Congressional officials struck a compromise on Saturday on the role of the central bank in supporting the economy during the pandemic, the Wall Street Journal reported, paving the way for a vote on a much-anticipated $ 900 billion plan. aid for millions of Americans.
The deal would maintain the central bank’s ability to set up emergency lending programs without congressional approval, according to the business daily. But the Fed would need approval to restart existing programs under the Coronavirus Aid, Relief, and Economic Security Act (CARES) enacted in March, once they expire at the end of this year.
Republicans were seeking to limit the Fed’s ability to provide credit to businesses and other institutions, saying Democrats were trying to use the legislation to create a “slush fund” for the local communities they control.
For Democrats, restricting the powers of the central bank could worsen the fiscal crisis and hamper the new Biden administration’s ability to stimulate the struggling US economy.
The deadlock in discussions raised the threat of a government shutdown, a scenario which is not unprecedented, but which this year would have been disastrous given the deteriorating economy and the record number of daily deaths of Covid-19.
Senate Democratic Minority Leader Chuck Schumer believes the House of Representatives and Senate could vote on the proposal on Sunday, according to the Wall Street Journal.
A spokesman for Republican Senate Majority Leader Mitch McConnell told the WSJ that now that the Fed dispute has been resolved, “we can agree on the rest of the plan to bring much needed relief to families.” , employees and businesses.
Before the deal was announced, President Donald Trump tweeted: Why doesn’t Congress give our people a stimulus package? DO IT and give them more money in direct payments ”.
The compromise “would preserve the independence of the Fed and prevent Democrats from hijacking these programs for political and social policy purposes,” a spokesperson for Republican Senator Pat Toomey said, according to the WSJ.
A plan to support businesses in difficulty and the unemployed is seen as crucial to strengthening the economy hard hit by the crisis caused by the Covid-19 pandemic.
This should include measures for the distribution and logistics of coronavirus vaccines as well as additional unemployment benefits of $ 300 per week and direct checks to families of $ 600, or half of the amount granted last March under of the CARES law.