The United States Congress avoids government shutdown but fights for pandemic aid

The US Congress passed an interim spending bill on Friday night (US time), avoiding a partial government shutdown and buying itself another two days for frustratingly slow negotiations on a financial aid package. of Covid-19 of almost 1 trillion dollars (1.4 trillion New Zealand dollars).

Talks about virus aid continued their course, both parties said, but closing the final disagreements was proving difficult. Weekend sessions were available and House leaders expected a vote Sunday on the massive package.

The House passed the temporary funding bill by 320 votes to 60. The Senate passed it by voice vote almost immediately thereafter, sending it to President Donald Trump.

Senate Majority Leader Mitch McConnell said both sides remain determined to close the deal. Negotiations continued through Friday night, but an agreement was unlikely to be reached before Saturday, lawmakers and advisers said.

The $ 900 billion package comes as the pandemic is producing its most fearsome surge yet, killing more than 3,000 victims a day and straining the nation’s healthcare system. While vaccines are on the way, most people won’t get them for months. Applications for unemployment compensation are on the rise.

The emerging deal would provide more than $ 300 billion in aid to businesses and provide the unemployed with an additional federal unemployment benefit of $ 300 per week and renewal of state benefits that would otherwise expire just after Christmas. It also includes funding for vaccine distribution and money for tenants, schools, the Postal Service, and people in need of food assistance.

However, some parts of the bill are being fiercely controversial, with direct payments to people a key point. Democrats have sought another round of direct payments of $ 1,200, but Republican Senator Ron Johnson blocked the measure and kept the proposed direct payment amount at $ 600.

On Friday, Democrats launched themselves against another key obstacle in the bill: a provision by Conservative Sen. Pat Toomey that would shut down the Federal Reserve’s credit powers. The Toomey provision prohibits the Fed from restarting loan programs next year, and Democrats say such a law would tie Biden’s hands and put the economy at risk.

“As we navigate through an unprecedented economic crisis, it is in the interest of the American people to maintain the ability of the Fed to respond quickly and forcefully,” said Biden’s economic adviser Brian Deese.

“Undermining that authority could mean fewer loans to Main Street businesses, higher unemployment and more economic pain across the country.”

For Republicans, the most important provision was a long-sought second round of “paycheck protection” payments for hard-hit businesses and the renewal of soon-to-expire state unemployment benefits for the long-term unemployed.

Biden promises an additional stimulus bill next year, but if Democrats lose the Georgia Senate runoff election next month and don’t win a majority in the Senate, they may have little influence.

Most economists, including Chairman of the Federal Reserve Board Jerome Powell, strongly support additional economic stimulus as needed to keep businesses and households afloat during what is anticipated to be a harsh winter.

Many predict that the economy could contract in the first three months of 2021 without further help. Standard & Poor’s said in a report Tuesday that the economy would be 1.5 percentage points smaller in 2021 without further help.