Lawmakers on both sides said a provision by Senator Pat Toomey, R-Pa., That would curb the Federal Reserve’s emergency powers, was the sticking point. Republicans are pushing for the Toomey plan, while Democrats are firmly against it. A compromise proved elusive and the two sides seem to be stuck for now.
“That has to be fixed. And then everything falls into place,” said House Speaker Nancy Pelosi, D-Calif. “It’s a very significant difference.”
SEE ALSO: White House Offer Adds $ 600 Checks to COVID-19 Relief
Toomey defended his controversial provision in a speech, saying the emergency powers were intended to stabilize capital markets at the height of the COVID panic this spring and will end at the end of the month anyway. The language would prevent the Biden administration from restarting them.
Even Toomey said this week that his provision “could be considered redundant,” but neither he nor his Democratic opponents withdrew from the fight despite the back and forth of compromise.
These are Fed programs that have lent loans to small and medium-sized businesses and bought government bonds and local government bonds, making it easier for those governments to borrow 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 that Biden’s Treasury Secretary-candidate Janet Yellen, a former Fed chairman, would likely provide. The Treasury could also provide resources to support those programs without congressional approval and ease credit requirements. This could lead to increased lending under the programs, which have only been used to a limited extent so far.
“I don’t think this will be resolved any time soon,” said Senator John Kennedy, R-La. “This is the Republican position now.”
“This is about existing authorities that the Fed has had for a long time to use in an emergency,” said Sen. Elizabeth Warren, D-Mass. “It’s about a lending authority to help small businesses, the state government, local government in the midst of a crisis.”
Democrats said Toomey’s position in the Fed would deprive President-elect Joe Biden of crucial tools to manage the economy.
A new midnight Sunday deadline for a government shutdown served as a backstop to the painstaking negotiations, which were being conducted in secret, largely among the top four leaders in Congress.
“We need to wrap up our talks, legislate and ground this plane,” said Mitch McConnell, Senate Majority Leader.
A Pelosi spokesman said she told Democratic colleagues at a Saturday conference that “we are within reach.”
The massive package would pack much of Capitol Hill’s unfinished 2020 operations into a take-it-or-leave-it measure that promises to be a foot thick or more. House lawmakers will likely only have a few hours to study it before voting on Sunday afternoon. A vote in the Senate was to follow, probably on Monday. Another short-term financing bill would likely be needed to avoid the approaching deadline.
An agreement in principle on Saturday would herald more hours of translating compromises into detailed legislation. Lawmakers are eager to leave Washington and end a tumultuous year.
The $ 900 billion package comes as the pandemic sets off its most terrifying wave to date, killing more than 3,000 victims a day and straining the health care system. While vaccines are on the way, most people don’t get them for months. The number of applications for unemployment is increasing.
MORE: 10,000 Restaurants Expected To Close In The Next 3 Weeks Due To COVID-19
The emerging deal would bring more than $ 300 billion in aid to businesses and provide the unemployed with federal unemployment benefits of $ 300 a week and an extension of state benefits that would otherwise expire immediately after Christmas. It includes $ 600 direct payments to individuals; funds for the distribution of vaccines and money for tenants, schools, the postal service and people in need of food aid.
It would be the first significant legislative response to the pandemic since the historic CARES law was passed almost unanimously in March, providing $ 1.8 trillion in aid, more generous $ 600 a week bonuses for unemployment benefits and $ 1,200 direct payments to individuals yields.
The new emergency aid was to be added to a $ 1.4 trillion government bill to fund the agencies through September next year. That measure is likely to provide a final $ 1.4 billion installment for the US-Mexico border wall as a condition of getting his signature.
For Republicans, the main COVID-19 relief effort was a long-awaited second round of “salary protection” payments to particularly hard-hit companies and the extension of soon-expiring state unemployment benefits for the long-term unemployed.
The Democrats did not get a direct tax credit for states and local governments, and they received additional COVID-19 unemployment benefits that were only half of what the CARES law provided. Democrats also won $ 25 billion to help struggling renters with their payments and $ 45 billion for airlines and transit systems, but some critics on the left said Democratic negotiators outwitted. Biden pushes for an agreement, fearing a weakening economy on inauguration day.
Biden promises another bill next year, but if Democrats lose elections to the Georgia Senate next month and fail to win a majority in the Senate, they may have little influence. GOP leaders say privately that providing an aid bill could help their incumbent candidates in January’s withdrawals, GOP Sen. Kelly Loeffler and David Perdue.
Most economists, including Jerome Powell, the chairman of the Federal Reserve Board, are in favor of additional economic stimulus measures necessary to keep businesses and households afloat during what is widely expected to be a harsh winter. Many predict that the economy could contract in the first three months of 2021 without further aid. Standard & Poor’s said in a report on Tuesday that without further assistance, the economy would be 1.5 percentage points smaller by 2021.
Copyright © 2020 by The Associated Press. All rights reserved.