WASHINGTON — Senior lawmakers reached a compromise over the Federal Reserve’s emergency lending powers late Saturday night, overcoming a major hurdle that prevented Congress from completing a $900 billion coronavirus relief package earlier in the week, according to multiple sources.
A last-minute roadblock emerged on Friday as Democrats accused Republicans, namely Pennsylvania’s Sen. Pat Toomey, of attempting to encumber the incoming Biden administration by cutting off the Federal Reserve’s emergency lending abilities created by the CARES Act meant to protect the already battered economy.
“Now that Democrats have agreed to a version of Sen. Toomey’s important language, we can begin closing out the rest of the package to deliver much-needed relief to families, workers, and businesses,” a spokesman for Senate Majority Leader Mitch McConnell, R-Ky., told NBC News.
Compromise language is being finalized and any open items are expected to be worked out overnight, according to two aides.
The legislation hasn’t been released yet, but the deal is expected to include direct payments of $600 for qualifying Americans, a federal unemployment insurance bonus of $300 a week, more money for businesses struggling to pay rent and workers and vaccine distribution funds.
A spokesperson for Toomey called the agreement an “unqualified victory for taxpayers.”
“Senate Republicans achieved all four of our objectives regarding the CARES Act Federal Reserve lending programs,” Toomey spokesperson Steve Kelly said.
“This agreement rescinds more than $429 billion in unused CARES Act funds; definitively ends the CARES Act lending facilities by Dec. 31, 2020; stops these facilities from being restarted and forbids them from being duplicated without congressional approval,” Kelly added. “This agreement will preserve Fed independence and prevent Democrats from hijacking these programs for political and social policy purposes.”
Democrats, on the other hand, said the new language was a concession to Toomey and his GOP allies.
“After going back and forth all day with Leader Schumer, Sen. Toomey has agreed to drop the broad language in his proposal that would have prevented the Fed Chair from establishing similar facilities in the future to the ones created in March,” said a senior Democratic aide.
Congressional leaders settled on a framework midweek that was expected to include a $300 federal unemployment bonus, a new round of direct payments, small business funding and money to distribute Covid-19 vaccines.
The House had already advised votes as early as 1 p.m. Sunday.
“We’re getting very close. Very close,” Minority Leader Chuck Schumer, D-N.Y., told the Capitol Hill pool late Saturday.
He said it “looks like we’ll be able to” pass a Covid-19 relief bill in both chambers “if things continue on this path, and nothing gets in the way.”
The negotiations come after months of fits and starts of unsuccessful talks that led to lapses in various provisions of the CARES Act, including the $600-per-week federal unemployment bonus, augmenting the suffering of millions of Americans across the country who have struggled to make ends meet.
The agreement was expected to be reached earlier in the week but hit a roadblock after some Republicans demanded an end to Federal Reserve authorities over emergency lending. Democrats pushed back, accusing the GOP of seeking to sabotage the economy overseen by incoming President Joe Biden.
The two parties had long been at odds over price tag and policy, but negotiations were kick-started in recent weeks by a bipartisan group of moderate senators and House members, known as the Problem Solvers Caucus, which quietly began informal discussions to hammer out a viable framework.
Their talks resulted in agreement on a $748 billion proposal that became the basis of negotiations between McConnell, Schumer, House Speaker Nancy Pelosi, D-Calif., and House Minority Leader Kevin McCarthy, R-Calif., as well as the Trump administration.
Alex Moe and Sahil Kapur reported from Washington and Alicia Victoria Lozano from Los Angeles.