Deal on Fed removes obstacle to agreement on COVID-19 economic relief

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CORONAVIRUS STIMULUS

Sean NoonePosted: DEC 20, 2020 / 12:23 AM CST | Updated: DEC 20, 2020 / 12:23 AM CST

Senate Minority Leader Sen. Chuck Schumer of N.Y., walks on Capitol Hill in Washington, Tuesday, Dec. 15, 2020. (AP Photo/Susan Walsh)

WASHINGTON (NewsNation Now) — Top congressional lawmakers struck a late-night agreement on the last major obstacle to a COVID-19 economic relief package costing nearly $1 trillion, clearing the way for votes as early as Sunday.

A Democratic aide said in an email that an agreement had been reached late Saturday and that compromise language was being finalized to seal a deal to be unveiled on Sunday.

The breakthrough involved a fight over Federal Reserve emergency powers that was defused by an odd couple: the Senate’s top Democrat and a senior conservative Republican.

“We’re getting very close, very close,” Minority Leader Chuck Schumer, D-N.Y., said earlier Saturday as he spent much of the day going back and forth with GOP Sen. Pat Toomey of Pennsylvania. Toomey had been pressing a provision to close down Fed lending facilities that Democrats and the White House said was too broadly worded and would have tied the hands of the incoming Biden administration.

The bill, lawmakers and aides say, would establish a temporary $300 per week supplemental jobless benefits and $600 direct stimulus payments to most Americans, along with a fresh round of subsidies for hard-hit businesses and funding for schools, health care providers, and renters facing eviction.

Schumer said he hoped both the House and Senate would vote on the measure Sunday. That would take more cooperation than the Senate can usually muster, but a government shutdown deadline loomed at midnight Sunday and all sides were eager to leave for Christmas.

Toomey defended his 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 were expiring at the end of the month anyway. The language he had sought would block the Biden administration from restarting them.

At issue were Fed emergency programs, launched amid the pandemic this spring, that provided loans to small and mid-size businesses and bought state and local government bonds. Those bond purchases made it easier for those governments to borrow, at a time when their finances were under pressure from job losses and health costs stemming from the pandemic.

Treasury Secretary Steven Mnuchin said last month that those programs, along with two that purchased corporate bonds, would close at the end of the year, prompting an initial objection by the Fed. Under the Dodd-Frank financial reform law passed after the Great Recession, the Fed can only set up emergency programs with the support of the Treasury Secretary.

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