WASHINGTON (AP) — An arcane battle over emergency Federal Reserve powers is frustrating efforts to lock down an agreement on an almost $1 trillion COVID-19 economic relief package. Saturday’s impasse is just the latest stumble in a partisan, monthslong fight, and feelings hardened as the Senate congregated for a weekend session.
Lawmakers on both sides said a provision by Sen. Pat Toomey, R-Pa., that would curb emergency Federal Reserve powers was the sticking point. Republicans are insisting on the Toomey plan, while Democrats are adamantly against it. A compromise was proving elusive, and the two sides seem stuck for the time being.
“That has to be resolved. And then everything will fall into place,” said House Speaker Nancy Pelosi, D-Calif. “It’s a very significant difference.”
Toomey defended his controversial provision in a floor speech, saying the emergency powers were designed to stabilize capital markets at the height of the COVID panic this spring and are expiring at the end of the month anyway. The language would block the Biden administration from restarting them.
Even Toomey said this week that his provision “could be seen as redundant,” but neither he nor his Democratic adversaries were backing down from the fight, though compromise language was being shuttled back and forth.
At issue are Fed programs that provided loans to small and mid-sized businesses and bought state 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, which Biden’s Treasury secretary nominee, Janet Yellen, a former Fed chair, probably would provide. The Treasury could also provide funds to backstop those programs without congressional approval and could ease the lending requirements. That could encourage more lending under the programs, which have seen only limited use so far.
“I don’t think this is going to be resolved anytime soon,” said Sen. John Kennedy, R-La. “This is now the Republican position.”
“This is about existing authorities that the Fed has had for a very long time, to be able to use in an emergency,” said Sen. Elizabeth Warren, D-Mass. “It’s about a lending authority for helping small businesses, state government, local government in the middle of a crisis.”
Democrats said Toomey’s stand on the Fed would deprive President-elect Joe Biden of crucial tools to manage the economy.
A new deadline of midnight Sunday for a government shutdown served as a backstop for the tortuous negotiations, which were being conducted in secret largely among the top four leaders in Congress.
“We need to conclude our talks, draft legislation, and land this plane,” said Senate Majority Leader Mitch McConnell.
A spokesman for Pelosi said she told Democratic colleagues on a Saturday conference call that “we’re right within reach.”
The massive package would wrap much of Capitol Hill’s unfinished 2020 business into a take-it-or-leave-it measure that promises to be a foot thick or more. House lawmakers will probably have only a few hours to study it before voting as early as Sunday afternoon. A Senate vote would follow, probably on Monday. One more short-term funding bill probably would be needed to avoid the looming deadline.
An agreement in principle Saturday would be a precursor to more hours of translating compromises into detailed legislation. Lawmakers are eager to exit Washington and close out a tumultuous year.
The $900 billion package comes as the pandemic is delivering its most fearsome surge yet, killing more than 3,000 victims per day and straining the health care system. While vaccines are on the way, most people won’t get them for months. Jobless claims are on the rise.
The emerging agreement would deliver more than $300 billion in aid to businesses and provide the jobless a $300-per-week bonus federal unemployment benefit and renewal of state benefits that would otherwise expire right after Christmas. It includes $600 direct payments to individuals; vaccine distribution funds and money for renters, schools, the Postal Service and people needing food aid.
It would be the first significant legislative response to the pandemic since the landmark CARES Act passed virtually unanimously in March, delivering $1.8 trillion in aid, more generous $600 per week bonus jobless benefits and $1,200 direct payments to individuals.
The new relief aid would be added to a $1.4 trillion governmentwide appropriations bill that would fund agencies through next September. That measure is likely to provide a last $1.4 billion installment for Trump’s U.S.-Mexico border wall as a condition of winning his signature.
For Republicans, the most important COVID-19 aid provision was a long-sought second round of “paycheck protection” payments to especially hard-hit businesses and renewal of soon-to-expire state jobless benefits for the long-term unemployed.
Democrats have been denied direct fiscal relief for states and local governments, and they got a supplemental COVID-19 unemployment benefit that was only half the size of what the CARES Act delivered. 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 were getting outmaneuvered. Biden is pressing for an agreement, fearing a weakening economy will await him on Inauguration Day.
Biden is promising another bill next year, but if Democrats lose Georgia Senate runoff elections next month and fail to win the Senate majority, they may have little leverage. GOP leaders say privately that delivering an aid bill may help their incumbent candidates in the January runoffs, GOP Sen. Kelly Loeffler and David Perdue.
Most economists, including Federal Reserve Board Chairman Jerome Powell, strongly support additional economic stimulus as necessary to keep businesses and households afloat through what is widely anticipated to be a tough winter. Many forecast the economy could shrink in the first three months of 2021 without more help. Standard & Poor’s said in a report Tuesday that the economy would be 1.5 percentage points smaller in 2021 without more aid.
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WASHINGTON (AP) — Congress passed a two-day stopgap spending bill Friday night, averting a partial government shutdown and buying yet more time for frustratingly slow endgame negotiations on an almost $1 trillion COVID-19 economic relief package.
The virus aid talks remained on track, both sides said, but closing out final disagreements was proving difficult. Weekend sessions were on tap, and House leaders hoped for a vote on Sunday on the massive package, which wraps much of Capitol Hill’s unfinished 2020 business into a take-it-or-leave-it behemoth that promises to be a foot thick — or more.
The House passed the temporary funding bill by a 320-60 vote. The Senate approved it by voice vote almost immediately afterward, and President Donald Trump signed it late Friday.
Senate Majority Leader Mitch McConnell, R-Ky., said both sides remain intent on closing the deal, even as Democrats launched a concerted campaign to block an effort by Republicans to rein in emergency Federal Reserve lending powers. The Democrats said the GOP proposal would deprive President-elect Joe Biden of crucial tools to manage the economy.
Negotiations continued into Friday night but an agreement wasn’t likely before Saturday, lawmakers and aides said. House lawmakers were told they wouldn’t have to report to work on Saturday but that a Sunday session was likely. The Senate will be voting on nominations.
The $900 billion package comes as the pandemic is delivering its most fearsome surge yet, killing more than 3,000 victims per day and straining the nation’s health care system. While vaccines are on the way, most people won’t get them for months. Jobless claims are on the rise.
The emerging agreement would deliver more than $300 billion in aid to businesses and provide the jobless a $300-per-week bonus federal unemployment benefit and renewal of state benefits that would otherwise expire right after Christmas. It also includes $600 direct payments to individuals; vaccine distribution funds and money for renters, schools, the Postal Service and people needing food aid.
Democrats on Friday came out swinging at a key obstacle: a provision by conservative Sen. Pat Toomey, R-Pa., that would close down more than $400 billion in potential Federal Reserve lending powers established under a relief bill in March. Treasury Secretary Steven Mnuchin is shutting down the programs at the end of December, but Toomey’s language goes further, by barring the Fed from restarting the lending next year, and Democrats say the provision would tie Biden’s hands and put the economy at risk.
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WASHINGTON (AP) — Congress has passed a two-day stopgap spending bill to avert a partial government shutdown this weekend. It's part of an effort by lawmakers to buy additional time for frustratingly slow endgame negotiations on an almost $1 trillion COVID-19 economic relief package. They'll be back in session on Sunday seeking to close out the broad package. Negotiators are seeking to resolve a battle over emergency Federal Reserve lending powers. Democrats say the GOP proposal would deprive President-elect Joe Biden of crucial tools to manage the economy. The hoped-for agreement would provide more than $300 billion in aid to businesses, a $300-per-week bonus federal jobless benefit, and $600 direct payments to individuals.
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WASHINGTON (AP) — With a key issue proving difficult to resolve, a midnight government shutdown loomed ominously closer Friday though congressional negotiators seemed tantalizingly close to agreement on an almost $1 trillion COVID-19 economic relief package. An air of exhausted frustration infused the Capitol.
Senate Majority Leader Mitch McConnell, R-Ky., said early in the day he was “even more optimistic now than I was last night,” but Democrats launched a concerted campaign to block an effort by Republicans to rein in emergency Federal Reserve lending powers. They said the GOP proposal would deprive President-elect Joe Biden of crucial tools to manage the economy.
Believing a deal could be reached Friday “would be a triumph of hope over experience,” said a downbeat No. 2 Senate Republican, John Thune of South Dakota.
Government funding lapses at midnight, and a partial, low-impact shutdown would ensue if Congress failed to pass a stopgap spending bill before then. House leaders hoped to pass a two-day stopgap spending bill before then, said an Appropriations Committee spokesman, but Senate passage was by no means certain.
Senators including Josh Hawley, R-Mo., were demanding to see what’s in the bigger COVID-19 package before they would agree to the stopgap bill, keeping the pressure on if the COVID-19 talks haven’t borne fruit by the deadline.
Democrats came out swinging at a key obstacle: a provision by conservative Sen. Pat Toomey, R-Pa., that would close down more than $400 billion in potential Federal Reserve lending powers established under a relief bill in March. Treasury Secretary Steven Mnuchin is shutting down the programs at the end of December, but Toomey’s language goes further, by barring the Fed from restarting the lending next year, and Democrats say the provision would tie Biden’s hands and put the economy at risk.
“As we navigate through an unprecedented economic crisis, it is in the interests of the American people to maintain the Fed’s ability to respond quickly and forcefully,” said Biden economic adviser Brian Deese. “Undermining that authority could mean less lending to Main Street businesses, higher unemployment and greater economic pain across the nation.”
The key Fed programs at issue provided loans to small and mid-sized businesses and bought state 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, which Biden’s Treasury secretary nominee, Janet Yellen, a former Fed chair, would likely provide. Treasury could also provide funds to backstop those programs without congressional approval and could ease the lending requirements. That could encourage more lending under the programs, which have seen only limited use so far.
The battle obscured progress on other elements of the hoped-for agreement After being bogged down for much of Thursday, negotiators turned more optimistic, though the complexity of finalizing the remaining issues and drafting agreements in precise legislative form was proving daunting.
The central elements appeared in place: more than $300 billion in aid to businesses; a $300-per-week bonus federal jobless benefit and renewal of soon-to-expire state benefits; $600 direct payments to individuals; vaccine distribution funds and money for renters, schools, the Postal Service and people needing food aid.
Lawmakers were told to expect to be in session and voting this weekend.
The delays weren’t unusual for legislation of this size and importance, but lawmakers are eager to leave Washington for the holidays and are getting antsy.
The pending bill is the first significant legislative response to the pandemic since the landmark CARES Act passed virtually unanimously in March, delivering $1.8 trillion in aid, more generous $600 per week bonus jobless benefits and $1,200 direct payments to individuals.
The CARES legislation passed at a moment of great uncertainty and unprecedented shutdowns aimed at stopping the coronavirus, but after that, many Republicans focused more on loosening social and economic restrictions as the key to recovery instead of more taxpayer-funded aid.
Now, Republicans are motivated chiefly to extend business subsidies and some jobless benefits, and provide money for schools and vaccines. Democrats have focused on bigger economic stimulus measures and more help for those struggling economically during the pandemic. The urgency was underscored Thursday by the weekly unemployment numbers, which revealed that 885,000 people applied for jobless benefits last week, the highest weekly total since September.
The emerging package falls well short of the $2 trillion-plus Democrats were demanding this fall before the election, but B iden is eager for an aid package to prop up the economy and help the jobless and poor. While he says more economic stimulus will be needed early next year, some Republicans say the current package may be the last.
“If we address the critical needs right now, and things improve next year as the vaccine gets out there and the economy starts to pick up again, you know, there may be less of a need,” said Sen. John Thune of South Dakota.
Most economists, however, strongly support additional economic stimulus as necessary to keep businesses and households afloat through what is widely anticipated to be a tough winter. Many forecast the economy could shrink in the first three months of 2021 without more help. Standard & Poor’s said in a report Tuesday that the economy would be 1.5 percentage points smaller in 2021 without more aid.
The details were still being worked out, but the measure includes a second round of “paycheck protection” payments to especially hard-hit businesses, $25 billion to help struggling renters with their payments, $45 billion for airlines and transit systems, a temporary 15% or so increase in food stamp benefits, additional farm subsidies, and a $10 billion bailout for the Postal Service.
The emerging package would combine the $900 billion in COVID-19 relief with a $1.4 trillion government-wide funding bill. Then there are numerous unrelated add-ons that are catching a ride, known as “ash and trash” in appropriations panel shorthand.
A key breakthrough occurred earlier this week when Democrats agreed to drop their much-sought $160 billion state and local government aid package in exchange for McConnell abandoning a key priority of his own — a liability shield for businesses and other institutions like universities fearing COVID-19 lawsuits.
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WASHINGTON (AP) — It’s a hurry up and wait moment on Capitol Hill as congressional negotiators on a must-pass, almost $1 trillion COVID-19 economic relief package struggled through a handful of remaining snags Thursday. The holdups mean a weekend session now appears virtually certain, and a top lawmaker warned that a government shutdown this weekend can’t be ruled out.
All sides appeared hopeful that the wrangling wouldn’t derail the legislation, even as the chances for announcing a deal Thursday slipped away. After being bogged down for much of the day, negotiators reported behind-the-scenes progress Thursday night.
The central elements of a hard-fought compromise appeared in place: more than $300 billion in aid to businesses; a $300-per-week bonus federal jobless benefit and renewal of soon-to-expire state benefits; $600 direct payments to individuals; vaccine distribution funds and money for renters, schools, the Postal Service and people needing food aid.
But a temporary funding bill runs out Friday at midnight and the Senate’s No. 2 Republican, Sen. John Thune, said if there isn’t a deal by then, some Republicans might block a temporary funding bill — causing a low-impact partial weekend shutdown — as a means to keep the pressure on.
Lawmakers were told to expect to be in session and voting this weekend.
“We must not slide into treating these talks like routine negotiations to be conducted at Congress’ routine pace,” Senate Majority Leader Mitch McConnell, R-Ky., said. “The Senate is not going anywhere until we have COVID relief out the door.”
The hangups involved an effort by GOP conservatives to curb emergency lending programs by the Treasury Department and Federal Reserve, a Democratic demand to eliminate local government matching requirements for COVID-related disaster grants, and myriad smaller disagreements over non-pandemic add-ons, lawmakers and aides said.
The delays weren’t unusual for legislation of this size and importance, but lawmakers are eager to leave Washington for the holidays and are getting antsy.
The pending bill is the first significant legislative response to the pandemic since the landmark CARES Act passed virtually unanimously in March, delivering $1.8 trillion in aid and more generous $600 per week bonus jobless benefits and $1,200 direct payments to individuals.
The CARES legislation passed at a moment of great uncertainty and unprecedented shutdowns in a failed attempt to stymie the coronavirus, but after that many Republicans focused more on loosening social and economic restrictions as the key to recovery instead of more taxpayer-funded aid.
Now, Republicans are motivated chiefly to extend business subsidies and some jobless benefits, and provide money for schools and vaccines. Democrats have focused on bigger economic stimulus measures and more help for those struggling economically during the pandemic. The urgency was underscored Thursday by the weekly unemployment numbers, which revealed that 885,000 people applied for jobless benefits last week, the highest weekly total since September.
The emerging package falls well short of the $2 trillion-plus Democrats were demanding this fall before the election, but President-elect Joe Biden is eager for an aid package to prop up the economy and help the jobless and hungry. While Biden says more economic stimulus will be needed early next year, some Republicans say the current package may be the last.
“If we address the critical needs right now, and things improve next year as the vaccine gets out there and the economy starts to pick up again, you know, there may be less of a need,” Thune said.
The details were still being worked out, but the measure includes a second round of “paycheck protection” payments to especially hard-hit businesses, $25 billion to help struggling renters with their payments, $45 billion for airlines and transit systems, a temporary 15% or so increase in food stamp benefits, additional farm subsidies, and a $10 billion bailout for the Postal Service.
Some Democrats also mourned the exclusion of a $500 million aid package to help states run their elections. The money was seen as urgent this summer to help states more safely administer their elections in the middle of the pandemic. But with the election over, momentum for the money has gone away.
The emerging package was serving as a magnet for adding on other items, and the two sides continued to swap offers. It was apparent that another temporary spending bill would be needed to prevent a government shutdown. That was likely to pass easily, though possibly not until the last minute.
The emerging package would combine the $900 billion in COVID-19 relief with a $1.4 trillion government-wide funding bill. Then there are numerous unrelated add-ons that are catching a ride, known as “ash and trash” in appropriations panel shorthand.
One leading candidate is an almost 400-page water resources bill that targets $10 billion for 46 Army Corps of Engineers flood control, environmental and coastal protection projects. Another potential addition would extend a batch of soon-to-expire tax breaks, including one for craft brewers, wineries and distillers.
The end-of-session rush also promises relief for victims of shockingly steep surprise medical bills, a phenomenon that often occurs when providers drop out of insurance company networks.
“It’s been very thoroughly vetted,” said retiring Sen. Lamar Alexander, R-Tenn., of the surprise medical billing measure. That measure, combined with an assortment of other health policy provisions, generates savings for federal funding for community health centers.
A key breakthrough occurred earlier this week when Democrats agreed to drop their much-sought $160 billion state and local government aid package in exchange for McConnell abandoning a key priority of his own — a liability shield for businesses and other institutions like universities fearing COVID-19 lawsuits.
The addition of the $600 direct payments came after recent endorsements from both President Donald Trump and progressives like Sen. Bernie Sanders, I-Vt., and Rep. Alexandra Ocasio-Cortez, D-N.Y., along with ambitious GOP Sen. Josh Hawley of Missouri. The idea isn’t very popular in other corners since it’s extremely costly and would give money to millions of people who may not need it, but it has enormous political appeal and proved difficult to stop.