Lawmakers on both sides said one of Senator Pat Toomey’s provisions, R-Pa., That would curb the Federal Reserve’s emergency powers was the key point. Republicans insist on the Toomey plan, while Democrats are firmly against it. A compromise was elusive and both sides seem trapped for the time being.
“That has to be resolved. And then everything will be in place,” said House Speaker Nancy Pelosi, D-Calif. “It’s a very important difference.”
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Toomey defended his controversial disposition in a speech on the floor, saying emergency powers were designed to stabilize capital markets at the height of the COVID panic this spring and that they will expire by the end of the month. The language would block Biden’s administration from restarting.
Even Toomey said this week that his disposition “could be considered redundant,” but neither he nor his Democratic opponents backed down from the fight, even though the language of compromise was transmitted back and forth.
At issue are the Fed’s programs that provided loans to small and medium-sized businesses and bought bonds from state and local government, making it easier for these governments to lend at a time when their finances are under pressure from the pandemic.
The Fed would need the support of the Treasury Department to restart the programs, which would likely provide the nominee for Biden Treasury Secretary Janet Yellen, a former Fed chairman. The Treasury could also provide funds to support these programs without congressional approval and could ease loan requirements. This could encourage more lending under the programs, which so far have had only limited use.
“I don’t think that will be resolved any time soon,” said Sen. John Kennedy, R-La. “This is now the Republican position.”
“These are the existing authorities that the Fed has had for a long time to be able to use them in an emergency,” said Sen. Elizabeth Warren of D-Mass. “It’s a credit authority to help small businesses, the state government.” , local government in crisis “.
Democrats said Toomey’s position on the Fed would deprive President-elect Joe Biden of crucial tools to manage the economy.
A new deadline from Sunday to midnight for the government shutdown served as support for the tortuous negotiations, which were taking place in secret, largely between the four main leaders in Congress.
“We need to conclude our talks, draft legislation and land this plane,” said Mitch McConnell, leader of the Senate majority.
A Pelosi spokesman said he told fellow Democrats at a conference call Saturday that “we are within reach.”
The huge package would wrap much of Capitol Hill’s outstanding 2020 business in an acceptance measure that promises to be a foot or more thick. House lawmakers will likely only have a few hours to study it before voting on Sunday afternoon. After the Senate vote, probably on Monday. A shorter-term funding bill would probably be needed to avoid the planned deadline.
An agreement in principle on Saturday would be a precursor to more hours of translating commitments into detailed legislation. Lawmakers are eager to get out of Washington and close out a tumultuous year.
The $ 900 billion package comes as the pandemic produces its most fearsome increase to date, killing more than 3,000 victims a day and straining the health care system. Even though vaccines are on the way, most people won’t get them for months. Unemployment claims are on the rise.
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The emerging agreement would provide more than $ 300 billion in aid to businesses and provide the unemployed with a $ 300-a-week bonus for federal unemployment benefits and renewal of state benefits that would otherwise expire just after Christmas. Includes direct payments of $ 600 to individuals; vaccine and money distribution funds for tenants, schools, postal service and people in need of food aid.
It would be the first significant legislative response to the pandemic since the CARES Act was passed virtually unanimously in March, offering $ 1.8 trillion in aid, more generous weekly unemployment benefit benefits and $ 1,200 direct to people.
The new aid would be added to a $ 1.4 trillion government appropriation bill that would fund the agencies until next September. This measure is likely to provide a final $ 1.4 billion quota for the Trump-US border wall with Mexico as a condition for winning his signature.
For Republicans, the most important COVID-19 aid benefit was a second round of “wage protection” payments to especially affected businesses and the renewal of state unemployment benefits that would just expire for the unemployed. long-lasting.
Democrats have been denied direct tax relief for states and local governments and have obtained a complementary COVID-19 unemployment benefit that was only half of what the CARES Act delivered. Democrats also earned $ 25 billion to help troubled tenants with their payments and $ 45 billion for airlines and transit systems, but some critics on the left said Democratic negotiators they were overcoming. Biden is pushing for an agreement, fearing that a weakened economy will await it on the opening day.
Biden promises another bill next year, but if Democrats lose Georgia’s second-month Senate election and don’t get a Senate majority, they may have little influence. Republican Party leaders say in private that delivering an aid bill can help their incumbent candidates in the January runoff, Republican Sen. Kelly Loeffler and David Perdue.
Most economists, including Federal Reserve Board Chairman Jerome Powell, strongly support the additional economic incentives needed to keep businesses and households afloat during what is expected to be a harsh winter. Many predict that the economy could shrink in the first three months of 2021 without further aid. Standard & Poor’s said Tuesday in a report that the economy would be 1.5 percentage points lower in 2021 without further help.
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