Clash Over Fed's Lending Powers Stalls Relief Bill Negotiations

A Republican proposal to curtail the Federal Serve's emergency lending powers foiled efforts of the Congress to agree on a $900 billion relief bill for a second day on Saturday.

Both parties continue to dig on the dispute over the Fed powers despite a looming government shutdown in the absence of a relief bill.

According to a report from The Wall Street Journal, congressional leaders have already agreed on the contours of a relief bill earlier this week.

The insisted they were close to finalizing its details if the argument over the Fed can be resolved.

The Fed powers provision was put forward by Pennsylvania Senator Pat Toomey.

Some of the expected inclusions of the relief bill is a $300 weekly enhanced unemployment benefit, a new round of stimulus checks and funding for schools, vaccination, small businesses and health care.

The Congress' deadline to striking a stimulus deal was already extended twice: one was a week-long extension ending last Friday and a second resolution that extended the deadline by 48 hours.

Toomey said his controversial provision was designed to stabilize capital markets at the height of the pandemic panic over the spring which would expire by the end of the month anyway.

But If Toomey's language gets adopted, the incoming Biden administration will not be able to revive the emergency lending programs of the Federal Reserve, said a report from CNBC.

Some Democrats criticized the proposal as the GOP's way of using the coronavirus relief bill to "sabotage" President-elect Joe Biden's administration.

Compromise Elusive in Fight Over Fed Power

Either side of the aisle is far from compromise on the provision of curbing the Fed's emergency powers.

Republicans are sticking with the Toomey proposal while Democrats were firmly against it.

Senate Minority Leader Chuck Schumer told the Journal on Saturday that Toomey's legislation was a "significant hurdle" in completing a funding agreement. "It's about tying the hands of the next Treasury secretary and the next Fed chairman in a true emergency."

Key lawmakers continue to talk it over the Senate floor. Toomey and Schumer also met to exchange ideas, a report from The Associated Press said.

House Speaker Nancy Pelosi said the Toomey proposal was a "very significant difference" in the funding bill which needed to be addressed.

"That has to be resolved. And then everything will fall into place," she said.

Lawmakers Remain Optimistic of Relief Bill Despite Hurdles

Toomey and other leaders were optimistic that they will have a deal after negotiations in both government funding and federal economic aid.

But New York Times said the arguments may continue into the weekend and where there is a possibility of a brief government shutdown while the stimulus negotiations push forward.

As the holidays approach, both chambers are getting ready to remain in session, but it's unclear yet if they will be gunning for a stopgap spending bill or allow the brief shutdown to happen as they rush to finish legislation.

The new relief bill will be added to the government appropriations bill which funds agencies through September 2021.

Negotiations were conducted secretly and largely upon the Congress' top four leaders.