Lawmakers on Capitol Hill resolved a standoff over the lending powers of the Federal Reserve Board, clearing the way for a vote as early as today on a $900 billion COVID-19 relief bill, according to a published report.
U.S. Sen. Pat Toomey, R-Pa., put up a major roadblock last week as he pushed a provision to ensure the temporary Federal Reserve lending programs set up last spring are halted at the end of the year.
Toomey, of Lehigh County, says those lending programs were intended to provide short-term help at a time when financial markets were in a precarious place, and should not be repurposed. Democrats vehemently opposed Toomey’s plan, saying it would hamstring the incoming Biden administration’s ability to reinvigorate the economy.
Toomey and Senate Minority Leader Charles E. Schumer, D-N.Y., reached a compromise late Saturday night, the Washington Post reported early Sunday. The compromise language bars the Fed from “creating precise copies of the lending programs created through the $2 trillion Cares Act passed by Congress. It affirmatively shuts down as of Jan. 1 those programs, which were seeded with a $500 billion appropriation by Congress in March. As congressional negotiators have discussed for weeks, the $429 billion in unspent funds will be redirected to other programs in the new $900 billion bill,” according to the Post.
Treasury Secretary Steven Mnuchin last month asked the Fed to wrap up most of the emergency lending programs by the end of the year due to the law’s requirements. Those lending programs largely went unused, but their creation was viewed as helping to calm the financial markets.
The compromise reached Saturday will still prevent the Fed from pursuing new lending programs without congressional authorization, the Post reported. But it also gives the incoming Biden administration new tools, in concert with the central bank, to deal with economic threats brought on by the pandemic, the newspaper reported.
In a statement released by his office, Toomey called the compromise “an unqualified victory for taxpayers. Senate Republicans achieved all four of our objectives regarding the CARES Act 13(3) Federal Reserve lending programs.”
“This agreement rescinds more than $429 billion in unused CARES Act funds; definitively ends the CARES Act lending facilities by December 31, 2020; stops these facilities from being restarted; and forbids them from being duplicated without congressional approval,” Toomey continued. “This agreement will preserve Fed independence and prevent Democrats from hijacking these programs for political and social policy purposes.”
Toomey announced earlier this year that he will not run for a third term in 2022, and will not seek the Republican nomination for governor that year.
After months of delays, top congressional leaders had made headway earlier this week on a relief bill.
The expected framework was poised to include among other provisions, more direct payments to Americans; extended emergency unemployment benefits; eviction protections; the suspension of student loan payments; additional loans for small businesses; and added funding for food assistance, child care support and coronavirus testing centers and vaccine distribution.
Unlikely to make the final cut were two contentious provisions: $160 billion targeted to state and local governments, which was sought by Democrats, and a GOP-backed proposal to protect employers from COVID-19-related lawsuits by workers who get sick.
Capital-Star Washington Reporter Laura Olson contributed reporting to this story.