Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. UponArriving has partnered with CardRatings for our coverage of credit card products. UponArriving and CardRatings may receive a commission from card issuers.
As we wait to hear an update on the latest stimulus proposal, there is one issue significantly holding up the stimulus negotiations and it is an issue that sort of came out of nowhere.
The issue is a battle over emergency Federal Reserve powers.
This is something that was never mentioned for months during the back-and-forth between lawmakers but in the last few days it has risen to the top of the list of contentious issues.
Basically, the Fed has programs that provide loans to small and midsize businesses and that provide state and local government bonds which makes it easier for those governments to borrow.
These programs have not been used very often but Democrats believe that by curbing the programs, lawmakers will be limiting the Biden administration from restarting them.
Republican Senator Pat Toomey wants to curb the emergency Federal Reserve powers because he believes that the provisions relating to the emergency powers were only designed to stabilize the capital markets during the height of the pandemic.
Essentially, he does not believe that they are relevant/needed any longer.
But Democrats want these powers to continue as Biden is likely to take office in January. Without such powers, they believe Biden will lack the necessary tools to manage the economy going forward.
“This is about existing authorities that the Fed has had for a very long time, to be able to use in an emergency,” said Sen. Elizabeth Warren, D-Mass.
“It’s about a lending authority for helping small businesses, state government, local government in the middle of a crisis.”
How bad is this disagreement?
Well, some lawmakers are even doubting that it will be resolved soon.
“I don’t think this is going to be resolved anytime soon,” said Sen. John Kennedy, R-La.
“This is now the Republican position.”
It seems that lawmakers on both sides of the aisle understand the importance of getting this issue ironed out.
“That has to be resolved. And then everything will fall into place,” said House Speaker Nancy Pelosi, D-Calif.
“It’s a very significant difference.”
The deadline for coming to an agreement is still midnight tomorrow. So Congress has just over 24 hours to figure out this huge disagreement involving the $900 billion stimulus proposal.
UponArriving has partnered with CardRatings for our coverage of credit card products. UponArriving and CardRatings may receive a commission from card issuers. Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.