WASHINGTON (AP) – Congress passed a two-day interim spending bill on Friday night, avoiding a partial government shutdown and gaining even more time for frustrating and slow endgame negotiations on a back-up plan COVID-19 economic value of nearly $ 1 trillion.
Talks on aid against the virus remained on track, both sides said, but closing the final disagreements proved difficult. The weekend sittings were open and House leaders were hoping for a Sunday vote on the massive package, which wraps much of Capitol Hill’s unfinished business in 2020 in a take-it-or-leave-it-it-yourself monster that promises to be a foot thick – or Suite.
The House passed the interim finance bill by a vote of 320-60. The Senate approved it by voice vote almost immediately after, and President Donald Trump signed it on Friday night.
Senate Majority Leader Mitch McConnell, R-Ky., Said both sides remain committed to getting the deal done, even as Democrats launch a concerted campaign to block Republicans’ efforts to curtail the powers of emergency loan from the Federal Reserve. Democrats said the GOP proposal would deprive President-elect Joe Biden of essential tools to manage the economy.
Negotiations continued until Friday evening, but a deal was not likely until Saturday, lawmakers and their aides said. House lawmakers have been told they won’t have to show up for work on Saturday, but a Sunday session is likely. The Senate will vote on the candidatures.
The $ 900 billion package comes as the pandemic unleashes its most formidable surge to date, killing more than 3,000 victims a day and straining the country’s healthcare system. While the vaccines are on their way, most people will not get them for months. Unemployment claims are on the rise.
The emerging deal would provide more than $ 300 billion in business assistance and provide the unemployed with a federal unemployment premium of $ 300 per week and the renewal of state benefits that would otherwise expire just after Christmas. It also includes direct payments of $ 600 to individuals; vaccine distribution funds and cash for tenants, schools, the postal service and those in need of food assistance.
Democrats ran into a key hurdle on Friday: a provision by Tory Sen. Pat Toomey, R-Pa., That would shut down more than $ 400 billion in potential Federal Reserve lending powers established under a draft relief law in March. Treasury Secretary Steven Mnuchin shuts down programs in late December, but Toomey’s language goes further, banning the Fed from restarting lending next year, and Democrats say the provision would tie Biden’s hands and put the economy in danger.
“As we go through an unprecedented economic crisis, it is in the interests of the American people to maintain the ability of the Fed to respond quickly and forcefully,” said Biden economic adviser Brian Deese. “Undermining that authority could mean fewer loans to Main Street businesses, higher unemployment and greater economic pain across the country. “
The Fed programs involved have provided loans to small and medium-sized businesses and purchased government and local 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 candidate Janet Yellen, former Fed chair, would likely provide. The Treasury could also provide funds to support these programs without congressional approval and could ease loan requirements. This could encourage more loans under the programs, which have been used only to a limited extent so far.
Friday opened on an optimistic note after talks appeared to have stalled for much of Thursday.
Pending bill is first major legislative response to pandemic since landmark CARES law passed virtually unanimously in March, delivering $ 1.8 trillion in aid, more generous unemployment benefits of $ 600 a week, and direct payments of $ 1,200 to individuals.
The COVID-19 package would be added to a $ 1.4 trillion government appropriation bill that would fund federal agencies until next September. The move is likely to provide a final installment of $ 1.4 billion for Trump’s US-Mexico border wall as a condition for earning his signature.
For Republicans, the most important COVID-19 aid provision was a long-awaited second round of “paycheck protection” payments to particularly hard-hit businesses and the renewal of state unemployment benefits that are coming soon. expiring for the long-term unemployed.
Democrats were denied state and local government tax relief, a top priority, and they won additional COVID-19 unemployment benefit that was only half of what the CARES law offered. Democrats also won $ 25 billion to help struggling tenants with their payments and $ 45 billion for airlines and transit systems, but some left-wing critics said Democratic negotiators were outmaneuvered.
Indeed, McConnell has occupied the catbird seat since Senate Republicans surpassed expectations in November, while House Democrats barely held their majority. Democrats’ pre-election demands for a bill exceeding $ 2 trillion were quickly cut by more than half. Still, Biden is pushing for a deal, fearing a weakening economy awaits him on inauguration day.
Biden is promising another bill next year, but if Democrats lose the Georgia Senate second-round election next month and fail to win a majority in the Senate, they might carry little weight.
Most economists, including Federal Reserve Chairman Jerome Powell, strongly support the additional economic stimulus needed to keep businesses and households afloat during what is expected to be a tough winter. Many predict that the economy could contract in the first three months of 2021 without more help. Standard & Poor’s said in a report on Tuesday that the economy would be 1.5 percentage points lower in 2021 without more help.
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AP Economics writer Christopher Rugaber contributed.
