Spills into stimulus talks

Fed fight spills into stimulus talks on pivotal day

Mitch McConnell has vowed that the Senate won't leave Washington without a spending and Covid deal.

By BURGESS EVERETT and HEATHER CAYGLE

Democrats are accusing GOP Sen. Pat Toomey's insistence on winding down a key Federal Reserve program as the primary impediment to finishing up a $900 billion coronavirus aid package.

Though Senate Majority Leader Mitch McConnell said on Friday that he's "even more optimistic now than I was last night that a bipartisan, bicameral framework for a major rescue package is very close at hand," the finger-pointing at Toomey (R-Pa.) in the frantic negotiations suggested a tough road ahead for negotiators.

A senior Democratic aide said "an agreement was in sight" until Toomey and the GOP made a new ask on the Fed's emergency lending programs. Toomey has pushed for similar provisions since July, but Democrats argue his latest proposal is more restrictive.

The current version of Toomey's plan would prevent the emergency lending program established by the CARES Act from continuing next year and would also bar the central bank from starting any similar program, according to a draft viewed by POLITICO.

"Sen. Toomey and Republicans inserted an 11th hour purely political, unrelated provision to tie [Joe] Biden’s hands and risk throwing the economy into a tailspin. The Toomey provision would be an unprecedented change to the law to strip the Fed chair of one of their most important tools to quickly respond to any future economic crisis," the aide said.

A Republican aide shot back that the Democrats' comments are "funny when you consider not 9 months ago, these facilities constituted a slush fund for Republicans to enrich their billionaire friends." And Toomey told reporters on Thursday that this provision is "the most important thing" to him in the bill.

He said it is about “preventing the Fed from being politicized” and misused by being pressured into bailing out municipalities and companies and that his effort was not "an effort to in any way hamstring the Biden administration or weaken our economy."

The battle is an ominous sign for one of the most pivotal days of Congress this year. That's because Congress woke up on Friday morning with a major to-do-list: preventing a government shutdown at midnight and clinching the $900 billion coronavirus deal.

While congressional leaders have struck a deal on the broad outlines of a package that would deliver $600 stimulus checks to many individuals and children, $325 billion for small businesses and a $300 weekly unemployment boost, finalizing the deal has proven stubbornly difficult.

McConnell once again vowed that the Senate would not leave without a deal on a spending package that will marry the coronavirus bill with a $1.4 trillion omnibus government funding measure through September. He said Friday that the four leaders have been “working around the clock."

That pledge and Congress’ unfinished business sets up a breakneck Friday of negotiating on the coronavirus and a possible attempt at a short-term funding bill to avoid a lapse in government funding. Sen. John Cornyn (R-Texas) said several different sizes of a short-term spending bill were being considered, though Senate Majority Whip John Thune (R-S.D.) has warned that some senators may object to it and force a brief shutdown.

Regardless of what happens with the immediate government funding obstacle, both chambers of Congress are set to work through the weekend to finish off the lame duck session. It’s a fitting finale for a Congress that opened with the longest government shutdown in history.

In addition to the Fed fight, disaster relief, direct payment eligibility and money for entertainment venues were also among the final sticking points for negotiators. Then there’s the issue of drafting hundreds of pages of legislative text and getting it through the House and the Senate, where one individual senator can slow everything down.