The Washington Post - USA (2020-12-02)

WEDNESDAY, DECEMBER 2 , 2020. THE WASHINGTON POST EZ RE A

BY RACHEL SIEGEL

Lawmakers debated the emer-
gency lending facilities run by the
Federal Reserve and Treasury De-
partment at a Senate Banking
Committee hearing Tuesday, re-
vealing diverging opinions on the
state of the recovery and how to
keep it going.
Treasury Secretary Steven
Mnuchin testified before the pan-
el, giving a strong defense of his
decision not to extend the pro-
grams beyond the end of the year.
Mnuchin said that the programs
had done their jobs and that hun-
dreds of billions of dollars put
toward the facilities would be
better spent elsewhere. Fed Chair
Jerome H. Powell, meanwhile,
said that “we would have left the
facilities in place to be backstops”
and continued to push for more
help from Congress.
Support for the emergency
lending facilities set up at the
start of the pandemic has waned
among Republicans who say it’s
time to phase out the programs.
By contrast, Democrats say cut-
ting them off too soon jeopardizes
the economic recovery.
Disputes around the programs
became especially charged last
month when Mnuchin said he
would not extend most of them
beyond the end of the year.
Mnuchin also requested that the
Fed return hundreds of billions of
dollars that had been put toward
the facilities but never spent, say-
ing the money could be reallocat-
ed by Congress to directly reach
distressed parts of the economy.
The announcement spurred a
rare public clash between Treas-
ury and the Fed, which wanted
the programs to stay in place to
continue backstopping the mar-
kets in case the recovery faltered.
Democrats and several econo-
mists condemned Mnuchin’s
move, saying it was premature to
cut off the extra support. Presi-
dent-elect Joe Biden’s transition
team called the decision “deeply
irresponsible.”
At the hearing, Mnuchin said
his decision r eflects a legal inter-
pretation of the Cares Act, adding
that the programs were never
meant to be in place indefinitely.
Despite the initial rebuke, the Fed
has agreed to return the unused
money and is in the process of

doing so.

“My decision not to extend

these facilities was not an eco-

nomic decision,” Mnuchin said

Tuesday. He also dismissed criti-

cism from the left that the move

was politically motivated.

Republicans on the banking

panel echoed Mnuchin, saying fi-

nancial markets have healed

since a tailspin in February and

March. Sen. Patrick J. Toomey

(Pa.), a top Republican on the

panel, said that the programs

were designed for a specific pur-

pose in the pandemic’s early days

and that they should not be

thought of as an evergreen sup-

plement to fiscal policy.

“It’s always been the case that

you could imagine some bad

thing happening in the future, if

some terrible thing were to hap-

pen to threaten the viability of our

financial markets,” Toomey said.

“There are some industries that

are in big trouble. That is a true

fact.... It’s up to Congress to

decide what to do about that.”

The emergency programs that

targeted small businesses and lo-

cal governments have issued few

loans, drawing criticism around

those programs’ usefulness. Some

economists have pushed the Fed

and Treasury to loosen the lend-

ing terms and expand the pro-

grams’ reach. Fed officials have

said the Main Street lending pro-

gram, for example, could see more

interest if businesses continue to

struggle through the winter.

The programs only allow the

Fed to lend money, with the ex-

pectation that those loans are

repaid, while Congress can issue

grants or direct payments

through a stimulus package.

During the hearing, Senate

Democrats said the programs

should not be cut off.

Sen. Sherrod Brown (Ohio), the

top Democrat on the panel, said

Mnuchin was “trying to sabotage

our economy on your way out the

door.” Sen. Robert Menendez

(D-N.J.) told Mnuchin at the hear-

ing that “no one will be better off

when you end the Cares Act facili-

ties.”

“There is a choice here, and

unfortunately the choice you’re

making is very consequential,”

Menendez said.

The recovery picked up speed

faster than many economists ex-

pected, with unemployment fall-

ing to 6.9 percent in October. But

there are mounting fears that a

wintertime surge in coronavirus

cases, plus uncertainty around

another stimulus package, will

claw back that momentum. Pow-

ell said the pace of improvement

has moderated over the past few

months, with spending on ser-

vices like travel and hospitality

remaining low.

“We can both acknowledge the

progress and point out just how

far we have left to go. The lion’s

share of the credit should go to

fiscal policy,” Powell said Tuesday.

In the backdrop are ongoing

questions of whether Congress

and the White House will reach a

deal on another stimulus pack-

age. Powell has long maintained

that fiscal support will be needed

to keep the recovery on track, and

Mnuchin has called for a targeted

relief bill to fill the economy’s

lingering gaps.

Negotiations around another

stimulus package have broken up

multiple times. On Tuesday, Sen-

ate Republican leaders circulated

a plan that includes a liability

lawsuit shield for businesses,

small-business assistance and

short-term, limited jobless aid,

but did not include additional

funding for state and local gov-

ernments or transit agencies.

Earlier in the day, a bipartisan

group of senators unveiled a

roughly $908 billion stimulus

proposal that includes $

weekly unemployment benefits

lasting four months as well as

$160 billion in funding for state

and local governments.

The package would also in-

clude a temporary moratorium

on some coronavirus-related law-

suits against companies and oth-

er entities and funding for small

businesses, schools, health care,

transit authorities and student

loans. Still, much remained in

flux, and many congressional

aides were skeptical the plan will

become law.

[email protected]

Parties clash on emergency lending

Hearing underscores rift

on w hether programs

should be extended

BY SEUNG MIN KIM,

JEFF STEIN

AND MIKE DEBONIS

A bipartisan group of senators
introduced a coronavirus aid pro-
posal worth about $908 billion on
Tuesday, aiming to break a
months-long partisan impasse
over emergency federal relief for
the U.S. economy amid the on-
going pandemic.
The new plan came amid a
flurry of congressional jostling
over the shape of economic relief,
with House Democrats assem-
bling a new proposal, Senate Ma-
jority Leader Mitch McConnell
(R-Ky.) creating a new plan and
President-elect Joe Biden calling
for a massive government re-
sponse. The growing calls for ac-
tion have not led to a unified
approach, prompting political
leaders to forge ahead in different
directions.
Still, the new actions and state-
ments Tuesday may reflect move-
ment toward some level of pan-
demic relief for millions of Ameri-
cans. Congress has faced increas-
ing pressure to approve
additional economic aid since
talks between the White House
and House Democrats collapsed,
first over the summer and then
again in the fall ahead of the
Nov. 3 election.
While the negotiations among
leadership and the administra-
tion were stuck, senators in both
parties worked together for
weeks on a proposal to break the
logjam. Several centrist senators
— including Bill Cassidy (R-La.),
Susan Collins (R-Maine), Angus
King (I-Maine), Joe Manchin III
(D-W.Va.), Mitt Romney (R-Utah)
and Mark R. Warner (D-Va.) —
held a news conference Tuesday
morning to push their proposal as
a template for legislation that
could pass Congress as the econo-
my faces increasing strain from a
fall surge in coronavirus cases.
“Our action to provide emer-
gency relief is needed now more
than ever before. The people need
to know we are not going to leave
until we get something accom-
plished,” Manchin said, flanked
by about half a dozen lawmakers
at the Capitol. “I’m committed to

seeing this through.”

McConnell disclosed Tuesday

that senior Republicans received

a new coronavirus relief offer

from House Speaker Nancy Pelosi

(D-Calif.) and Senate Minority

Leader Charles E. Schumer

(D-N.Y.) on Monday night. Demo-

cratic aides declined to disclose

details of their offer, and Schumer

called it a “private proposal to

help us move the ball forward.”

Senate Republican leaders cir-

culated a slimmed-down plan

Tuesday that would probably be

fiercely opposed by Democrats.

The measure includes a liability

shield for businesses and more

small-business assistance. It

would provide short-term, limit-

ed jobless aid but no additional

funding for state and local gov-

ernments or help for cash-

strapped transit agencies.

The plan represented a con-

servative turn from the Senate

Republican leader following the

defeat of President Trump, who

had pushed the GOP to support

more spending ahead of his elec-

tion. In September, McConnell

pushed for a federal supplement

of unemployment benefits of

$300 per week. The latest propos-

al from his office would extend

base unemployment benefits and

a program for gig workers and

independent contractors for

about one month b ut would oth-

erwise not provide supplemental

federal unemployment benefits

— a reversal in Republicans’ posi-

tions. A spokesman for McCon-

nell did not immediately respond

to a question about the change.

The McConnell bill also rein-

troduces a Republican plan to

allow diners to claim a tax deduc-

tion on their meal expenditures, a

provision pushed by the business

lobby but viewed skeptically by

economists and some Republi-

cans.

“We just don’t have time to

waste time. We have a couple of

weeks left here,” McConnell said.

“Obviously, it does require bipar-

tisan support to get out of Con-

gress, but it requires a presiden-

tial signature.”

By contrast, the plan circulated

by the bipartisan group of sena-

tors is light on details but seeks to

reach a middle ground on numer-

ous contentious economic issues.

It would provide $300 a week

in federal unemployment ben-

efits for roughly four months — a

lower amount than the $600 per

week Democrats sought, while

still offering substantial relief to

tens of millions of jobless Ameri-

cans. The agreement includes

$160 billion in funding for state

and local governments, a key

Democratic priority opposed by

most Republicans, as well as a

temporary moratorium on some

coronavirus-related lawsuits

against companies and other en-

tities — a key Republican priority

that most Democrats oppose. The

measure also includes funding for

small businesses, schools, health

care, transit authorities and stu-

dent loans, among other mea-

sures.

Aides close to the effort de-

scribed details as fluid and sub-

ject to change. Few outside the

group of Senate negotiators en-

dorsed the proposal Tuesday, with

some Republican senators com-

plaining the $908 billion price tag

was too steep.

But the substantive efforts at a

compromise in the Senate reflect

growing agitation from influen-

tial senators against the hard-line

stances of their respective lead-

ers, who have struggled to agree

on another round of coronavirus

relief aid as the economy contin-

ues to suffer under the weight of

the pandemic.

McConnell and Schumer have

traded barbs, with McConnell on

Monday accusing Democrats of

“all-or-nothing obstruction.”

Schumer said in a floor speech

that “both sides must give” but

also trashed McConnell for ad-

vancing a GOP wish list in stimu-

lus talks.

Some lawmakers have hoped

that elements of a bipartisan

stimulus deal could be added to

the spending bill required to

avoid a Dec. 11 government shut-

down, although that could com-

plicate the must-pass legislation.

Nonetheless, McConnell suggest-

ed Tuesday that the spending bill

could be an avenue to pass target-

ed coronavirus relief.

Pelosi and Treasury Secretary

Steven Mnuchin spoke Tuesday

afternoon about the government

funding bill. As for the bipartisan

Senate framework, Mnuchin said

he would review it, although the

plan got a much icier reaction

from the White House.

“The Trump administration

has been in ongoing talks with

Leader McConnell and [House

Minority Leader Kevin] McCar-

thy about a targeted COVID relief

plan,” White House press secre-

tary Kayleigh McEnany said in a

statement. “The $908 billion pro-

posal has not been a topic of

discussion.”

Pelosi said in a statement: “Ad-

ditional COVID relief is long over-

due and must be passed in this

lame duck session.”

Biden, who introduced his eco-

nomic team Tuesday, expressed

support for some form of corona-

virus relief now and signaled to

Republicans that more aid will be

necessary next year after his inau-

guration in January.

“Right now, the full Congress

should come together and pass a

robust package for relief to ad-

dress these urgent needs,” Biden

said in prepared remarks in

Wilmington, Del. “But any pack-

age passed in a lame-duck session

is likely to be, at best, just a start.”

Asked whether he supported

the $908 billion stimulus propos-

al, Biden told reporters: “I just

heard about it. I’ll take a look at it

when I get back.” Asked whether

he had spoken to McConnell, he

said, “Not yet.”

Sen. Richard J. Durbin (D-Ill.),

the second-highest-ranking Sen-

ate Democrat, was involved in the

discussions but did not appear

with lawmakers at the Tuesday

news conference. In a floor

speech, Durbin cited disagree-

ments with the group’s decisions,

arguing that it should have ex-

cluded the liability shield, but he

said: “I’m still willing to work on

it.... Let us not make the best the

enemy of the good.”

Durbin called for the legisla-

tion to come to the Senate floor,

despite his reservations.

“I’m not happy with a lot of

these figures,” he said. “But that’s

what it’s all about in this world of

the United States Congress: You

come together, willing to sit down

and listen to the other side and, if

necessary, compromise.”

Economists have warned of

devastating consequences for the

economy and millions of Ameri-

cans if no stimulus deal is passed.

A number of relief programs are

set to expire at the end of the year.

Twelve million Americans are on

pace to lose their jobless benefits,

and protections for renters and

student borrowers are also set to

expire, along with a federal paid-

family-leave program.

The White House has largely

abandoned its aggressive push for

stimulus since Trump lost the

Nov. 3 presidential election. It is

also unclear whether Biden will

push Democrats to accept a small-

er package, although some of his

economic advisers have been ada-

mant that a stimulus deal must be

passed quickly, even if it is smaller

than what Democrats prefer.

[email protected]

[email protected]

[email protected]

Rachel Siegel, Felicia Sonmez and

John Wagner contributed to this

report.

Bipartisan group of senators unveils $908 billion plan

TASOS KATOPODIS/GETTY IMAGES

Sen. Joe Manchin III (D-W.Va.), center, speaks alongside a bipartisan group of senators as they

announce a proposal for a coronavirus relief bill on Capitol Hill on Tuesday. The roughly $908 billion

proposal includes funds for local governments, small businesses, schools, student loans and transit.

Stimulus proposal aims

to break impasse but

lacks buy-in from leaders

“I’m not happy with a

lot of these figures....

You come together,

willing to sit down and

listen to the other side

and, if necessary,

compromise.”

Sen. Richard J. Durbin (D-Ill.)

Learn print, radio,

television & digital

The Washington Association of Black Journalists encourages Washington, D.C.-area

high school students to apply to its annual Urban Journalism Workshop (UJW). The

winter/spring 2021 session celebrates 35 years. Longtime Chicago Tribune and St.

Louis Times Dispatch reporter George Curry, former Washington Post reporter Athelia

Knight and others started the program in 1986. UJW gives students the opportunity to

learn the fundamentals of print, radio, TV and online news. Current and former

journalists with The Washington Post, NPR, The Washington Informer and other outlets

volunteer to teach and mentor participants. Seniors who enter the program’s essay

contest compete for a scholarship.

2021 Urban Journalism

Workshop

Applications and required materials must be

received by 30 January 2021.

To download the application, learn more about the Urban

Journalism Workshop and/or the essay contest and

scholarship, visit http://www.ujwonline.org or contact UJW

Coordinator Trina Williams at [email protected].

P0986 3x

•Sessions are held for eight consecutive

Saturdays 9am - 4pm from 27 February – 17

April, finishing with a closing ceremony in

early June.

•High School students, grades 9-12, in the

greater D.C.-area are eligible to apply.

•Scholarship criteria includes an essay,

stories produced in the workshop, class

attendance and participation in all eight

sessions.