{"id":138050,"date":"2020-12-21T00:25:00","date_gmt":"2020-12-20T21:25:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/heres-how-a-dispute-over-the-feds-emergency-powers-almost-sank-the-stimulus-package\/"},"modified":"2020-12-21T00:25:00","modified_gmt":"2020-12-20T21:25:00","slug":"heres-how-a-dispute-over-the-feds-emergency-powers-almost-sank-the-stimulus-package","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/heres-how-a-dispute-over-the-feds-emergency-powers-almost-sank-the-stimulus-package\/","title":{"rendered":"#\n  Here\u2019s how a dispute over the Fed\u2019s emergency powers almost sank the stimulus package"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a419f68566b4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a419f68566b4\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/heres-how-a-dispute-over-the-feds-emergency-powers-almost-sank-the-stimulus-package\/#Central_bank_didnt_lose_any_powers_in_wake_of_dispute_GOP_senator_Toomey_says\" >Central bank didn\u2019t lose any powers in wake of dispute, GOP senator Toomey says<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/heres-how-a-dispute-over-the-feds-emergency-powers-almost-sank-the-stimulus-package\/#Greg_Robb\" >Greg Robb<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Here\u2019s how a dispute over the Fed\u2019s emergency powers almost sank the stimulus package<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Central_bank_didnt_lose_any_powers_in_wake_of_dispute_GOP_senator_Toomey_says\"><\/span>\n  Central bank didn\u2019t lose any powers in wake of dispute, GOP senator Toomey says<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000106728\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Over the past few days the Federal Reserve found itself where it didn\u2019t want to be \u2014 in the political spotlight.<\/p>\n<p> Talks over a $900 billion package of government aid to millions of Americans were in danger of collapsing because of a dispute over Fed emergency powers.<\/p>\n<div class=\"paywall\">\n       The dispute started when Sen. Pat Toomey, a Republican from Pennsylvania,  added language to the stimulus bill related to Fed lending programs set up earlier this year. <\/p>\n<p>Toomey specifically wanted to close what he said was a loophole in the CARES Act that enabled the Fed lending plans to be extended and expanded.<\/p>\n<p>In a discussion with reporters on Sunday, Toomey explained the behind-the-scenes machinations.<\/p>\n<p>Toomey said he had wanted to make sure the Fed\u2019s emergency loan programs sunset at the end of the year. The three programs in question were innovative, involving Fed lending to medium-sized businesses, and buying corporate and municipal bonds. Toomey said the these lending programs should end because the crisis was over.<\/p>\n<p>Treasury Secretary Steven Mnuchin had agreed with Toomey\u2019s stance and refused to extend the three loan programs.<\/p>\n<p>But Toomey said he became aware that Democrats saw a loophole in the CARES Act and were going to expand the Fed\u2019s municipal lending program and \u201ccommand\u201d the central bank to make long-term, low-interest-rate loans to states and local governments. <\/p>\n<p>Mnuchin had controversially tried to wall off the funds for Fed use, but congressional scholars suggested he didn\u2019t have this authority.<\/p>\n<p>So Toomey said he decided to add language to the relief package closing this loophole once and for all. <\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>However, Toomey\u2019s language set off alarms among Fed supporters and Democrats, and brought progress on the stimulus relief bill to a screeching halt. <\/p>\n<p> The Fed\u2019s emergency powers had already been curtailed after the financial crisis. After the Fed rescued AIG<br \/>\n        AIG,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/203700638\/composite\" class=\"negative\">-1.96%<\/bg-quote><br \/>\n       during the 2008 financial crisis, Congress passed legislation mandating that any Fed rescue package had to be broad-based and not aimed at one company, and also had to be <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roved beforehand by the Treasury secretary. Toomey\u2019s bill seemed to add an additional requirement of congressional approval.   <\/p>\n<p> Former Fed Chairman Ben Bernanke put out a statement saying it was \u201cvital that the Federal Reserve\u2019s ability to respond promptly to damaging disruptions in credit markets not be circumscribed.\u201d  <\/p>\n<p>Democrats were also furious because they thought Senate Republicans were trying to tie the hands of President-elect Joe Biden and his economic team. <\/p>\n<p>Toomey said these were both of these were \u201cwild mischaracterizations\u201d of his position. <\/p>\n<p>Late Saturday afternoon, Toomey went to the Senate floor and offered to re-write his amendment. Democrats quickly accepted his offer.<\/p>\n<p>The two sides worked on compromise language and reached agreement late Saturday evening, clearing the way for Congress to resume work on the stimulus bill.<\/p>\n<p>\u201cThe Democrats made a fair point\u201d that his language was too broad, Toomey said. It  \u201cmight have captured facilities we didn\u2019t intend to capture,\u201d he added.<\/p>\n<p>Toomey maintained the compromise met his original goal. If House Democrats want the Fed to expand its purchases of municipal securities, it must be approved by Congress.<\/p>\n<p>Misuse of the emergency loan programs would make the Fed \u201ccompletely politicized,\u201d he said.<\/p>\n<p>\u201cThere would be competing pressure to do all kinds of things for preferred constituencies,\u201d he said. \u201cThat\u2019s another good reason we ended this facilities.\u201d<\/p>\n<p>Sen. Mark Warner, a Virginia Democrat who worked on the compromise with Toomey and Senate Democratic leader Chuck Schumer of New York, also said he was pleased.<\/p>\n<p>\u201cWe did not think tying the hands of a future Fed or Treasury made any sense,\u201d Warner said.<\/p>\n<p>\u201cThe great <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> is that Congress is not going to be the Grinch. We\u2019re going to get this [stimulus] package done,\u201d he added, in an interview on ABC News\u2019 \u201cThis Week.\u201d<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Greg Robb\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Greg_Robb\"><\/span>Greg Robb<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D1A0E8A88F03%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Here\u2019s how a dispute over the Fed\u2019s emergency powers almost sank the stimulus package &#8221; Central bank didn\u2019t lose any powers in wake of dispute, GOP senator Toomey says Over the past few days the Federal Reserve found itself where it didn\u2019t want to be \u2014 in the political spotlight. Talks over a $900&#8230;<\/p>\n","protected":false},"author":1,"featured_media":138051,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-138050","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/138050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=138050"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/138050\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/138051"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=138050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=138050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=138050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}