Senate leaders are pushing for compromise to finalize Coronavirus Relief Deal Saturday

Senate leader Chuck Schumer (D., NY) said lawmakers were still negotiating Saturday on the final stumbling block: a push from Senator Pat Toomey (R., Pa.) To restrict the Federal Reserve’s powers to issue emergency loans. .

“Sen. Toomey’s legislation puts up barriers to emergency loans that go well beyond current legislation,” Mr. Schumer said in the Senate Saturday. “The point is to tie the hands of the next Treasury Secretary and the next Fed. president in a real emergency. “

Senate leader Mitch McConnell (R., Ky.) Said Democratic leaders and Treasury Secretary Steven Mnuchin had productive discussions all week, urging lawmakers to conclude their negotiations. He did not specifically discuss Toomey’s proposal.

“We need cooperation and focus from all sides,” said Mr McConnell on the Senate floor. “There’s a kind of gravity here in Congress where, unless we’re careful, any major negotiation can easily slip into an endless series of disagreements. Let’s be wary of that. “

Senate Republicans were expected to speak to Mr. Mnuchin early Saturday afternoon.

Senate Majority Whip John Thune (R., SD) said work had continued to develop the legislative language for the less controversial parts of the bill to speed up the process once a deal is finalized, but said it was possible for the process would culminate in Monday.

While Congress leaders settled on the outline of the aid package days ago, they were still struggling through the latest policy differences.

Late Friday, House Majority Leader Steny Hoyer (D., Md.) Said the first vote in Parliament on a possible deal would take place at 1:00 pm on Sunday. Even if the negotiators reach an agreement soon, Mr. Hoyer says they still need time to write the text of the bill.

“We hope they will reach an agreement in the near future,” he said. “They haven’t achieved one yet. There are still some important problems. “

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

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

The package is expected to include $ 300 a week in increased unemployment benefits, a second round of incentive checks, and funding for schools, health care providers, vaccine distribution and small businesses. Negotiations had gained momentum this week after Congress leaders agreed to drop two provisions: funding for hard-hit state and local governments, which Democrats and some Republicans had sought, as well as liability protection for corporations and other entities that were active during the pandemic, a top GOP priority.

Lawmakers have said they expect to revisit both issues in early 2021, as Democratic President-elect Joe Biden has said that everything Congress is doing this year will be a down payment for further assistance.

Mr. Toomey has pushed for a measure that would limit the Federal Reserve’s ability to enact the types of emergency credit programs it approved in March to quell an emerging financial panic. That move would go beyond an earlier proposal to withdraw $ 429 billion from the Treasury to avoid losses in the Fed’s credit programs.

Mr Schumer said on Saturday that Mr Toomey’s proposal, which had only recently emerged in the negotiations, was “the only major hurdle to finalizing an agreement”.

Mr Mnuchin last month refused to allow the programs to continue beyond December 31, thinking it was not legally permitted. An impartial congressional investigation group disputed that interpretation on Thursday.

In March, Congress provided $ 454 billion to the Treasury to cover losses in Fed credit programs under the $ 2 trillion Cares Act stimulus package. Credit markets recovered sharply after the Fed announced credit programs to keep the flow of credit to large companies and cities and states. The Fed ended up buying less than $ 30 billion in loans and other assets.

Mr. Toomey has urged that the Fed be prevented from reviving those programs without the explicit approval of Congress. According to the wording of The Wall Street Journal, Mr. Toomey forbid the Fed and the Treasury from setting up a loan program “similar to any program” created earlier this year with money from the Cares Act.

In a statement, Mr. Toomey said on Friday that his proposal was strictly to ensure that credit programs, after they expire this year, “cannot be restarted or duplicated without Congressional approval.”

Currently, the Fed and the Treasury are allowed to set up emergency credit programs if they jointly agree. To justify his decision to shut down the credit programs this year, Mr. Mnuchin had said the Fed and the Treasury would be free to restart them next year.

Fed Chairman Jerome Powell has repeatedly made the same point, including at a press conference on Wednesday, in an attempt to reassure markets if conditions deteriorate.

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

A top economic adviser to President-elect Joe Biden said on Friday that the Republican proposal would unnecessarily limit the Fed’s ability to respond to a crisis. “The good faith of Congress to provide immediate relief should not be slowed down by provisions that could endanger our future financial stability,” said Brian Deese, who is expected to serve as director of the White House’s National Economic Council. .

Lawmakers were also working on differences around the distribution and eligibility requirements of the approximately $ 600 direct checks expected to be included in the final bill, the duration and limits around a temporary increase in food stamp benefits, and how to become a subsistence utility structured. venues and other industries seeking help.

Democrats pushed for an adjustment of the cost-sharing between the federal government and state and local governments for emergency relief. Democrats want the Federal Emergency Management Agency to cover more pandemic-related expenditures for state and local governments, while Republicans want to put more curbs on how that money can be used.

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