San Diego Union-Tribune (Sunday)
CONGRESS CLOSES IN ON $900B VIRUS AID PACKAGE
Senators break impasse on Fed powers; deadline to avert shutdown looms
Congressional leaders late Saturday broke an impasse that was threatening to derail a compromise $900 billion stimulus plan, racing against a Sunday night deadline to avoid a government shutdown.
After a monthslong standoff on a pandemic aid package, Democrats and Republicans were tantalizingly close to completing the emergency plan to rush direct payments, unemployment benefits and food and rental assistance to millions of Americans, relief to businesses, and provide funds for vaccine distribution.
But with time running out for a deal, they wrestled over a proposal by Sen. Pat Toomey, R-PA., to en
sure the termination of a series of pandemic relief programs created this year by the Federal Reserve, potentially curtailing the central bank’s ability to fight financial crises in the future.
A late push from Toomey to rein in the nation’s central bank had divided lawmakers over the last several days. But the impasse appeared to grow significantly wider on Saturday, as congressional leadership and rank-and-file senators on both sides of the aisle dug in over the issue, imperiling prospects for a deal before Monday.
But late Saturday, Democratic leaders agreed to a compromise that would give the central bank more flexibility to respond to future economic calamities.
According to reporting by The Hill, the compromise will remove $429 billion in unspent CARES Act funding for the Federal Reserve’s credit-lending facilities and repurpose it as an offset for the new $900 billion coronavirus relief bill, GOP sources said.
The deal will close four Federal Reserve creditlending facilities created by the CARES Act and will prevent the Fed from creating replica facilities without congressional approval.
Toomey, a conservative lawmaker on the Senate’s banking committee, demanded provisions be included in the COVID relief package that would curb the ability of the Fed to restart emergency lending programs for localities and small businesses.
Senate Majority Leader Mitch Mcconnell, R-KY., told Senate Republicans on a private call Saturday afternoon that the party should stick by Toomey’s plan, according to two people who requested anonymity to share details of the call.
But Senior Democrats had balked at agreeing to what they saw as a nakedly political attempt to limit the economic tools available to the Biden administration. Throughout Friday and Saturday, a chorus of Senate Democrats emerged urging party leadership not to budge on the issue. Democrats have already agreed to drop aid to state and local governments from the relief package, and some lawmakers have hoped the central bank could serve as a backstop for assisting ailing municipalities.
Toomey’s original proposal would have amounted to one of the most significant intrusions into the central bank’s autonomy in years. Former Federal Reserve chair Ben Bernake weighed in on the dispute in an unusual public statement on Saturday, saying that the central bank’s emergency lending authorities should be at a minimum as robust as they were before passage of the CARES Act in March. Bernake said that it was “vital” that the central bank’s ability to “respond promptly to damaging disruptions in credit markets not be circumscribed.”
The intensifying dispute threatened to derail delicate negotiations for a nearly $1 trillion relief package that would provide hundreds of billions in emergency aid to the unemployed and small businesses; funding for vaccine distribution and health care facilities; and another round of stimulus checks to millions of Americans.
The need for such a package has only grown as the coronavirus rampages the nation and several emergency programs protecting tens of millions of Americans are set to expire in a matter of days.
House Speaker Nancy Pelosi, D-calif., on Saturday called the dispute over Toomey’s proposal “the big thing” holding back an agreement.
Asked about the latest in negotiations, Sen. Richard Durbin, D-ill., the No. 2 ranking Senate Democrat, said: “Toomey, Toomey, Toomey.”
The approaching Christmas holiday, a looming pair of Senate special elections in Georgia and the prospect of a partial government shutdown have added to the pressure for negotiators to finalize a deal this weekend.
Congressional leaders have given themselves until midnight tonight to close out talks. President Donald Trump Friday night signed a two-day spending bill to keep the government open until midnight. If no deal is reach on the stimulus package, lawmakers would have to pass another temporary measure before Monday, otherwise parts of the federal government would shut down.
Mcconnell, the Senate majority leader, has said lawmakers will not leave Washington for the holidays until a deal is done. And on Friday night he expressed optimism that a deal would get done. But on Saturday, multiple lawmakers and aides on Capitol Hill who were not authorized to speak about the negotiations publicly, conceded that it was hard to imagine a swift resolution to the stalemate.
Lawmakers have also yet to resolve several other lingering issues. Those include eligibility for small-business relief; how to structure unemployment aid; and the criteria for sending out a $600-per-person stimulus check. Pelosi also told House Democrats on a call on Saturday that lawmakers remained divided over the amount of money necessary for food assistance, according to a person who spoke on the condition of anonymity to share her private remarks.
However, many aides close to talks expressed optimism these issues could be addressed fairly quickly once the dispute over the
Fed was resolved. Sen. John Thune, R-S.D., the No. 2 ranking Republican senator, said Saturday that the “probably more likely scenario” is that negotiations stretch into Monday.
“But I think we’re in the homestretch, we’re on the glide path,” Thune said. “I think we’re going to get this done and help out the American people.”
House Majority Leader Steny Hoyer, D-MD., told House members Friday not to expect votes until 1 p.m. today at the earliest — just 11 hours before the next shutdown deadline.
Likely to run many hundreds of pages, the package is not only expected to carry the $900 billion COVID relief deal but also $1.4 trillion in yearlong appropriations for federal agencies; the extension of tens of billions of dollars in expiring tax breaks; a bipartisan energy bill; a long-delayed bipartisan solution to surprise medical billing; and dozens of other potential add-ons that a vast corps of lobbyists and congressional aides are hoping to include in this last legislative vehicle of 2020.
Lawmakers will almost certainly be asked to vote on a sweepingly broad piece of legislation with only hours to review it.