Democrats on Friday came out on a provision from Conservative Senator Pat Toomey, R-Pa., Which would shut down more than $ 400 billion in potential Federal Reserve lending powers instituted in March under an emergency bill. Pelosi told reporters on Saturday that negotiations over that language are the biggest remaining hurdle.
“We had a big problem, one last, miniscule case with Mr. Toomey. And that needs to be resolved. And then everything falls into place. But that’s the big thing. Roll back on this, ”Pelosi told reporters as she walked into the Capitol.
This is a breaking news update. An earlier version of this report is below.
The affected Fed programs lent loans to small and medium-sized businesses and bought government and local government bonds, making it easier for those governments to borrow at a time when their finances were strained by the pandemic.
Negotiators on Saturday reported continued progress with an economic aid package of nearly $ 1 trillion COVID-19, and optimism grew that the backlog of talks would soon lead to an agreement. The Senate held a Saturday session, while members of the House stood by for a vote that will arrive no earlier than Sunday.
A new government shutdown on Sunday at midnight served as a backstop to the arduous negotiations that were being conducted in secret, largely among the four chief leaders of the Capitol Hill warring tribes.
A key negotiator said the talks were continuing in good faith.
“But the American people cannot feed their family or pay their bills through the good faith talks of Congress,” said Majority Leader Mitch McConnell, leader of the Senate GOP faction. “We need to conclude our talks, legislate and land this plane.”
The massive package would pack much of Capitol Hill’s 2020 unfinished business into a take-it-or-leave-it behemoth 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 would follow, and one more emergency financing bill is likely to be needed to avoid a Sunday closure at midnight.
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The House passed Friday’s temporary financing bill by 320-60 votes. The Senate voted it almost immediately afterward, and President Donald Trump signed it late Friday.
McConnell did not provide an update on the talks, but a remaining problem concerns an attempt by Republican Conservatives to rein in the Federal Reserve’s powers of granting emergency loans. Democrats said the GOP proposal would deprive President-elect Joe Biden of crucial tools to manage the economy.
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.
House lawmakers were told not to report on Saturday, but a Sunday session was likely. The Senate will vote on nominations on Saturday.
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 country’s 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.
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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 also includes direct payments of $ 600 to individuals; funds for the distribution of vaccines and money for tenants, schools, the postal service and people in need of food aid.
Democrats on Friday came out on a provision from Conservative Senator Pat Toomey, R-Pa., Which would shut down more than $ 400 billion in potential Federal Reserve lending powers instituted in March under an emergency bill. Treasury Secretary Steven Mnuchin shuts down the programs in late December, but Toomey’s language continues by barring the Fed from restarting lending next year.
“As we navigate an unprecedented economic crisis, it is in the interests of the American people that the Fed remains able to respond quickly and forcefully,” said Brian Deese, Biden’s economic adviser. “Undermining that authority could lead to less lending to Main Street businesses, higher unemployment rates and more economic pain across the country.”
The affected Fed programs lent loans to small and medium-sized businesses and bought government and local government bonds, making it easier for those governments to borrow at a time when their finances were strained by 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 Department could also provide resources to stop 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.
The pending bill is the first significant legislative response to the pandemic since the historic CARES Act was passed almost unanimously in March, offering $ 1.8 trillion in aid, more generous $ 600 a week bonuses for unemployment benefits and 1,200 dollars in direct payments to individuals.
The measure largely follows a template created by a bipartisan group of senators and a team of House pragmatists. But top leaders are firmly in control, although months of warfare weaken the relationship.
The COVID-19 package would be added to a bill of $ 1.4 trillion in government credits that would fund federal 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.
Democrats have been denied direct tax relief for states and local governments, a top priority, 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.
Indeed, McConnell has been in the catbird seat since Senate Republicans outperformed expectations in November, while House Democrats barely held their majority. Preelection Democratic demands for a bill of more than $ 2 trillion were quickly cut by more than half. Still, Biden is pushing 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. Conversely, GOP leaders say privately that delivering an aid bill could aid 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.
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