin held productive talks all week and urged lawmakers to conclude their negotiations. . He did not specifically discuss Toomey’s proposal.

“We need the cooperation and focus of all parties,” McConnell said in the Senate chamber. “There’s a kind of gravitational pull here in Congress where, unless we’re careful, any major negotiation can easily get into an endless catalog of disagreements. Let’s protect ourselves from that.”

Senate Republicans were expected to speak by phone with Mr. Mnuchin in the early hours of Saturday afternoon.

The whip of the Senate majority, John Thune (R., SD), said work has continued on drafting the legislative language for the less controversial parts of the bill to speed up the process once has completed an agreement, but said it was possible the process would be dumped. Monday.

Although congressional leaders looked at the outlines of the relief package days ago, they were still scrutinizing the latest political disagreements.

Late Friday, House Majority Leader Steny Hoyer (D., Md.) Said the first vote in the House on a possible deal would be on Sunday at 1 p.m. Even if negotiators reach an agreement soon, Mr Hoyer said they would still need time to write the text of the bill.

“We hope they reach an agreement in the near future,” he said. “It simply came to our notice then. There are still some important issues pending. “

The White House has pushed for a resolution and Mr. Trump has been particularly eager to secure another round of direct home care checks, GOP lawmakers said.

The president “has made it clear that he wants the next round of relief to include stimulus checks in a significant number. We are working with Congress to agree on an agreement that can happen as soon as possible,” the White House spokesman said. , Ben Williamson.

The package is expected to include $ 300 a week in improved unemployment benefits, a second round of stimulus checks and funding for schools, health care providers, vaccine distribution and small businesses. Negotiations had accelerated this week after Congressional leaders agreed to withdraw two provisions: funding for affected local and state governments, which Democrats and some Republicans had sought, as well as liability protections for businesses and other entities that they operate during the pandemic. priority.

Lawmakers have said they hope to revisit both issues in early 2021, as Democratic President-elect Joe Biden has said anything Congress does this year will be an upfront payment for additional aid.

Toomey has pushed for the insertion of a measure restricting the Federal Reserve’s ability to establish the types of emergency loan programs it authorized in March to curb an emerging financial panic. This step would go beyond a previous proposal to revoke $ 429 billion provided to the Treasury to support losses from Fed lending programs.

Schumer said on Saturday that Mr Toomey’s proposal, which had only recently emerged in negotiations, was “the only significant obstacle to finalizing a deal”.

Last month, Mnuchin refused to allow the programs to continue after Dec. 31, saying he did not believe it was legally allowed. A non-partisan research group in Congress discussed that interpretation Thursday.

In March, Congress provided $ 454 billion to the Treasury to cover losses from Fed loan programs in the $ 2 trillion Cares Act stimulus package. Credit markets rebounded sharply after the Fed announced lending programs to keep credit to large corporations, cities and states. Ultimately, the Fed bought less than $ 30 billion in loans and other assets.

Toomey has insisted that the Fed be prevented from reviving these programs without the explicit approval of Congress. According to language revised by The Wall Street Journal, Mr. Toomey’s legislative proposal would prohibit the Fed and the Treasury from establishing any loan program “similar to any program” created earlier this year with money from the Expenses Act.

In a statement Friday, Mr. Toomey said his proposal was slashed to ensure that loan programs, after expiring this year, “cannot be restarted or duplicated without Congressional authorization.”

Currently, the Fed and Treasury have permission to establish any emergency loan program if they jointly agree. In justifying his decision to close lending programs this year, Mnuchin had said the Fed and Treasury would be free to restart them next year.

Fed Chairman Jerome Powell has repeatedly stated the same point, even at a news conference Wednesday, in an effort to reassure markets in the event of deteriorating conditions.

Democrats said Republicans are limiting the tools available to the new administration. “The proposal to withdraw from the Fed [emergency lending] the authority would set a terrible precedent, affect the independence of the Fed and weaken its ability to respond quickly to future crises, “Virginia Democratic Sen. Mark Warner, a member of the Senate Banking Committee, said Friday.

A top economic adviser to President-elect Joe Biden said Friday that the Republican proposal unduly limited the Fed’s ability to respond to a crisis. “The bona fide effort by Congress to achieve immediate relief should not be delayed with provisions that could jeopardize our future financial stability,” said Brian Deese, who is expected to be the director of the National Economic Council. of the White House.

Lawmakers were also working out differences around the distribution and eligibility requirements for direct checks of about $ 600 that are expected to be included on the final bill, the duration and limits around a temporary increase in the benefits of the stamp. of food and how to structure a relief program places of action and other industries seeking help.

Democrats were pushing to adjust the cost-sharing between the federal government and state and local governments to get emergency aid. Democrats want the Federal Emergency Management Agency to cover more pandemic-related spending for state and local governments, while Republicans want to put more of a brake on how that money could be used.

Write to Kristina Peterson at [email protected] and Andrew Duehren at [email protected]