US lawmakers appeared on track Sunday to pass a roughly $900 billion Covid-19 relief package for millions of Americans, after Democrats and Republicans reached a compromise on the future spending powers of the Federal Reserve.
The package is expected to include aid for vaccine distribution and logistics, extra jobless benefits of $300 per week, and a new round of $600 stimulus checks — half the amount provided in checks distributed last March under the CARES Act.
“I believe there is going to be a deal” Sunday, Republican Senator Mitt Romney told CNN.
“There are always sticking points, but the big one was resolved last night very late” with the agreement on the central bank, he said.
Congress was working under a deadline of midnight Sunday — needing to reach consensus both on assistance to hard-pressed American households and companies and on the 2021 federal budget in order to avoid a government shutdown.
Such a shutdown — a scenario not unheard of in politically divided Washington — could be disastrous, given the worsening economy and record daily death tolls from Covid-19.
The new deal is expected to maintain the central bank’s ability to set up emergency lending programs without congressional approval, according to The Wall Street Journal, but the Fed would require approval to restart existing CARES Act programs once they expire at the end of this year.
Republicans had sought to limit the Fed’s ability to provide credit for businesses and other institutions, claiming Democrats were trying to use the legislation to create a “slush fund” for state and local governments they control.
Democrats argued that restricting the bank’s powers could compound the fiscal crisis and hamper the ability of the incoming Joe Biden administration to boost the ailing US economy.
Senate minority leader Chuck Schumer confirmed on Twitter Sunday that a deal had been reached to drop “dangerous language tying the Fed’s hands to respond to crises.”
“Resolving this issue successfully now allows us to move onto passing aid for Americans, extend unemployment insurance, deliver survival checks, and more,” he wrote.
Before the deal was reported, President Donald Trump tweeted: “Why isn’t Congress giving our people a Stimulus Bill?
“GET IT DONE, and give them more money in direct payments.”
Democrats too wanted Americans to receive larger checks of up to $1,200, the same amount that was sent to millions of people in the springtime.
Even as the pandemic continues to take a record toll in US cases and deaths, the economy has been gravely battered, with jobless numbers rising in the past two weeks.
Making matters still worse, millions of Americans are set to lose jobless benefits after Christmas, even as federal moratoriums on evictions and on repayment of student loans are to expire at the end of the month.
With a potential shutdown looming, the House of Representatives Friday voted 320 to 60 to extend funding for federal agencies through Sunday to allow negotiators to thrash out a deal.
New assistance for struggling businesses and the unemployed is seen as critical to getting the world’s biggest economy back on its feet, even as new vaccines offer hope that an end to the pandemic may be in sight.
The $2.2 trillion package passed in March was credited with preventing a much more severe economic downturn.
It included huge amounts to rescue American companies, including $377 billion in grants to small businesses to pay workers and rent, $500 billion for loans to larger businesses and states and nearly $600 billion in tax breaks and deferrals.
But critics said too much assistance went to big corporations and not enough to ordinary Americans and small businesses.
On Wednesday, Fed chairman Jerome Powell had stressed the high risk that countless small businesses could go bust in the absence of new federal aid.
The Fed has estimated that the jobless rate will end the year at 6.7 percent before dipping to 5 percent next year — still a long way from the 3.5 percent registered in February.