June 14, 2021

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Lawmakers Settle Fed Controversy As They Rush To Close Stimulus Deal – The New York Times – Say It Like It’s News

Mr. Toomey and his Republican allies argued that his original proposal was limited to codifying what Congress intended in March when it enacted the original $ 2.2 trillion dollars. pandemic stimulus bill, which allocated funds to support the Fed’s emergency lending programs. But the reach of Toomey’s proposed language went further, raising the alarm of Democrats, who said they were enlisting prominent figures to speak out against it.

Ben S. Bernanke, who led the Fed during the 2008 financial crisis, had issued a statement warning that it was “critical that the Federal Reserve’s ability to respond promptly to damaging disruptions in credit markets was not limited.”

Referring to the March stimulus bill, Bernanke added, “The relief bill should ensure, at least, that the Federal Reserve’s emergency lending authorities, as they were before the CARES bill was passed, remain fully intact and available for respond to future crises “.

Mr. Schumer said Jerome H. Powell, the current Fed chairman, whom he called “almost a flamboyant liberal” was “strongly opposed” to Mr. Toomey’s proposal. The Fed declined to comment on whether Mr Powell, a Republican first named central bank governor by the former President Barack Obama, had discussed it in recent days with Mr. Schumer. Mr. Schumer did not respond to a request for more details.

During a private phone call with House Democrats on Saturday, California President Nancy Pelosi denounced the proposal, telling lawmakers that “for them to write in there that this can never happen again is just over the edge,” according to one person. the call, which disclosed the comments on condition of anonymity.

“It’s a way for them to say a Joe Biden: ‘We are tying your hands. No matter what happens, you can’t do it, ”Ms. Pelosi told the Democrats.

Mr. Toomey denied trying to harness the Biden administration and pointed out that for months he had been trying to make sure the Fed pandemic programs at sunset. But the language he proposed to attach to the stimulus plan was more expansive than that.