Sen. Toomey stands firm on provisions to limit Fed’s emergency lending powers – TribLIVE

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Pennsylvania Sen. Pat Toomey said his demands that Congress eliminate more than $400 billion in Federal Reserve emergency lending powers approved under the CARES Act and to prohibit such programs in the future should have come as a surprise to no one.

“Contrary to what Democrats suggested, this is not in any way an attempt to hamstring the Biden administration or weaken the economy,” Toomey said. The provision he insisted on proved to be a sticking point in negotiations for a $900 billion covid relief bill this week.

House Speaker Nancy Pelosi, D-Calif., told The Associated Press that Toomey’s provision was the biggest hurdle to a sealing a deal Saturday as lawmakers scrambled to craft a relief bill to attach to a bill that will allow the government to continue operating after Sunday.

Toomey, R-Lehigh Valley, is a fiscal conservative who has said he will not seek re-election in 2022. He was among a handful of Republicans who acknowledged Biden’s victory last month and congratulated the president-elect.

Biden has supported ongoing negotiations for a limited relief package, calling it a down payment.

Toomey said the provisions he insisted must be part of the proposed relief package have been part of the conversation about any future covid relief on Capitol Hill for months. The expiration of the Federal Reserve programs he has targeted was envisioned in the CARES Act, he said.

“This is all about ensuring the law is followed as it was intended to be followed,” he said.

Toomey said the programs served their purpose and have proved of limited value in recent months, with billions remaining untapped.

David Gulley, an economist at Bentley University in Massachusetts who studies fiscal policy said the programs Toomey has targeted worked well to prime the economy early in the pandemic.

“I would agree that the current value of these lending facilities is much more limited now than it was in March or April,” Gulley said. “But, it likely isn’t a good idea to restrict the Fed’s ability to respond to future crises. The Fed’s lender of last resort function has proven to be of high value during The Great Recession and the covid pandemic.”

U.S. Sen. Bob Casey, D-Scranton, warned limiting the Federal Reserve’s abilities during a crisis could prove harmful. He urged quick action on a covid relief package.

“Millions of Pennsylvanians are at risk and the American people can’t wait any longer for relief. We must work together to pass robust relief legislation without these kinds of provisions,” Casey said as negotiations continued.

Deb Erdley is a Tribune-Review staff writer. You can contact Deb at 724-850-1209, derdley@triblive.com or via Twitter .

Source Article from https://triblive.com/news/pennsylvania/sen-toomey-stand-firm-on-provisions-to-limit-the-feds-emergency-lending-powers/

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