WASHINGTON, Dec 17 (Reuters) – A potential new obstacle to a $ 900 billion economic aid bill for coronavirus emerged in the U.S. Congress on Thursday as some Senate Republicans insisted on language that would ensure that expiring Federal Reserve loan programs cannot be reactivated.
A Democratic aide criticized the measure by Sen. Pat Toomey, a Republican from Pennsylvania, which limited the ability of President-elect Joe Biden to respond to the heavy economic weight of the pandemic, which in addition to killing more than 300,000 Americans has thrown millions to work.
“I would be bound by the hands of the Biden administration to use these tools if necessary,” said a Democratic aide to the House.
Both sides were fighting on Thursday to reach an agreement on a new compromise aid package. They have set aside democratic demands for a new flow of funding for state and local governments and Republican demands to protect companies from coronavirus-related demands.
But Toomey wants to make sure the Fed and Treasury deprive themselves of the authority to restore pandemic loan facilities that Treasury Secretary Steven Mnuchin will expire on Dec. 31, including the Main Street program for medium-sized companies and facilities for municipal bond issuers. and securities backed by corporate assets and credits.
Mnuchin is claiming about $ 455 billion from Fed facilities, which will be used to help pay for the new aid package for individuals and small businesses.
But the move limits Biden Treasury Secretary Janet Yellen’s nominee’s options to support financial markets in the event of further turmoil and her transition team deemed it “deeply irresponsible.”
Toomey told reporters that his proposal would prevent the Treasury and the Federal Reserve from making “carbon copies” of loan programs to replenish them with new names.
“I think there is very broad support among Republican senators for this approach and it is very important to many of us,” Toomey said.
Senator Mike Crapo, Republican chairman of the Senate Banking Committee, said he supported Toomey’s proposal because in the COVID-19 legislation passed in March, “we made it very clear that the facility would be completed this year.” .
Toomey, who would chair the banking panel next year if Republicans retained seats in the Senate in Georgia’s Jan. 2 election, said the Fed would maintain its non-pandemic emergency credit powers. The central bank and Treasury should “come to Congress if they believe there is a specific need for extraordinary programs,” he said.
Reports by David Lawder; Edited by Scott Malone and Grant McCool