Sen. Pat Toomey (R-PA) has insisted that the COVID “Relief Package” being negotiated in Congress not extend the Federal Reserve’s unlimited lending facilities under the CARES act, which has served to channel untold billions of taxpayer largesse into Wall Street and the City of London’s bankrupt mega-financial institutions. Toomey has, so far, gotten backing in this position from the Republican leadership. The Democrats have countered by charging that any such move would “hamstring” the incoming Biden Administration from using the Fed to address any upcoming financial emergencies – which gives you a pretty good idea of what Biden’s actual strategy is for bailing out the toxically bankrupt financial system.
According to various congressional sources, the outlines of a compromise agreement were reached on Saturday night, Dec. 19, and are likely to be concretized on Sunday. Although the details are still unclear, the deal may involve ending the CARES Act Fed lending facilities by Dec. 31, 2020 (as Toomey insists), while dropping language which prohibits the Fed from opening such facilities in the future. According to CNN, a senior Democratic aide stated: “After going back and forth all day with [Senate Minority] Leader Schumer, Sen. Toomey has agreed to drop the broad language in his proposal that would have prevented the Fed Chair from establishing similar facilities in the future to the ones created in March.” Toomey spokesman Steve Kelly had a different “spin”: “This agreement rescinds more than $429 billion in unused CARES Act funds; definitively ends the CARES Act lending facilities by December 31, 2020; stops these facilities from being restarted; and forbids them from being duplicated without congressional approval. This agreement will preserve Fed independence and prevent Democrats from hijacking these programs for political and social policy purposes.”
As usual, Speaker Nancy Pelosi went to bat for Wall Street, attacking Toomey’s proposal: “It’s a way to say to Joe Biden, we are tying up our hands, no matter what comes down the pike,” Pelosi reportedly told fellow Democrats on a conference call. Sen. Mitt Romney (R-UT) also doesn’t like Toomey’s language, stating that some Republicans might be “paranoid” about what Democrats would do with the lending authority. “I think the Fed should be returned to the powers it had prior to the CARES Act,” Romney told reporters Dec. 19. “But I think other reforms should wait for another time.”
