Dispute Over Fed's Powers Complicates Stimulus Negotiations.
'As they closed in on a $900 billion stimulus deal, top Democrats and Republicans in Congress hit a barrier on Friday over a last-minute Republican effort to cut off the Federal Reserve’s ability to restart pandemic relief programs and limit the central bank’s ability to fight future financial crises.
The proposal, fiercely opposed by Democrats who argue it would revoke a crucial tool to stabilize the sputtering economy, emerged as perhaps the thorniest point of contention among a handful of remaining issues holding up an agreement. It could take away some of the Fed’s power as a “lender of last resort,” and curtail President-elect Joseph R. Biden Jr.’s latitude in dealing with the continuing economic fallout from the pandemic. . .
*A senior Democratic aide said that an agreement had been in sight before Senator Patrick Toomey, Republican of Pennsylvania, moved to insert a measure to bar a future Treasury secretary from restarting Fed emergency loan programs. The programs have kept credit flowing to medium-sized businesses, state and local governments and corporations amid the pandemic. Concern centered on the broadness of Mr. Toomey’s proposal: It would prohibit both those programs and any “similar” one, which could curb the Fed’s future ability to keep credit flowing to states and businesses.
While the Fed debate had developed into a major sticking point by Friday morning, it was not the only area of disagreement. Democrats were also making a last-ditch effort to provide emergency aid to states, which they argued was critical to helping them weather the pandemic and avoid huge layoffs and cuts in services that could reverberate through the economy.
Both disputes could carry heavy consequences for Mr. Biden, who will take office facing a cascade of fiscal crises in states around the country that will be even more dire if Congress fails to provide at least some assistance now.'>>>
https://www.nytimes.com/live/2020/12/18/us/joe-biden-trump#as-a-stimulus-deal-takes-shape-a-dispute-over-the-feds-powers-is-a-major-sticking-point
