With time running out, there was broad optimism on Capitol Hill this week about a $900 billion relief package. All the relevant players were on board with the basic outline of the plan, and once negotiators crossed the T’s and dotted the I’s, Congress could pass it and go home.
By all accounts, there’s just one hurdle that’s proving tough to clear. As NBC News noted this morning, a “lingering issue involves the Treasury Department and Federal Reserve lending program — Sen. Pat Toomey of Pennsylvania and other Republicans want to put guardrails around the program.”
What’s this all about? The Washington Post explained:
The fight centers on the Fed’s extraordinary actions to prevent an economic collapse. Back in March, the Federal Reserve moved quickly to slash interest rates, flood the financial markets and boost bond purchases. While Congress has struggled for months to extend federal aid programs, the Fed has stuck with its slate of emergency lending programs, and had no intention of winding them down before the recovery was complete.
Democrats want the emergency lending programs to continue, in order to give the economy the best possible chance of success, while Republicans have suddenly decided Congress must rein in the Fed’s authority. And by some measures, GOP senators are insisting that this demand be met or the whole package may fail.
On Twitter this morning, Sen. Brian Schatz (D-Hawaii) wrote that the deal was very nearly complete, until “the last minute,” when Senate Republicans made “a demand that WAS NEVER MENTIONED AS KEY TO THE NEGOTIATIONS.” Sen. Chris Murphy (D-Conn.) added, “[A]s a deal was coming together, Senate Republicans suddenly demanded to strip Biden’s Federal Reserve of an important tool to restart the economy.”
A senior Democratic aide told NBC News, meanwhile, that an agreement “was in sight to deliver aid to the American people until Sen. Toomey and Republicans inserted an 11th hour purely political, unrelated provision to tie Biden’s hands and risk throwing the economy into a tailspin.”
To be sure, whenever there are major bipartisan, bicameral negotiations, there are stumbling blocks that threaten to derail the efforts. Invariably, a member or two will try to take advantage of the delicate process, saying, “I need just one more thing….”
Usually, when the process has advanced this far, those at the negotiating table figure something out. But given the variables, it’s best not to assume that success is inevitable. It’s not.
Watch this space.
